SP Setia development wins another FIABCI award

Prestigious award: (from left) Liew, FIABCI World President 2011/2012 Alexander Romanenko, FIABCI Prix d’ Excellence 2012 president Laszlo Gonczi and St. Petersburg Committee for Construction chairman Vyacheslav Semenenko

PETALING JAYA: SP Setia Bhd's award-winning development in Johor, Setia Eco Gardens bagged another FIABCI Prix d'Excellence award at the 2012 FIABCI Prix d'Excellence Awards Ceremony held in St Petersburg.

In a statement, SP Setia said the award marked the fourth international award for SP Setia and the second for Setia Eco Gardens. Setia Eco Gardens emerged as the winner in the Specialised Project (Purpose-Built) category for Eco Greens. Eco Greens is a 28-acre park complex in Setia Eco Gardens comprising a town park and the famed Eco Gallery, which features a green wall that has since become an iconic landmark for the 948-acre township.

The 2012 FIABCI Prix d'Excellence Awards saw 14 winners from seven countries namely Malaysia, Singapore, India, Taiwan, Russia, Hungary and Switzerland.

“We are truly honoured to be recognised with a fourth Prix d'Excellence Award from FIABCI International and are proud to represent Malaysia on the real estate world stage,” SP Setia president and CEO Tan Sri Liew Kee Sin.

He said the win marked another milestone for Setia Eco Gardens and was a testament to the group's commitment in building sustainably.

“The design and layout of Eco Greens and the eco facilities fully reflect the group's development philosophy of Live Learn Work Play. “Setia Eco Gardens has introduced a new standard of living to the state of Johor and its success is testimony to the fact that the entire spectrum of the community can share equal access to a quality living environment,” said Liew.

Located at the main entrance to Setia Eco Gardens, Eco Greens has become the township's signature landmark and recognized not just by residents of Johor Baru but visitors from Singapore and other countries.

It is also one of the most prominent landmarks in Iskandar Malaysia by virtue of it being the first eco park.

This latest recognition by FIABCI also makes SP Setia the only Malaysian developer to have won four FIABCI Prix d'Excellence Awards. The company's three earlier awards were won by Setia Eco Park in Shah Alam for Best Master Plan (2007) and Best Residential (Low-Rise) Development (2011) and Setia EcoGardens for Best Master Plan (2009).

By The Star

Flexis@One South launched

KUALA LUMPUR: Property developer Hua Yang Bhd has launched its first ever small office, home office (SOHO) development, Flexis@One South, with an estimated gross development value (GDV) of RM200 million.

It is the fourth phase of the whole RM920 million One South integrated development.

Hua Yang sales & marketing manager Loh Chin Hong said Flexis@One South features various architectural innovations and contemporary design styles that appeal to young and urban buyers, especially first time homeowners.

“It caters to the growing mobile workforce, who are able to work remotely or from home, with the advent of information technology,” he said.

In a press statement yesterday, Loh said true to its name, Flexis@One South allows one the flexibility in converting spaces for either home or office use or both.

Two types of layouts are available, the typical single level units with built-up of 475 sq ft and 628 sq ft, and the duplex (split level) measuring 1,106 sq ft, 1,194 sq ft and 1,271 sq ft.

The SOHO units are priced from RM250,000 which is suitable for individuals who are looking to purchase their first home or setting up a home office.

Loh said this reflects Hua Yang’s continued growth as a developer whose quality products are still offered at an affordable price.

Overall, One South consists of a soon-to-be completed street mall and two phases for serviced apartments, namely Parc@One South and Gardenz@One South.

“Phase five and six are the final phases, which consist of the last block of serviced apartment and two blocks of office towers,” Loh said.

By Business Times

SP Setia to develop RM1.1bil Penang project

PETALING JAYA: SP Setia Bhd will be embarking on a mixed residential development project with a gross development value of RM1.1bil in Penang after acquiring freehold land in the state.

In a filing with Bursa Malaysia, the company said it had acquired 21.3 acres in the north-east Penang Island district of Timor Laut for RM185.6mil.

Acquired via its wholly-owned subsidiary, Intra Hillside Sdn Bhd, the company said it would be developing an eco-themed project comprising terraced houses and condominiums.

It said the land's proximity to Batu Ferringhi, well known for its vibrant beachfronts and one of the island's main tourist destinations, was a key attraction for investors looking to acquire prime freehold land in Penang.

The proposed acquisition is expected to be completed during the second half of the financial year ending Oct 31.

By The Star

S$108mil for a bungalow

Online asking prices of S$50m for posh homes not unusual in S’pore

Singapore: A luxury bungalow in Sentosa Cove with a staggering S$108mil price tag. A huge, swanky condo unit in Cuscaden Walk on sale for a cool S$68mil.

Homes are being tagged with a level of prices never seen before here.

Online asking prices of S$50mil or more are now not uncommon. For instance, there are more than a dozen listings of good-class bungalows, mainly in the traditional upscale areas of Leedon Road and Victoria Park Road, with price tags at this level.

But with asking prices significantly higher than market prices, some experts say these could be more of a marketing tactic to generate publicity for the particular home.

So far, there have been only a handful of homes sold that have managed to cross the S$50mil mark, and none has exceeded the S$100mil threshold. But it was also important to look not just at overall prices but also at the unit per sq ft (psf) price when comparing these homes, experts added.

For instance, the most expensive landed home sold here was a 41,850-sq-ft good-class bungalow in Leedon Park that changed hands for S$61.4mil, or S$1,467 psf, in December 2010. The record psf price is held by a bungalow in Chatsworth Road that went for S$2,081 psf, or S$22mil, in July last year.

In the non-landed homes market, it was a 8,050-sq-ft Boulevard Vue unit that smashed records with a transaction of S$33.4mil in November 2009. But it was The Marq on Paterson Hill that caused jaws to drop with a 3,003-sq-ft unit snapped up at about S$6,850 psf or S$20.5mil.

International Property Advisor chief executive Ku Swee Yong said that when a home was sold at 50% above the price of a similar home in the vicinity, alarm bells should ring and buyers should look closely at the specific attributes of the property to see if it was worth the premium.

“It must have good attributes to justify why its price is so much higher than its neighbours. But if it is truly a good quality property, then buyers might still pay,” he added.

Credo Real Estate executive director Ong Teck Hui said that in a rising market, a valuer might be able to support a valuation above the prices of past sales, taking into account how much the market had risen.

But the valuer would not be able to justify a value beyond that, he added. However, there could still be demand for homes with high quantums as long as their values are at market rates.

This was because the supply of some of these posh homes was limited, experts added.

For instance, there are only about 2,400 good-class bungalows in 39 gazetted areas islandwide. They typically occupy at least 15,000 sq ft of land.

Good-class bungalow developer George Lim said that he typically marketed his high-end homes discreetly through word of mouth, friends' recommendations or through a specialised agent.

“When you reach that kind of price category, there are few people who can afford (such homes) and they are usually discerning and discreet.

“They don't go online to look for homes as that is more for the mass market So you need to find a reputable agent who is known in the market and has the right connections,” he added.

Among the online listings, the 99-year leasehold Sentosa Cove bungalow in Ocean Drive is the one with the highest asking price of S$108mil.

At a whopping S$5,436 psf of land area, the bungalow comes with six en-suite bedrooms and sits on a double plot with a sea view.

Its price is almost three times the overall price record of S$39mil for a bungalow sold in the exclusive estate in March, and more than 80 per cent higher than the record unit price of S$2,989 psf achieved in October 2010.

Other expensive homes listed include a 40,500-sq-ft good-class bungalow in Queen Astrid Park with a price of S$64mil, while another 26,500-sq-ft bungalow in Belmont Road would require a buyer to fork out about S$50mil.

Even condos are nudging well above S$50mil asking prices.

A six-bedroom 11,200-sq-ft unit at Boulevard Vue in Cuscaden Walk is listed with a guide price of S$68mil. Another 9,000sq-ft five-bedder unit at Skyline@Orchard Boulevard is asking for S$55mil.

By The Straits Times/Asia News Network

540 abandoned low-cost flats to be occupied next year

To be occupied soon: The abandoned Phase 1 low-cost flats in Jalan Kuang Gunung, Taman Kepong.

BUYERS of the abandoned Phase 1 low-cost flats in Jalan Kuang Gunung, Taman Kepong, can expect to move in by August next year after waiting for almost seven years.

Housing and Local Government Minister Datuk Chor Chee Heung said the landowner would fund the project because the developer had been declared bankrupt.

“The ministry will continue monitoring the project until it is completed,” he said, during a visit to the project with 540 units.

The project began in May 2003 and Phase 1 was scheduled to be completed in 2006 but was abandoned with 81% completed as the developer, Gallant Acres Sdn Bhd, was declared bankrupt on March 5, 2008.

Chor then ordered the landowner — Kepong Development Sdn Bhd — to find funds amounting to RM14mil to complete the project.

In 2010, the landowner and project’s liquidator — Tentuan Hals & Associates — were given six months to get a court order to restart the project.

Chor had told the house buyers at the time that the ministry would take over by appointing a third party if the landowner and liquidator failed to take action within the six months,

Phase 1 of the Li Garden Apart-ment and condominium project consists of three blocks of low-cost flats and 12 shoplots.

Phase 2 consists of 396 low-cost units.

Kepong Community Centre head Yee Poh Ping, who has been championing the issue on behalf of the buyers, said the project would be completed between December this year and February next year.

“However, the buyers can only move in around August next year as we still need time to apply for the Certificate of Fitness and get approval for other utilities,” he said.

Chor said 100 out of the 177 abandoned housing projects had been revived and completed since 2009.

Out of the remaining 77 projects, Chor said 51 were still under construction while the other 26 were still under discussion for revival.

“Most of the projects are low-cost schemes.

“We want to concentrate on helping low-cost house buyers,” he said.

By The Star

KPJ arm buys land in Johor for RM45m

KPJ Healthcare Bhd's unit, Kumpulan Perubatan (Johor) Sdn Bhd is acquiring a parcel of commercial land in Tebrau, Johor for RM45 million.

In a statement to Bursa Malaysia here today, KPJ said a private specialist hospital would be built on the 5.4-hectare land, which in turn would expand its customer base thus contributing positively to the company's yearly financial performance.

The company said the newly constructed hospital would be the only specialist private hospital within Taman Bukit Mutiara and Bandar Dato region.

It said the new hospital, which would cater to local and international market, would also be equipped with centre of excellence facilities for outpatient and specialist practice for cardiac, geriatric, cancer, orthopedic and cosmetic.

The proposed acquisition was expected to be completed in the fourth quarter of this year.

By Bernama

OSK Property posts higher Q1 pre-tax profit

OSK Property Holdings Bhd recorded a higher pre-tax profit of RM19.36 million for the first quarter ended March 31, 2012 compared with RM12.05 million in the same period in 2011.

Revenue, however, fell to RM51.04 million from RM61.16 million previously. In a filing to Bursa Malaysia today, it said the improved pre-tax profit was due to higher sales achieved for its Bandar Puteri Jaya, Sungai Petani, Kedah project and higher contribution from Sutera Damansara project in Sungai Buloh.

"In addition, certain phases of these projects have reached advanced stages of construction, thus resulting in increased percentage of profit recognition," it added.

Going forward, the company said with the government's aim towards
encouraging home ownership among first-time buyers and its commitment in the implementation of the Economic Transformation Programme, the group's diverse range of properties was expected to be in demand.

The company planned to undertake industrial development of small- to medium-sized industrial factories on the industrial land in Shah Alam.

"This project will enable the group to diversify its development portfolio to include small, medium industrial factories and to expand its geographical coverage to Shah Alam," it said.

The group would continue to focus on its goals to enhance its performance level while continuously improving customer service as well as maintaining efforts towards effective cost-saving measures.

By Bernama

Hektar REIT gets SC nod to up fund size

Hektar Asset Management Sdn Bhd, the manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced it has obtained the Securities Commission's (SC) approval for its proposal to increase its fund size and list new units on the Main Market of Bursa Malaysia Securities Bhd.

With the approval, Hektar REIT is looking to increase its fund size by up to 93.859 million units to a maximum of 413.855 million units.

Approval was also given for the valuation of two retail properties in Kedah to be acquired by Hektar REIT, it said in a statement.

The properties are Landmark Central Shopping Centre and a major portion of the Central Square Shopping Centre, which are collectively worth RM184 million, it said.

The RM181 million acquisition of both malls at a purchase consideration price will also increase REIT’s gross asset value to RM1 billion, it said.

Hektar REIT's enlarged net lettable area is expected to increase by about 52 per cent after Kedah malls proposed acquisition.

"Our next step is to meet our unitholders to obtain their approval for the proposed acquisition and rights issue through an extraordinary general meeting,” said Datuk Jaafar Abdul Hamid, Chairman and Chief Executive Officer of Hektar Asset Management Sdn Bhd.

By Bernama

Slowdown leaves China on shaky ground

A worker rests on his shovel at a road construction site as cranes are seen in the background at a residential area under construction in Beijing. China’s residential real estate investment grew only 4% year-on-year in April. — Reuters

HONG KONG: China's property chickens are coming home to roost. Last week's economic data show that a year of falling prices is finally changing developers' speculative behaviour.

After years of boom, most developers, like many investors, have acted as if the downward move were no more than a blip. When barred from getting bank credit, many property companies found funds elsewhere, notably through so-called trust companies, which make loans funded by short-term retail funding.

Throughout 2011, developers merrily continued to add new floor space at the same rate as they had a year earlier.

April's data show there has been a rude awakening. The amount of housing floor space completed dropped 56% from the total figure for January and February, months usually lumped together to account for the New Year's holiday. The shift is more than seasonal the drop off was a milder 35% in the previous two years.

Space under construction also failed to show its usual post-New Year spike. Overall, residential real estate investment grew 4% year-on-year in April a tenth of the rate of a year before. Adjust for inflation, and that's equivalent to no growth at all.

Since new property development accounts for about a tenth of China's gross domestic product building, a modest slowdown will be enough to cause overall economic activity to sputter.

By Reuters

Hua Yang launches Flexis@One South

Property developer Hua Yang Bhd has launched its first ever small office, home office (SOHO) development, Flexis@One South.

The first of its kind in Seri Kembangan, Flexis@One South features various architectural innovations and contemporary design styles that appeal to young, urban buyers especially first-time homeowners.

"Estimated at RM200 million in gross development value, Flexis @One South is the fourth phase of the entire RM920 million One South integrated development.

"It reflects Hua Yang’s continued growth as a developer whose quality products are still offered at an affordable price," it said in a statement today.

Priced from RM250,000, the SOHO units are suitable for individuals who are looking to purchase their first home or setting up a home office, it added.

Overall, One South consists of a soon-to-be completed street mall and two phases for serviced apartments, Parc@One South and Gardenz@One South.

Hua Yang said phase five and six are the final development, consisting of the last block of serviced apartment and two blocks of office towers.

By Bernama

Malaysia draws foreign property buyers

Malaysia is slowly becoming a popular destination for foreign property buyers around the region, particularly Singaporeans, not only because of geographical reasons but also of its affordability.

Chief Executive Officer and Founder of PropertyGuru Group Steve Melhuish said there was an enormous amount of pressure among Singaporeans to look for affordable housing especially with government housing becoming increasingly out of reach.

Besides, with the hike in sellers' stamp duty to 16 per cent by the Singapore government recently, he said it had heavily impacted on foreign investors who wanted to buy additional properties.

"People are becoming less positive in the Singapore property market. About 26 per cent of the respondents we interviewed recently were considering investing in overseas properties and 35 per cent were actually eyeing Malaysian properties," he said today in conjunction with the rebranding of its Malaysian property portal, PropertyGuru.

The portal, formerly known as HomeGuru, has presence in ten countries including offices in Singapore, Malaysia, Indonesia, Thailand and partnerships with leading property websites in Australia, Hong Kong, India, Macau, Vietnam and China.

Melhuish said the average price of city apartments in Singapore were almost eight times higher than in Malaysia while rental yields in Malaysia were two to three times higher than its republic neighbour.

"A lot of expatriates working in Singapore are now living in Johor Bahru and travelling back and forth to the island everyday," he said.

Meanwhile, Group Country Manager John Paul Sta Maria said the rebranding of HomeGuru and its northern Malaysia portal, FullHouse, to PropertyGuru Malaysia, had many advantages for foreign property buyers considering the volume and frequency of buyers looking for Malaysian and Singapore properties online.

Since going live in January 2011, HomeGuru has achieved over 120,000 property listings and is used by 3,500 real estate agents.

To strengthen its rebranding exercise, the group will invest more than RM5 million on advertising and publicity to build its brand presence across the nation.

By Bernama

SP Setia arm buys land for RM186m

SP Setia Bhd's wholly-owned subsidiary, Intra Hillside Sdn Bhd, is acquiring 8.523 hectares of freehold land in the north-east Penang Island district of Timor Laut for RM185.645 million.

In a statement to Bursa Malaysia here today, the property developer said about 10 per cent of the purchase consideration amounting to RM18.564 million and the balance of RM167.081 million will be paid within three months of the sale and purchase agreement.

The proposed acquisition is expected to be completed during the second half of the financial year ending Oct 31, 2012.

The land acquisition would provide a rare opportunity for SP Setia to acquire land and expand its presence in the northern tip of Penang island.

By Bernama

Emas Kiara subsidiary buys land for RM5.3mil

KUALA LUMPUR: Emas Kiara Industries Bhd (EKIB)'s wholly-owned subsidiary, Noblecorp Sdn Bhd, has acquired land in Kulai, Johor, from Creative City Development Sdn Bhd for RM5.258mil.

The company would obtain a bank loan to complete the acquisition which would not only benefit the group but also help diversify into different businesses including investment.

In a filing with Bursa Malaysia, EKIB said the property outlook in Johor was expected to be positive taking into consideration the advanced stage of completion of major infrastructure works.

“Major projects in Iskandar Malaysia are coming on this year and the investment prospects enhanced by the Economic Transformation Programme would also contribute to the overall positive outlook,” it added. - Bernama

Barring unforeseen circumstances, the acquisition is expected to be completed within three months.

By Bernama

Dijaya gets SC nod for RM850mil loan stocks issuance

KUALA LUMPUR: Dijaya Corporation Bhd has received the Securities Commission's approval to issue up to RM850mil nominal value of loan stocks.

It said on Tuesday the SC had vide its letter, dated May 11, approved the issuance of the redeemable convertible unsecured loan stocks (RCULs).

To recap, the RCULs are part of a corporate exercise wherein Dijaya had recently entered into agreements with several vendors for a proposed acquisition of 73 properties, comprising 49 parcels of land and 16 buildings, for RM949.9mil.

The proposed acquisition would be satisfied by cash totalling RM250mil, while the balance would be through the issuance of a 3% coupon RCULS, with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

Dijaya's major shareholder and group CEO Tan Sri Danny Tan had then said the amalgamation exercise was to consolidate all property development and investment activities into Dijaya, while avoiding businesses that are conflicting or competing with its interest.

The corporate exercise would see Dijaya's land bank increase to 870 acres and the group's total gross development value would increase to RM37bil.

In addition, the investment properties' net lettable areas for Dijaya would increase to 1.4 million sq ft. The additional properties were expected to generate a more stable and recurring income for Dijaya.

The parcels of land to be acquired were located within Kuala Lumpur, Johor Baru, Penang as well as in Kota Kinabalu and Sandakan.

By The Star

Commercial property loans 22.7% higher

PETALING JAYA: Credit for the purchase of commercial properties in March grew by 22.7% year-on-year, raising concerns in some quarters of a potential asset bubble.

This loan growth in the non-residential sector, which includes industrial and commercial properties, was the highest followed by credit growth for the construction sector at 19.2%.

Meanwhile, loan growth for purchase of residential properties in March had somewhat moderated to 13.9% year-on-year.

“Starting from the end of 2009, there has been a big loan growth in the non-residential sector,'' Pong Teng Siew, head of research, InterPacific Research, said. “The pick-up in loan growth in this sector was evident in the second half of 2009.''

Illustrating the rapid pace of loan growth, the total stock of loans in the non-residential sector has grown from RM70bil in June 2009 to RM116bil currently, or 66%.

“This is faster than for any kind of loans,'' said Pong. “Can this pace of loan growth be sustained?''

“At the moment, demand for non-residential properties is a reflection of the strength of the economy,'' said Pong. “If there is a lot of demand for office space, then the 66% growth would be a reflection of the confidence in take-up.''

However, a note of caution is that projections of strong demand usually lead to overbuilding, and eventually an oversupply situation.

The presence of too many listed property and construction firms also places pressure on the need to grow profits.

“The non-residential sector has grown significantly but the bulk in value is still in residential which comprised 28% of total loans in March,'' said Low Yee Huap, head of research, Hong Leong Investment Bank.

“Meanwhile, non-residential properties made up only 11% of total loans in March.''

Over the past few years, a low interest-rate environment and accumulation of liquidity has encouraged the buying of shophouses and offices, while some high-rise buildings come with commercial titles.

“But if the situation (of rapid loan growth) gets out of hand, it will cause a potential bubble,'' said Low. “There needs to be a balance for healthy growth.”

Recently, there has also been a lot of non-residential launches. Moreover, the purchase of non-residential properties is not subject to the loan-to-value cap.

“It's become a trend now for commercial launches, with smaller commercial units and sohos being built for affordability.

“It is more a matter of market forces and changing of customer preferences,'' said Chan Ken Yew, associate director of Kenanga Investment Bank Bhd and head of its research division.

By The Star

Islamic City set to take shape in Shah Alam

Popular landmark: The Sultan Salahuddin Abdul Aziz Shah mosque.

SECTION 5 in Shah Alam is set to be turned into an “Islamic City” after the final plans have been approved by the Shah Alam City Council (MBSA) and Selangor government.

The “Islamic City” includes a 20ha area surrounding the iconic Sultan Salahuddin Abdul Aziz Shah mosque and Shah Alam Lake Gardens.

Five consultants presented their designs for the development of an “Islamic City” at a workshop held at The Saujana Hotel Kuala Lumpur recently.

Representatives from Ikhtisas Planner, AJC Planning Consultants, IZM Planning Consult, DPZ Asia and Prof Emeritus Dr Ismawi Zen, who is a lecturer in the Architecture and Environmental Design, presented their designs and how each could use the area after taking into account the lake, mosque and courts, nearby.

Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said he was sceptical when the idea was first mooted by Shah Alam mayor Datuk Mohd Jaafar Mohd Atan.

However, he said the idea made sense and it was now time to turn those dreams into reality.

He added that the state together with MBSA would also have to come up with ways of preventing traffic congestion with the influx of cars into the city.

Khalid also wanted the “Islamic City” to be an ideal location for businesses, educational institutions and other activities.

“We have to look at all angles from marketing Shah Alam to designing the area,” he said.

He added that Islamic elements and traditions should also take precedence in one’s design.

He said the design and architecture should also be appropriate.

The cost of the project has yet to be determined but it would be between RM2bil and RM3bil as it covered a large area.

When completed, Khalid said it would be a new breather for Shah Alam and could further boost the city’s potential in business, tourism and art.

He said he wanted to look at all designs and recommendations before deciding to go ahead with the project at the end of the year but declined to comment on when the project would be completed.

By The Star

UDA’s dilemma on Pudu Jail project

It needs to follow directive but also needs to consider the best deal for the project

KUALA LUMPUR: UDA Holdings Bhd is still evaluating proposals of all parties for the redevelopment of its Pudu Jail land and wants the preferred bid to be the one that is in its best commercial interest.

Even though the board has approved the proposal by Everbright International Construction Engineering Corp last year, the Finance Ministry (MOF) has directed UDA not to consider the company and instructed UDA to prepare a masterplan based on parcelling the land into three.

A special committee formed by UDA's board has included the development model proposed by Everbright in its evaluation to ensure that UDA's long-term commercial interests are protected.

On protecting bumiputra interest, UDA, under the Everbright proposal, will own a significant portion of the assets in the project and will ensure bumiputra contractors will be given the opportunity to participate in all stages from consulting, construction and retail space

Chairman Datuk Nur Jazlan Mohamed said the committee was at the initial stages of developing the masterplan but early indications were that the development model proposed by Everbright gave the best returns to UDA .

“On a commercial basis, Everbright's proposal is the best because it will develop the land as one piece. If the land is cut into three parcels, you know you will lose the value of the land,” he told StarBiz in an interview.

“But we have not come to a conclusion yet.”

MOF has asked UDA to divide the land into three one is for a bumiputra controlled party, another by a bumiputra company in a joint venture with others and the third parcel is open to a non-bumiputra company.

Under Everbright's proposal, the China company will fund the entire development of the land that has been called Bukit Bintang City Centre (BCCC). Its proposal comes with a committed funding of US$1bil and Everbright will take the construction and financing risk, build a contiguous retail space of 2 million sq ft, a car park and a convention centre and hand it over to UDA.

All that time, UDA will retain control of the land and Everbright will, after handing over the assets UDA needs in four years, develop its own properties on the land at its own pace.

Given the amount of commercial space that is planned in Kuala Lumpur, Everbright will have the muscle and foreign connection to handle the flood of floor space that will come on stream in the next few years.

The best option so far for the bumiputra developer will see UDA take on a lot of the risk Everbright is willing to shoulder. UDA. together with the bumiputra developer, must secure the funding for developing the project, which will lower the returns it will obtain.

That means the property will have to be injected into a special purpose vehicle and the ownership of the land will be charged to a bank to get the funding.

The land will have to be charged to the bank in order to raise the funding since UDA does not have the cash to fund the multi-billion ringgit project,

That will translate into lower earnings for UDA compared with the proposal by Everbright.

Furthermore, the floor space it will have to lease out to retailers once the project is completed under the parcelled-out proposal will also be smaller as the land would have been sub-divided among three different developers.

Nur Jazlan said the proposal by Everbright would mean that UDA stands to receive RM300mil to RM400mil a year in income from its property at BCCC, which is essential for a company that has just 400 arces that can be developed.

“The best solution is for UDA to have enough retail space to allow it to earn substantial recurring income to continue to have money to acquire land and grow as a developer.

“What is UDA's long term future and the Puda Jail land provides the only hope for UDA where if developed properly, UDA can get the right quality assets that can give it recurring income.

“That's why the decision on the Puda Jail land is not a normal decision. We need to develop the right quality assets to give us the recurring income for us to have a future,” he said.

Shopping centres need to be of a big size to attract the traffic to be successful. He said the retail space at the Puda Jail land will require a contiguous space in order to compete against the like of Pavilion and Mid Valley Megamall.

If the carved out proposal gives UDA retail space in three separate locations, Nur Jazlan said it would be hard to attract retailers and shoppers to the retail parts of the development.

“If it is not integrated, it will be hard to attract people. We won't achieve the rental yields.”

Nur Jazlan said the Government had not pumped money into UDA after it got listed in the 1990s and he did not think it would do so in the future. UDA has been asking for more land since it has been privatised but has yet to be allocated any.

Nur Jazlan said it was also easier to stratify the assets if the property was built by a single developer.

“It will be a problem if the land was parcelled out as you will be dealing with three different parties,” he said.

Nur Jazlan said it would not be easier to REIT out at a later date if the assets were jumbled up with different developers.

By The Star

Emas Kiara arm buys land for RM5.3m

Emas Kiara Industries Bhd (EKIB)'s wholly-owned subsidiary, Noblecorp Sdn Bhd, has acquired land in Kulai, Johor, from Creative City Development Sdn Bhd for RM5.258 million.

The company would obtain a bank loan to complete the acquisition which would not only benefit the group but also help diversify into different businesses including investment.

In a filing to Bursa Malaysia, EKIB said the property outlook in Johor was expected to be positive taking into consideration the advanced stage of completion of major infrastructure works.

"Major projects in Iskandar Malaysia are coming on this year and the investment prospects enhanced by the Economic Transformation Programme would also contribute to the overall positive outlook," it added.

Barring unforeseen circumstances, the acquisition is expected to be completed within three months.

By Bernama

WCT focuses on value creation

Opening soon: The Paradigm Mall in Kelana Jaya is near completion and is set for opening on May 23. Among its tenants are Tesco, Golden Screen Cinemas, Padini Concept Store, Marks & Spencer, Zara, Elle, G2000, Harvey Norman, Toys R’ Us and Popular Bookstore.

WCT Bhd is keen to expand its presence in the local property market and is actively seeking out new land to replenish its landbank in the Klang Valley and other parts of the country.

Executive director Choe Kai Keong says although WCT's forte is in engineering and construction which contributes 64% of the group's operating profit, it is building up its presence in property development, investment and management.

“By 2016, contribution from construction and engineering is expected to reach a more equitable level of 45%, while that from property development will increase to 30% from 21% now, and investment and management to 25% from 15%,” he tells StarBizWeek.

The group has more than 2,000 acres that are in various stages of development, and has recently acquired two parcels of 468 acres and 57 acres in the Klang Valley.

Choe: ‘Besides the Klang Valley, we are also on the look out for land in Iskandar Malaysia, Penang, Kota Kinabalu, Vietnam and China.’

Choe says the land costing RM450mil has potential gross development value (GDV) of RM5.2bil.

The 468 acres in Rawang, Selangor, would be developed into an integrated township comprising mainly medium to medium-high priced properties. The development worth an estimated GDV of RM1.2bil is set for launch in 2014 and is slated for completion in 10 years.

The 57-acre in Overseas Union Garden in Kuala Lumpur is planned for a mixed development of residential and commercial project worth RM4bil.

The target launch is 2014 for completion in eight years.

WCT's healthy balance sheet provides a war chest of RM800mil which can be used for land acquisition. Its net gearing ratio at 0.4 times allows room for the group to expand its landbank.

“Besides the Klang Valley, we are also on the look out for land in Iskandar Malaysia, Penang, Kota Kinabalu, Vietnam and China. This is in line with our strategies of branching out into a more balanced and broader range of property offerings including high-rise residences, luxurious homes, service apartments, offices, shopping malls and hotels,“ Choe adds.

He says despite concerns of a market slowdown amid the prevailing economic uncertainties, demand for good quality properties, especially landed houses, in good locations with accessibility and amenities, is still strong.

WCT has lined up some RM1bil worth of project launches this year. They comprise RM320mil worth of high-rise condominiums in 1Medini in Iskandar Malaysia; RM400mil of landed housing units in Bandar Parklands, Bukit Tinggi Klang; RM120mil apartments in Bukit Jelutong; and RM150mil luxury homes in Klang.

For the financial year ending Dec 31, 2012 (FY12), WCT is expecting sales to jump to RM700mil from RM450mil recorded in FY11. In the first quarter ended March 31, it chalked up sales of RM200mil.

Flagship projects

“In widening our market presence, we will be leveraging on our expertise and track record in the development of WCT's flagship township Bandar Bukit Tinggi in Klang and the recently completed d'Banyan luxury homes in Kota Kinabalu,” Choe says.

WCT's 1,336 acre parcel in Bandar Bukit Tinggi, Klang, is in advanced stage of development into an integrated township; with another 350 acres to be developed.

The project will have a GDV of RM4.8bil, of which some RM3.3bil worth of properties have been completed in the past 15 years. The balance of another 350 acres with GDV of RM1.5bil is expected to take five more years.

WCT has a 56-acre parcel in Klang that has been earmarked for a luxurious housing project worth some RM450mil. The project is slated for launch in the fourth quarter of this year.

A 2.26-acre commercial parcel in Bukit Jelutong will be developed into 280 units high-rise apartments. The RM120mil project is also planned for a fourth quarter launch.

In Johor, WCT owns 21 acres in Iskandar Malaysia. The first parcel of 11 acres is earmarked for 1Medini high-rise residential units with GDV of RM700mil. Launched in January, it will take five years to be fully-developed.

The second parcel of 10 acres across the road from 1Medini will be developed into the Medini Business District comprising mixed commercial properties worth some RM800mil.

WCT's maiden project in Kota Kinabalu, the d'Banyan is a 22-acre high-end residential project comprising bungalow villas, semi detached homes and super link villas worth a GDV of RM269mil.

However, the group's 33 acres in Ho Chi Minh City, Vietnam, will not be taking off anytime soon pending the conclusion of the land resettlement process.

Although it has been issued with the investment certificate by the Vietnamese authorities in 2008 for the first 23 acres and in 2011 for the balance 10 acres, the project's launch had been delayed due to weak consumer sentiment caused by the unstable dong and high interest rates.

“Although the dong is stabilising and inflation is under control, we are still waiting for consumer confidence in Vietnam to return before launching our project there. In the past two months, bank interest rates have dropped by 2% and things should continue to get better,” he adds.

Widening income streams

Next year, WCT can look forward to higher contribution from its investment and management activities with the coming on-stream of its two latest retail assets - Paradigm Mall and KLIA-2 Integrated Complex.

Choe says WCT will own 2.1 million sq ft in net lettable area (NLA) of retail space in the country by the second quarter of 2013.

The group's investment and management projects comprise its maiden retail project, AEON Bukit Tinggi Shopping Centre and Premire Hotel in Klang, and two toll highway concessions in West Bengal, India.

The duration of the highway concessions, awarded by the National Highway Authority of India, is from 2004 to 2020 and contribute to RM10mil to RM15mil in annual earnings to the group.

WCT's maiden retail project, AEON Bukit Tinggi Shopping Centre with NLA of 1.1 million sq ft, was opened in Klang in 2007.

Construction of Paradigm Mall in Kelana Jaya is near completion and the mall with NLA of 700,000 sq ft is set for opening on May 23.

The mall is already 91% occupied with average base rental of RM6 per sq ft. WCT will operate and manage the Paradigm Mall.

Among its anchor tenants are Tesco, Golden Screen Cinemas, Padini Concept Store, Marks & Spencer, Zara, Elle, G2000, Harvey Norman, Toys R' Us, Popular Bookstore, TGI Friday's, Starbucks, and Chili's.

Its next retail project, the KLIA-2 Integrated Complex with 350,000 sq ft of retail space at the departure and arrival levels, is due to open in the second quarter of 2013.

The project is a 25 + 10-year build-operate-transfer concession which is 70% owned by WCT and 30% by Malaysia Airport Holdings Bhd.

“Each of the mall is expected to provide an annual internal rate of return of 6% to 8%. This translates to some RM10mil in revenue from Bukit Tinggi Shopping Centre, about RM10mil to RM15mil from Paradigm Mall, and RM15mil to RM20mil from KLIA-2,” Choe adds.

He says WCT's investment and management division is also looking to expand into the hospitality sector and planned to open its second Premire Hotel in 2014.

The new Premire Hotel to be located beside the Paradigm Mall in Kelana Jaya will have 350 rooms.

WCT's maiden hotel, the 250-room 4-star business class Premire Hotel in Klang, was launched in 2010.

“We plan to expand our portfolio of retail and hotel assets to widen our earnings streams and it will be done in tandem with our expansion into new growth markets,” Choe says.

Trailblazer in GCC

In engineering and construction, Choe says WCT has build up a strong presence in the Gulf Cooperation Council (GCC) region with 10 projects to its name in the past decade.

The Yas Marina F1 Circuit in Abu Dhabi, UAE, built at a cost of RM4.2bil is the most expensive F1 circuit in the world.

The most high profile projects are the two F1 circuits in the region - Bahrain F1 Circuit and Yas Marina F1 Circuit in Abu Dhabi, UAE.

WCT's first entry project in the GCC is the Bahrain circuit which was completed in 2004.

Built at a cost of RM600mil, it holds the record as the first F1 circuit ever to be built in a desert.

The highly acclaimed circuit soon landed WCT another project - the Yas Marina F1 Circuit - which at a cost of RM4.2bil is the most expensive F1 circuit in the world.

The project, a 50:50 joint venture between WCT and its Bahraini partner, Cebarco, was completed in 2009.

The WCT management is understandably excited that the group is blazing the trail for Malaysia in the GCC construction and infrastructure business, and hopes to make further inroads in the region.

Despite the global financial meltdown and prevailing economic uncertainties in many parts of the world, the group believes there are still much untapped opportunities in the GCC countries.

“We currently have two projects in Qatar - the Government Administrative Office worth a contract value of RM1.3bil, and the New Doha International Airport contract worth RM3.2bil which is a 49:51 joint venture between WCT and Gamuda.”

WCT has an outstanding construction order book of RM3.3bil, with half of the amount comprising projects in Malaysia and the balance in the GCC.

It is also bidding for some RM5bil worth of new contracts.

By The Star

SP Setia expands footprint in Penang

Property developer SP Setia Bhd is on the lookout to acquire more strategic pieces of land in Penang in a bid to extend its footprint in the state.

Presently, it is looking to buy three parcels of land on the island by the middle of the year.

The company, which currently boasts an undeveloped landbank totalling close to 40 hectares in the state, is in the final stages of negotiation to acquire land in Tanjung Bungah
and Jelutong.

SP Setia Property (North) general manager Datuk S.Rajoo told Business Times the company is eyeing two parcels of land in Tanjung Bungah totalling 10.2ha while the parcel of land in Jelutong measures 3.6ha.

“We are hoping to conclude the land acquisition deals by the middle of June and are planning mixed residential housing projects on the plots,” he said in an interview.

Present was the company’s deputy general manager for the northern region’s property division Khoo Teck Chong.

SP Setia made its entry in the state more than five years ago via the Setia Pearl Island development which is sprawled over a 45ha site and carries a development value of RM1.2 billion.

The project comprises three-storey terraced homes, semi-detached units and commercial lots, and is located between 4km and 5km from the proposed site of the second Penang bridge at Batu Maung and 20km from George Town.

“We would like to extend our presence to other parts of the island and have been doing so through our projects in George Town.

“We have acquired two pieces of land in Balik Pulau totalling 12ha for purposes of landed residential units,” Rajoo added, saying that the launching date of the project has yet to be determined.

Khoo said the last piece of undeveloped land at the Setia Pearl Island site is expected to be launched by the third quarter of 2013.

Carrying a development value of RM350 million and sprawled over 7.6ha of land, he said the project, called The Breeze, will
comprise low-rise and high-rise dwellings respectively.

"Our new launches," Khoo said, "will include exclusive high-rise condominiums at Teluk Kumbar which we hope to launch by the second half of 2013."

The QBees project, comprising 98 condominium units, will be sited on a 1.2ha plot and carries a gross development value of RM50 million.

Other planned launches include Penang's first Green Building Index residential project, which will be sited in the second phase of its Setia Greens development at Cangkat Sungai Ara.

"We are looking at launching more eco-housing via this project, which will comprise landed houses and one condominium block on a 5.6ha site," Khoo said.

By Business Times