Jalan Sultan Ismail projects will unlock value in the prime location in KL

Tradewinds will demolish Crown Plaza Mutiara Hotel and Kompleks Antarabangsa to make way for a mixed-development project, called Tradewinds Centre.

PETALING JAYA: The redevelopment of some of the buildings in Jalan Sultan Ismail, one of the longest and main arteries in the heart of the capital, is gaining further traction to unlock the value in the prime location and meet the future demands of the Greater Kuala Lumpur.

Just last week, Permodalan Nasional Bhd (PNB), which acquired the former MAS building in late 2006 for RM130mil in cash, awarded a RM673mil contract to Ahmad Zaki Resources Bhd to demolish the podium building and build a 50-storey tower hotel with six levels of basement parking. PNB also intends to refurbish the 35-storey office building on the site.

And in June, Tradewinds Corp Bhd confirmed in a news report that it would demolish the Crown Plaza Mutiara Hotel and Kompleks Antarabangsa to make way for a mixed-development project, called Tradewinds Centre. It is reported that the project might cost around RM6bil.

The redevelopments in Jalan Sultan Ismail is not only to further unlock the value of the land there but also to catch up with the growth and development of nearby prime areas such as Kuala Lumpur City Centre (KLCC) and Bukit Bintang.

Tradewinds group chief executive officer Shaharul Farez Hassan told StarBiz that the company planned to develop Tradewinds Centre as an iconic building as well as a destination.

“Key to the development will be the concept of urban and environmental harmony.

“As one of the few green buildings in Kuala Lumpur, Tradewinds Centre's outstanding architecture will be complemented by a central Grand Plaza covering a large area of about one acre. This plaza will feature broad open spaces, breezy courtyards, lush landscaping and much more,” he said.

Shaharul said the company had consciously allocated a Grand Plaza in the centre of the development, much like to the sunken plaza in Rockefeller Centre in New York and Roponggi Hills.

“The Grand Plaza would be a focal point for the public and users to enjoy the stunning environment, socialise and relax.

“It can also be used for festive events such as New Year countdowns or other celebrations.

“Its signature profile will greatly contribute to the overall composition of the city skyline.

“Its large scale and memorable public plaza unites neighbourhoods in the urban fabric, creating a dynamic focal or meeting point that is systematically linked via pedestrian-friendly walkways and public transportation,” he said.

On how the multi-billion ringgit project would further unlock the value of the land, Shaharul explained that the existing buildings were conceived during a period of lesser competition.

“Since then, the city and its buildings have grown to meet future demands for better quality, larger spaces and added features.

“While such buildings can be retrofitted and enhanced to address competition, there are limits to such a strategy. Looking towards the future, we have made the difficult but necessary decision to totally remake this location to serve the city's needs far into the future,” he said.

Furthermore, Shaharul said, the plot ratio of the existing buildings was small, at about five, thereby resulting in gross under-utilisation of the potential property value.

“Planned as an iconic, integrated and modern redevelopment with grade A building features, Tradewinds Centre would maximise its potential more than doubling the amount of allowable high value space,” he said.

Real estate consultant Rahim & Co group of companies executive chairman Senator Datuk Abdul Rahim Rahman said that in his opinion based on market demand and environment, hotels were more likely a better decision than office building as there was a oversupply of that now.

“And the Government is also confident that tourist arrivals would be good. Furthermore, the hotels rates in Kuala Lumpur are more competitive that in Singapore, Hong Kong and even Jakarta,” he said.

As for Jalan Sultan Ismail, Abdul Rahim said it was the prime location before the development of the KLCC which was now fetching better rates.

He added that Jalan Sultan Ismail was a long stretch where rental rates were RM5 per sq ft (psf) as opposed to RM8 to RM10 psf in KLCC.

“Although Jalan Sultan Ismail is not the prime location anymore, it will still remain as one of the prime locations in Kuala Lumpur,” he said.

Nevertheless, Abdul Rahim said it might be easier to get better yields in Jalan Sultan Ismail.

“For instance, if one wants to get a good apartment in KLCC area one has to pay around RM1,500 psf, but in Jalan Sultan Ismail due to its long stretch one can get a good apartment at RM800 psf, where it would be easier to get 5% to 7% returns.

By The Star

MKH to gain from MRT project as its property developments are close to the rail line

Mass appeal: Chen posing with a model of the company’s property development project in Kajang.

KAJANG: MKH Bhd (formerly Metro Kajang Holdings Bhd) will derive considerable leverage from the mass rapid transit (MRT) line which runs close to its property developments and the two MRT stations that will be coming up here.

The MRT project aside, group managing director Datuk Eddy Chen Lok Loi said the company was also seeing improvement in its financial figures as a result of its rebranding exercise undertaken a few years ago.

“The quantum leap is waiting to happen for MKH given our strategic landbank of 500 acres to 600 acres in Kajang and Semenyih, excluding the 550 acres turnkey project in Puncak Alam, Selangor,” Chen told StarBiz.

The company is planning to launch properties with an estimated gross development value of more than RM5bil over the next seven years in Kajang and Semenyih, including its Puncak Alam RM135mil turnkey project from Puncak Alam Resources Sdn Bhd.

Chen said:“We are targeting to launch our Puncak Alam's mixed development which will include affordable housing by year-end or early next year.

“The year 2017 will be significant as our Puncak Alam project will be completed and the MRT line in Kajang will be up and running thus enhancing the value of our residential and commercial developments.

“At the same time, our plantation will attainfull maturity with expected yields of between 28 and 30 tonnes per ha per year,” he pointed out.

MKH, which used to derive its revenue from property development and investment, has added oil palm plantation to its current core business. The plantation division will start to contribute positively from 2013 onwards.

“All these years, we wanted to go into the plantation sector to balance the ups and downs characterised by the property development market,” said Chen. It has a total of 15,000 ha planted as at June 2012. Harvesting area as at June this year was about 7,740ha .

Its plam oil mil commenced crude palm oil production at a rate of 60 tonnes per hour and this can be upgraded to 90 tonnes in time to come, he said.

He said the company's earnings momentum was also gathering pace, boosted by higher property development activities which saw its third quarter revenue for the 2012 financial year reaching RM376mil, or a 73% increase compared to the same period a year ago. Property development saw an increase to RM274.1mil from RM118.7mil for the nine-month period a year ago, representing an increase of 130% year-on-year.

The key contributing projects are Hill Park Homes, Pelangi Semenyih 2, its Kajang 2 township developments and the Saveille@Melawati condominium.

Its property investment division, with a value of RM216mil, contributed RM22mil revenue for the third quarter under review, reflecting a marginal increase of 2.8% compared to the same period a year ago.

“This division is providing a steady income, contributing between 12% and 13% to our group profit,” said Chen.

MKH's third quarter net profit is expected to reach RM47mil compared to RM21mil for the same period last year, representing an increase of 124%.

Property development and construction division contributed the largest segmental portion of the profit for the three quarters, at RM66mil, compared to RM12mil for the same period a year ago, reflecting an increase of 447.5% increase.

“We saw a four-fold increase profit from property development and higher average rentals and lower operating costs,” said Chen.

Despite competition heating up with the entrance of new and bigger players in Kajang and Semenyih like SP Setia Bhd, Mah Sing Group Bhd and Sunway group, Chen said MKH's cutting edge would be its land cost, which was considerably lower than its competitors and its reputation on a home turf.

By The Star

Iskandar properties will stay hot

Booming: Upgrading of existing roads and construction of new highways within Iskandar Malaysia in recent years have improved connectivity and accessibility within south Johor.

Improvement in connectivity and accessibility attracting more investments

JOHOR BARU: Developers can expect the “feel good factor” in the Iskandar Malaysia property market to continue in 2013, based on the number of transactions taking place this year.

KGV International Property Consultants (M) Sdn Bhd director Samuel Tan Wee Cheng said most new property launches in the area were well received by buyers.

He said completed but unsold properties or property overhang was no longer a dilemma faced by developers in south Johor unlike 10 to 15 years ago, and local developers had learnt their lesson well from the 1997-1998 Asian financial crisis as they were caught unaware, resulting in many abandoned projects and unsold properties.

“Iskandar Malaysia will continue to drive the growth of the property market in south Johor in years to come,'' Tan told StarBiz.

From 2006 until end-June 2012, Iskandar Malaysia had recorded total cumulative committed investments of MR95.45bil in various sectors with 43% of the investments already realised.

Domestic investments constituted 62% (RM58.95bil) of the total investments of RM95.45bil, while the remaining 38% (RM36.50bil) were from foreigners.

Tan said Iskandar Malaysia was more viable compared with other economic growth corridors economic growth corridors in Malaysia, including the Northern Economic Region, East Coast Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy.

Located in the southernmost part of Johor, Iskandar Malaysia covers 2,217 sq km and is three times bigger than Singapore.

Tan said as a government-backed economic growth corridor, Iskandar Malaysia had strong backing fin terms of funding for infrastructure development projects.

The Government had spent RM7.31bil on infrastructure in Iskandar Malaysia since 2006 on the upgrading and construction of new roads and highways, flood mitigation, river cleaning and public housing.

“Improvement in connectivity and accessibility makes most areas within the Iskandar Malaysia flagship zones attractive to house buyers,'' said Tan.

The completion of the New Coastal Highway, the Eastern Dispersal Link Expressway and the Southern Link would help to push demand for properties, Tan said, adding that among the areas benefiting from better road linkages were Bukit Indah, Perling, Sutera Utama, Nusa Bestari, Seri Alam, Kempas, Setia Tropika, Senai, Kulai, Nusajaya, Skudai and Tebrau.

He said one advantage about Iskandar Malaysia was that most the of roads and highways were toll-free unlike in the Klang Valley.

Tan said prior to the inception of Iskandar Malaysia, property prices in south Johor had not seen many changes but now the prices were on the upward trend. He said, for instance, the price tag for an intermediate double-story link house now ranged from RM200,000 to RM500,000 each while a bungalow was now selling at between RM1mil and RM5mil.

“We anticipate that the property prices in south Johor will continue to be on the upward trend due to several factors such as the Singapore factor,'' said Tan.

Johor Baru continued to be a prefJohor Real Estate and Housing Developers Association (Rehda) branch chairman Koh Moo Hing concurred with Tan that the property market would remain positive next year.

He said Iskandar Malaysia would continue to contribute to the positive growth in the Johor Baru property market as it helped to boost demand for houses in south Johor.

With the completion of most flagship projects this and the next couple of years in Iskandar Malaysia, they would bring economic spills over to the property sector, Koh said, adding that the influx of domestic and foreign investors and the presence of new residents and workers in Iskandar Malaysia would create demand for residential properties as well as office spaces.

“Our Rehda members with projects in Iskandar Malaysia have reported good response for their new launches with no slowdown or property overhang,'' said Koh. He said statistics compiled from developers taking part in the Malaysia Property Expo (Mapex) Johor Baru in 2009, 2010, 2011 and up to May 2012, showed that they recorded better sales.

“The last four to five years were considered good for our members as they were able to keep the number of unsold properties to a minimum,'' he added.

Koh said while Tebrau and Skudai would remain the traditional hot spots for property development projects in Iskandar Malaysia, others areas were becoming popular with buyers.

By The Star

Sunway on track for RM1.3bil sales

Artist impression of the Sunway Wellesley Phase 1, which consists of 31 units of three-storey shop offices.

SUNWAY Bhd's property development division is on track to achieve its targeted sales of RM1.3bil this year.

The property development and construction group has done RM1bil in property sales to date, says managing director of property development division (Malaysia) Ho Hon Sang.

The major drivers of Sunway's property sales this year include new phases at Sunway South Quay in Bandar Sunway, and Sunway Velocity in Kuala Lumpur.

Ho: ‘Diversification means mitigated impact and warranted performance.’

Ho points out that the group's recent commercial property offerings Sunway Geo @ Sunway South Quay, Sunway Velocity's Phase 3C1 and Sunway Wellesley Phase 1 in Penang had recorded take-up rates of more than 80% during previews.

The gross development value (GDV) of these projects' phases is RM700mil.

“Besides the strategic locations, these developments are well-planned, with good facilities, infrastructure, security features and incorporate great concepts. They have great potential for excellent capital appreciation,” says Ho.

Ho says the recent preview of Sunway Geo's 31 units of retail shops and 220 units of flexi suites, priced at RM7mil and RM400,000 onwards per unit respectively, has received overwhelming response. “The shops recorded take-ups of more than 80%.”

The retail shops are sized at 4,975 sq ft onwards while the flexi suites are sized at 462 sq ft onwards. They have a combined GDV of RM400mil.

Sunway Geo will benefit from the proposed elevated Bus Rapid Transit-Sunway Line.

Sunway Geo is a 23.4-acre mixed development consisting of retail shops, flexi and office suites, serviced apartments and condominiums. It is located next to the award-winning Sunway Resort City, which was recently certified as Malaysia's first green township by the Green Building Index.

Sunway Resort City is home to 200,000 residents and 33,000 students. It welcomes 36 million visitors yearly.

Sunway Geo is an enhanced version of the group's successful retail concept at Sunway Giza and Sunway Nexis located in Dataran Sunway (Kota Damansara), which featured a covered central boulevard and vibrant alfresco food and beverage dining concept.

Ho says the success of Sunway Geo was due to its innovative retail concept, accessibility and connectivity.

It also enjoys a large catchment pool due to its proximity to Sunway Resort City with amenities such as Sunway University, Monash University, Sunway International School, Sunway Medical Centre, Sunway Pyramid, Sunway Lagoon and Sunway Resort Hotel and Spa.

“Access routes are available from Sunway South Quay to Sunway Resort City amenities. These are via free shuttle-bus service, pedestrian-friendly walkways and elevated canopy walk.”

Sunway Geo is also expected to benefit from the proposed elevated Bus Rapid Transit (BRT) Sunway Line that will run through the township and connect to Setia Jaya KTM Komuter station and an upcoming light rail transit (LRT) station at USJ, Subang Jaya.

Meanwhile, strong sales were also seen recently for Sunway Velocity's Phase 3C1, which consists of 276 designer offices and 12 retail shops priced from RM537,000 and RM3mil respectively.

The retail shops are sized from 2,244 to 4,268 sq ft while the office units are sized from 678 to 1,297 sq ft. They have a combined GDV of RM251mil.

Sunway Velocity is a freehold 23-acre integrated development that is located 3.8km from Kuala Lumpur City Centre. It will feature an integration of five elements retail, office, residence, boulevard and garden.

Sunway Velocity is also planned with a one-million-sq-ft lifestyle shopping mall that will be managed by the group. The development is bordering Jalan Peel, Jalan Cheras and Jalan Shelly, and is reachable via Jalan Tun Razak, Jalan Loke Yew and Jalan Pudu.

It will benefit from two upcoming MyRapid Transit (Cochrane and Maluri) and two existing LRT stations (Maluri and Chan Sow Lin).

Ho also says there was strong response to Sunway Wellesley Phase 1, which consists of 31 units of three-storey shop offices priced from RM972,000.

The 60-acre Sunway Wellesley is surrounded by the Jit Sin Independent High School, AEON Seberang Prai City shopping centre, KPJ Penang Specialist Hospital and Bukit Mertajam High School.

It enjoys accessibility to North-South Expressway, Butterworth-Kulim Expressway and the Penang Bridge and is located within half a kilometre from Bukit Mertajam town centre.

Sunway has undeveloped land bank of 2,780 acres, with a possible GDV of RM32bil. About 93% of the group's undeveloped land bank is in Malaysia (mainly in the Klang Valley, Ipoh and Johor), with a GDV of RM24.5bil. The balance is in Singapore (one acre with GDV of RM95mil), China (95 acres with GDV of RM5.4bil) and other countries in the Asia-Pacific region (103 acres with GDV of RM1.3bil).

The group's launch plans in the Klang Valley in the final quarter of this year include townhouses in Sunway Montana (phase two) at Desa Melawati in Kuala Lumpur, cluster homes in Sunway Alam Suria (phase 2C1) in Shah Alam and three-storey park residences in Sunway Eastwood (phase two) in Puchong.

In Penang, it plans to launch three-storey terrace homes in Sunway Cassia (phase two). Meanwhile, in Singapore, the group has been involved in residential developments with Hoi Hup Realty Pte Ltd since 2007.

Sunway's ongoing projects in Singapore are Vacanza @ East (high-rise development with a GDV of RM1.23 bil), The Miltonia Residences (low-rise development with a GDV of RM952.5mil), Arc @ Tampines (high-rise executive condominiums with a GDV of RM1.17bil), Lake Vista @ Yuan Ching (high-rise development with a GDV of RM915mil) and Sea Esta, Pasir Ris (condominiums with a GDV of RM897.5mil).

The projects have a take-up rate of 92% to 100%, except for Lake Vista @ Yuan Ching which has a take-up of 71%. They are expected to be completed from end-2013 till 2016.

In China, Sunway is presently involved in joint-venture property developments in Jiangyin City (in Jiangsu Province) and the Sino-Singapore Tianjin Eco City.

In Jiangyin City, the group, via a joint venture with Shanghai GuangHao Real Estate Development Co Ltd, is developing a 1,200-unit condominium project with a GDV of RM466mil. It is Sunway's maiden project in China and has achieved a take-up rate of 80%.

In the 7,500-acre Sino-Singapore Tianjin Eco City, the group is developing a 98-acre site which has a GDV of RM5.3bil over the next five to seven years. Sunway has plans for this project to be launched in 2013.

Ho is confident about Sunway continuing to enjoy strong property sales despite talk by industry researchers and analysts about a perceived slowdown in transactional activity within the luxury residential market, due to tougher lending guidelines imposed this year.

He points out that Sunway has a diversified portfolio of properties in different price categories as well as different geographies, catering to various target markets.

“Diversification means mitigated impact and warranted performance. We maintain that strategic properties, which have great value, will always be in demand.”

Ho says Sunway's properties come with well-planned facilities and infrastructure, comprehensive security features, and are strategically located in prime locations.

“These are properties that have excellent potential for capital appreciation and most of our customers, especially the repeat clientele, see the value of these properties.”

He says that in the near future, Sunway will launch products, especially landed units, priced below RM1.5mil. “As for the high-rise segment, we have products worth about RM350,000 and above.”

By The Star

SDB adopts its own approach

Sitting in the vicinity of Bandar Tun Hussein Onn, Windows on The Park will be one of the few in the area which is still surrounded by greeneries.

WHILE it is a common strategy for most property players to have a certain amount of land bank, Selangor Dredging Bhd (SDB) has a different approach when it comes to property development.

Managing director Teh Lip Kim says: “We don't have a land bank. We buy and develop based on what is not available.

Teh: ‘You go high-rise so that there is a lot of space for trees and a park.’

“We look at the locality, income of the people and population around the area to decide what to build.”

Windows on the Park is another project that follows the company's niche to provide products with a strong concept.

Sitting in the vicinity of Bandar Tun Hussein Onn in Cheras, Kuala Lumpur, the planned high-rise residential will be one of the few in the area which is still surrounded by greeneries.

Currently, there is an 11-storey apartment developed by Yuwang Development Sdn Bhd next to SDS's showroom. Besides that apartment, Yuwang has other products like double-storey semi-detached houses, 2-storey terraced houses and three-storey shop offices in Bandar Tun Hessein Onn. Uda Holdings Bhd too has projects near SDB's site.

“We do something different and give customers what they want that is not available in the area,” Teh says.

The highlight of the project is the park which was planned before the building. “You go high-rise so that there is a lot of space for trees and a park,” she quips.

There are three parks: a quiet park, an active park for teenagers and the central park where shared amenities like the gym, swimming pool and a multi-purpose function room are.

One can tell how much emphasis the company places on the 4.2-acre park when Teh shows the landscape model even before she starts.

“We want to come out with a park that is more natural, with multiple layers of terrain as compared with a flat landscape,” she enthuses.

With the different undulation created, one would be able to see a park that resembles a jungle.

“We have a three-tier planting. When residents look down (from their windows), they see three different layers of rooftops which include three-tier planting for trees and three-tier planting for shrubs,” she elaborates.

There is a 800-metre jogging track at the park so people can feel like they're running in the jungle, she claims.

One may wonder if it costs a lot to maintain parks that cover more than 40% of the total surface area?

“We know the types of plants to choose. We even have horticulturalists to help us choose plants that are easy to maintain and does not affect the ground,” she assures.

“Retaining the park will be important because it is the concept that appeals to buyers. We don't want the trees to die after one year!” she exclaims.

The whole idea is to provide city dwellers an opportunity to own a piece of the park without having to go to a public park.

“Basically, we want people to be able to come out from the confines of their own homes to enjoy nature,” she explains.

The apartments were planned in such a way that every unit can oversee the parks surrounding them.

“To symbolise this, there are big openings in the blocks that allow visitors to see through the greeneries when they drop off someone,” she says.

As for the unit, she emphasises on spatial planning so that the space within a unit is well-balanced.

According to Teh, natural lighting is an important element in SDB's projects.

In terms of safety, the area is gated and guarded. The buildings were also earthquake resistant.

The development consists of three blocks totalling 540 units with a gross development value of RM513mil. It sits on 8.98-acres of freehold land.

Selling prices start from RM550,000 for the 916-sq-ft unit which works out to be about RM600 per sq ft. Prices go up to RM2mil for the penthouses.

The site is accessible via SILK Highway, Lebuhraya Cheras-Kajang and Lebuhraya Sg. Besi. There are two proposed MyRapid Transit stations within 4km from the project site.

By The Star

Top property firms bidding for prime Penang plot

GEORGE TOWN: At least three major property developers are believed to have put in bids for a prime plot of land on the island, which currently houses a residential and training centre for the visually handicapped.

Business Times understands that the three that have submitted bids for the land in Pulau Tikus, where the St Nicholas' Home now stands, are SP Setia Bhd, Sunway Group, and Penang's very own BSG Property, the property arm of the Boon Siew Group.

"The bidders made their presentations to the island-based landowners the Anglican Church. They are awaiting word for a second round of presentations in Kuala Lumpur to the Anglican Church," said an industry source.

It is further understood that the earliest a decision will made on the status of the land sale by the Anglican Church will be next year.

The 74-year-old home (which used to be known as St Nicholas School for the Blind) sits on a 2.4-hectare piece of land, which serves as the nation's first education and rehabilitation institution for the blind.

The source said that the proposed sale will likely involve a land swap and the successful bidder will also have to build a new school for the home at an alternative site.

"The owners are also insisting that a new church be built at the existing site to replace the Bagan Jermal Anglican Church," added the source.

The 2.4ha site, which is currently zoned for education purposes, is valued at about RM300 psf, according to property experts.

The location is considered to be prime, as it is nearby major amenities such as the Penang Adventist Hospital and the Penang Chinese Girls High School.

Other assets owned by the Anglican Church in Penang include the landmark St George's Church along Lebuh Farquhar which was built in 1816 and serves as Southeast Asia's oldest Anglican church.

In 2007, the federal government declared the building one of 50 National Treasures of Malaysia and it underwent a major restoration exercise in 2009.

By Business Times

Affordable housing – let it be a reality not fallacy

DURING the major festivals in this country, we see the authorities conduct vigorous enforcement activities on various price-controlled food items. This is to prevent unscrupulous traders from exploiting the situation by increasing prices of what are deemed as essentials. Sometimes they even secretly stock up such items to create artificial shortages. It is outright profiteering.

We often read about wayward traders being taken to court simply for failure to display prices. Whether such measures breach our free market policy may be open for debate. The bottom line is that it does curb profiteering to a certain extent. Having said that, we would now like to refer to the present scenario in the housing arena.

Affordable housing is now the buzzword. There is no denying that the price of suitable housing has reached a crisis level, beyond the affordability of the average wage earners. This is a highly undesirable situation and, if left unchecked, it can lead to adverse and far-reaching problems. We will end up with a whole generation who will be tenants, subjecting themselves to the whims and fancies of landlords, or who have to commit a vast proportion of their household incomes to service house mortgages.

Bear in mind that the Malaysian household income to debt ratio is among the highest in the world and that the bulk of these debt is incurred in the servicing of house mortgages.

Those who are tenants face the uncertainties of landlords either increasing their rentals or even evicting them. The mortgage group faces a delicate and risky situation where they may get into financial trouble if events do not turn out well. These include the raising of interest rates by financial institutions, any downward trend of property prices, drops in their incomes or the cropping up of other emergencies.

Yes, house prices will go up given any period of time due to natural inflationary forces. This is probably beyond the control of any party. But the recent spate of price escalation is certainly not due to natural forces, the cost of building materials or construction costs, much as industry players would like to make us believe. In the case of land cost, it is a chicken and egg situation.

If house prices have been pushed up (either speculatively or naturally), it goes without saying that land owners would expect higher prices for their land. It is also not due to shortfall of supply over demand as National Property Information Centre (Napic) figures show otherwise.

Rather, it is due to unbridled speculative forces.

On the real property gains tax (RPGT) in Budget 2013, it is unfortunate that our Prime Minister has been ill-advised on the true situation. The rakyat can expect to see an increase in speculative property investments which will in turn further drive up the prices.

Typically, if the property is purchased directly from the developer, it takes 2 years (for landed properties) and 3 years (for strata properties) to be completed. During these construction stages, house buyers are not allowed to sell their properties without the consent of the developer and can only sell the properties after they have been completed.

What the revised RPGT means in lay-man terms is that speculators can purchase properties from property developers upon launch and then flip these properties on after 2 years and having to pay only the proposed 10% (i.e. within the 3rd to the 5th year). After the 5th year, all profits are not taxable. With additional attractive financing packages, very often these speculators just need to pay the 10% downpayment and walk away with a lucrative gain at the end of the construction period.

Stronger and more positive governmental intervention is critically required. We are not suggesting that houses should be subjected to price control like other commodities. But we would like the Government to put in measures to discourage speculation. Alter the landscape to make it less encouraging and less worthwhile for speculation to take place.

We have heard housing developers claim credit for having built X-million number of houses and having created immense wealth when the houses appreciate in value. We also see large numbers of speculators who reap immense profits by just buying/booking and flipping over their purchases and reaping enormous profits. While industry players have cited a host of other causes not all are justified. In any event, the escalation of house prices is good for them as it encourages quick sales brought about by an artificial shortage. On the humanitarian side, there is nothing to feel good about.

Speculative profits are not real profits. Speculators are, in effect, taking money from our future generations to enjoy today. Our future generations and under the prevailing circumstances, even the present generation as well will suffer the effects of exorbitant house prices that have resulted in the high household income to debt ratio. This may be legal but it is downright immoral!

The country's economy will be an unbalanced one because with such a large proportion of family income committed to house mortgages, a typical household will be compelled to be stingy on other expenditures. Thus, the other industries will suffer.

Statistics have proved that the present high income to debt ratio is brought about primarily by house mortgages. It looks like the proverbial horses have already bolted and we are still dragging our feet in closing the barn door!

We do not see the logic when the Government is so serious about controlling the prices of essential items such as cooking oil, sugar, chicken and a host of other essential items but yet on the subject of house price, it has allowed the situation to remain laissez faire.

We believe that the issue of affordable houses is even more crucial than some of the price-controlled items because one can always find alternatives or reduce the intake of some of those items. But the alternatives for a roof over one's family are the squatter areas, the shelters under our highway flyovers or the five-foot paths in front of shophouses!

While PR1MA is a good move (barring some of our apprehensions), it is also a typical case of treating the symptoms rather than the cause. In this case, the cause is unbridled speculative activities.

Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, check www.hba.org.my or e-mail info@hba.org.my

By The Star (by Chang Kim Loong)

Singapore acts to prevent housing market bubble

SINGAPORE introduced yesterday measures to prevent a bubble in its housing market and ensure more prudent lending by banks after property prices rose at a faster pace in the third quarter.

Beginning today, the maximum tenure of all new residential property loans will be capped at 35 years, with loans exceeding 30 years facing significantly tighter loan-to-value limits, the Monetary Authority of Singapore (MAS) said in a statement.

Other measures introduced by the authority, the country's central bank, included a lower loan-to-value ratio for residential property loans taken up by companies and other non-individual borrowers.

"We are taking this step now to require more prudent lending, and will continue to watch the property market carefully," MAS chairman Tharman Shanmugaratnam said in the statement.

"We will do what it takes to cool the market, and avoid a bubble that will eventually hurt borrowers and destabilise our financial system."

Tharman, who is also deputy prime minister and finance minister, said quantitative easing by central banks and low interest rates had resulted in easy credit but the situation would eventually change.

Singapore interest rates are near record lows and home buyers can pay as little as one per cent per annum on their mortgages.

"Over the last three years, the average tenure for new residential property loans has increased from 25 to 29 years.

More than 45 per cent of new residential property loans granted by financial institutions have tenures exceeding 30 years," the central bank added.

Singapore did not previously set a maximum duration for property loans and the longest maturity currently available for homes in the city-state is a 50-year loan offered by United Overseas Bank.

Singapore private home prices rose 0.5 per cent in the third quarter from the April-June quarter when prices increased by 0.4 per cent, while resale prices of government-built Housing and Development Board (HDB) apartments leapt 2.0 per cent quarter-on-quarter following a gain of 1.3 per cent in April-June.

Private residential prices have risen 55 per cent since hitting a trough in the second quarter of 2009 in the aftermath of the global financial crisis. HDB apartment resale prices have jumped 43 per cent after a relatively mild correction in the first quarter of 2009. Reuters

The last comprehensive set of real estate cooling measures were introduced in December last year when the government imposed an additional 10 per cent stamp duty on the property value that buyers who were not Singapore citizens or permanent residents had to pay.

By Reuters

Singapore tightens home loan rules

SINGAPORE: Singapore's central bank yesterday tightened rules on residential property lending amid fears that the city state's real estate market could be heading into a dangerous bubble.

The Monetary Authority of Singapore (MAS) said in a statement it was imposing a maximum tenure of 35 years for new housing loans with effect from Saturday.

By AFP

Dijaya MD to take optional retirement?

PETALING JAYA: Dijaya Corp Bhd managing director (MD) Datuk Tong Kien Onn has decided to take optional retirement after more than 25 years with the property development company.

Business Times understands that Tong, 53, will be replaced by Dickson Tan Yong Loong, 31, who is currently the deputy managing director.

Tan is the son of Dijaya founder and major shareholder, Tan Sri Danny Tan Chee Sing, who is the younger brother of the high-profile Tan Sri Vincent Tan, founder of Berjaya group.

It is unclear when Tong would be leaving the company. He was not available for comment.

Tong and his team, under Danny Tan's leadership, have helped build Dijaya to its current size.

Dijaya gained fame for turning a 260 hectares of secondary jungle in Tropicana into a luxurious gated community, known as Tropicana Golf & Country Resort, where the property value has increased by 10-fold.

The company's market capitalisation is about RM1 billion and Danny Tan is aiming to triple that with a slew of property projects lined up for launching.

"It is the close working relationship that both Tong and Danny Tan have since 1983 that has made Dijaya successful.

"Danny Tan has been instrumental in building Dijaya and giving Tong and his management team the opportunity to help achieve his vision for the company," said a source close to the parties concerned.

Tong joined Dijaya in 1991 as senior finance manager, primarily responsible for the group's finance, accounting and treasury functions.

He was then promoted as general manager of finance and administration in 2000 and to a more senior position in the same year, before being appointed as the executive director in 2002.

Tong was appointed to the board of Dijaya on January 18 2002 and managing director on May 10 2007.

He currently sits on the board of Tropicana Golf & Country Resort Bhd, Berjaya Corp Bhd and several other private limited companies.

Dickson Tan, meanwhile, was named to the board of Dijaya on May 20 2009 and made the company's executive director on April 1 2010.

He was designated as deputy MD of Dijaya on October 8 2010 and is currently overseeing group corporate strategy, planning and risk management of the company.

By Business Times

Dubai's property sector treading on recovery path

DUBAI: Dubai's property sector, which went into free fall when the global financial crisis hit, looks like it might be on a path to recovery, with prices starting to bottom out and a few developers daring to roll out new projects.

At the annual Cityscape Global show, which served over years of property frenzy as a launchpad for grandiose projects, a handful of developers displayed scale models for seaside and desert developments to test the appetite of the market.

The three-day international show began on Tuesday.

"We have seen demand increasing since the beginning of 2012," said Mohammed al-Khayat, commercial director at Meydan Group, owned by Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, as he unveiled proposed new projects.

"The market is picking up... There is a heavy traffic of tourists. Many from Saudi Arabia," he said, adding that many tourists with time decide to buy secondary property in Dubai.

Property prices in the glitzy emirate took severe beating when the crisis hit, shedding more than half of their peak values registered in mid- 2008 after five years of breakneck-speed growth fuelled by speculative investments.

But investors are back on the look and have pulled prices up in different areas.

"We do see a recovery. It is a selective or partial recovery and certainly not across the market," said Craig Plumb, head of Middle East and North Africa research at Jones Lang LaSalle property services firm.

"There is always a room for new projects, but we are a bit concerned that people are getting carried away. There is still a lot of supply in the system and it is still coming on. I think a new project has to be well targeted at a particular niche," he said.

By AFP

UEM to sell Time by year-end

KUALA LUMPUR: UEM Group Bhd expects to sell its 45.03 per cent subsidiary Time Engineering Bhd, an information communication technology service provider, by year-end.

Government-linked UEM has been mulling over divesting its Time Engineering stake since 2010, which it sees as a non-core asset.

UEM has four core business divisions - expressways, township and property development, engineering and construction, and asset and facility management.

UEM Group managing director and chief executive officer Datuk Izzaddin Idris said the diversified group is currently in talks with local suitors and hopes to complete the sale by year-end.

"We have been trying to sell Time since day one and have been trying to find the right mechanism.

"Once the board of directors meets and approves the sale, we will call you (the media) in due course," Izzaddin told reporters at UEM headquarters here yesterday.

It was earlier reported that a few parties had expressed interest in taking over Time Engineering, but the group said it wanted to grow the business first before selling it.

Time Engineering previously owned a 24.74 per cent stake in Internet service provider Time dotCom Bhd before disposing of it for RM287 million in 2011.

As at 2011, its price tag was said to be at least RM166 million.

UEM chairman Tan Sri Dr Ahmad Tajuddin Ali said the sale is consequential and, once the mechanism is in place, will come into effect.

"Time is just not our core business ... just like Pharmaniaga, which was a very good business. But we sold it off because UEM is not involved in healthcare," said Ahmad Tajuddin.

As at December 2011, the no-longer listed UEM, which is the owner of the cash-cow PLUS highway, owned assets totalling RM26.3 billion with shareholders' fund of RM7.6 billion.

Employing 16,000 workers, UEM is currently busy with the Nusajaya project in Johor, Second Penang Bridge, KLIA2, the 116km Cikampek-Palimanan toll highway in West Java and the Brunei national housing scheme project, which involves the design and construction of 4,000 houses over four years.

By Business Times

AZRB to redevelop Bangunan MAS

KUALA LUMPUR: Ahmad Zaki Resources Bhd (AZRB) has won a RM673 million job to redevelop Bangunan MAS in Jalan Sultan Ismail here.

The contract was awarded by Permodalan Nasional Bhd (PNB), Ahmad Zaki said in a statement to Bursa Malaysia yesterday.

PNB bought the 35-storey building from national carrier Malaysia Airlines about five years ago for RM130 million.

Ahmad Zaki will demolish an existing podium at the 35-storey building, build a 50-storey hotel and upgrade the existing 35-storey office building.

The hotel will also have six-storey basements for car park and mechanical and electrical service area.

Construction is expected to be completed by October 2017, the company said.

By Business Times

Naza starts KL Metropolis

PETALING JAYA: Naza TTDI Sdn Bhd, the property arm of the Naza Group of Companies, is kick starting the ambitious RM15bil KL Metropolis development by collaborating with Australia-based Lend Lease to develop 4.43ha within the project.

In a statement, Naza TTDI announced that it had signed a heads of agreement to develop the land with a potential gross development value of RM4bil.

Both parties had set the project scope and commercial principles for a mixed-development which includes a regional retail centre, office, hotel and residential components.

Launched in October last year, KL Metropolis is located in the Jalan Duta area, spanning 30.55ha with matured townships like Damansara Heights, Sri Hartamas, Mont' Kiara and Bangsar surrounding it.

Naza TTDI deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the collaboration augured well towards its aspiration and vision to position KL Metropolis as an international trade and exhibition district, where a hub for retail and commercial activities as well as residences will be created to complement the new Matrade Exhibition Centre that is expected to take shape in 2015.

He said that the collaboration would bring together the resources and experience of both parties in their respective areas of expertise and hopes to see the realisation of the joint venture by the end of the year.

Listed in Australia, Lend Lease is a Sydney-based integrated property and infrastructure group.

“Having operated in Malaysia for over 30 years, Lend Lease is delighted to be presented with this opportunity to partner in a landmark project in the country that helps to shape the city skyline, regenerate urban space and is setting new benchmarks in community creation, leaving a positive legacy for generations to come. KL Metropolis is a unique site in a unique city,” said Lend Lease chief executive officer for Asia Rod Leaver.

Naza TTDI recently awarded a RM555.9mil superstructure works contract to Daewoo Engineering and Construction Co Ltd for the new Matrade Exhibition Centre.

The superstructure works, which follow the completion of the foundation works in August, will commence in October and are expected to be completed by mid-2015.

The new development is expected to be the impetus for the development of other parcels of land within KL Metropolis in line with their target for the overall completion of the development by 2025.

CIMB Investment Bank Bhd is the financial adviser to Naza TTDI for the KL Metropolis project.

It was reported that the project was inspired by Naza Group founder Tan Sri SM Nasimuddin SM Amin and was the realisation of his vision, which was mooted 5 years ago.

The project design will draw inspiration from renowned international business districts such as Park Avenue in New York and Champs Elysees in Paris.

By The Star

Dijaya: New projects may fetch up to RM2,500 psf

MARKET TREND: Developer upbeat on W Kuala Lumpur Hotel & Residences project

DIJAYA Corp Bhd plans to launch serviced residences in Kuala Lumpur at a whopping RM2,000 per square foot (psf) to RM2,500 psf.

Senior Dijaya Corp officials said such price is now the going rate for new luxury properties in the city centre.

"We are looking at that price range for now. There are some projects launching at RM2,500 per sq ft in the city centre. Since we are launching only next year, we may re-look the pricing then," said its executive director Koong Wai Seng.

Dijaya is developing W Kuala Lumpur Hotel & Residences at the site where the historical Bok House used to sit on Jalan Ampang.

The project encompasses a 55-storey block with the first few floors housing the six-star 150-room W Hotel, and the rest to be occupied by the residences.

There will be 353 units of the residences, with estimated gross development value (GDV) of RM900 million.

The project is slated for completion in 2016.

Koong is upbeat on sales, saying that Dijaya had received several en bloc offers for the residences.

"We are tagging on the W Hotel address, which is known worldwide," he said yesterday at the signing of Dijaya's RM500 million commercial paper/medium term notes (CP/MTN) programme.

The serviced residences are part of eight projects worth RM2 billion that Dijaya is launching between the end of this year and December 2013 in Kuala Lumpur, Kajang, Subang, Kota Damansara, Johor Baru and Kota Kinabalu.

The signing of the CP/MTN follows the completion of the company's amalgamation exercise in August involving the injection of RM1 billion worth of properties held privately by Dijaya chief executive officer Tan Sri Danny Tan Chee Sing.

The exercise helped Dijaya increase its landbank to 365ha in the Klang Valley, Johor, Penang and Sabah and which is to be developed over 10 to 15 years with a GDV of RM38 billion.

Dijaya deputy managing director Dickson Tan said part of the RM500 million (CP/MTN programme) will be used to develop projects and fund its expansion.

Dickson Tan said Dijaya is looking to acquire smaller developers and companies with sizeable landbank to become one of the country's biggest developers.

"Merger and acquisition is the next target for us to grow the company's business. There are several parties currently soliciting and talking," he said.

RHB Investment Bank Bhd and AmInvestment Bank Bhd are the joint lead arrangers/joint lead managers for the debt programme.

By Business Times

Naim targets RM3bil REIT with ‘mini KLCC’ project

KUALA LUMPUR: Naim Holdings Bhd is the latest property group to express ambitions of having its own real estate investment trust (REIT), with a target size of RM3bil. The plans, though, are in early stages, but will include new developments such as its “mini KLCC” project, which has yet to be named, at the old Bintulu Airport, that carries a gross development value (GDV) of some RM2bil.

This puts the Sarawak-based Naim Holdings, which also has a significant construction arm, in the same category of companies such as TA Global Bhd and KLCC Property Holdings Bhd, which have in recent times expressed interest in forming their own REITs.

Both property and construction arms contribute equally to the company's revenue.

Speaking to reporters at a luncheon yesterday, senior director for corporate services Ricky Kho said the company planned to launch the REIT in six to nine years, when its property assets had reached a “sufficient size.”

It was the company's long-term plan to generate recurring income and gain in property value, He said, adding that the REIT would allow the company to manage the tenant mix of its commercial property units to “maintain the dynamic and vibrancy of the entire development.”

If all goes as planned, Naim Holdings' REIT will be the first Sarawakian REIT.

The properties that will be injected into the proposed REIT include Naim Holdings' completed two-storey Miri Permy Mall. The remaining REIT properties that have yet to be completed are the development of the old Bintulu Airport, a mixed-development in Batu Lintang in Kuching, Pantain Piasau Residences and Piasau Camp in Miri.

Permy Mall's occupancy rate is 94%, and it is expected to generate rental income of RM8mil per annum. “It is already giving us a return of 12% on rental income,” Kho said.

The total development cost, including land and building for the Permy Mall, stands at RM52mil. As at Dec 31, 2011, the estimated fair value for the building and land was RM85mil and RM3.6mil respectively.

Naim Holdings aims to develop a “mini KLCC” at the old Bintulu Airport situated in the New Bintulu City Centre, with a GDV of RM2bil.

“We are going to have a shopping complex, condominiums, SOHO (small office home office) units and hotels,” Kho said.

The whole project will take about 10 to 15 years to be fully complete. The company will launch the shopping complex worth about RM400mil early next year.

Naim Holdings will be developing a 34-acre site in Batu Lintang, Kuching, for a mixed development with a GDV of RM1.8bil spread over 20 years. The company will build the residential segment by the end of next year.

The company has a landbank of about 2,620 acres with an estimated GDV of RM9.5bil. Kho mentioned that the company was still looking to increase its landbank in the Samaluju area in Bintulu.

The Sawarak-based company has about RM1.3bil in its construction orderbook, which is mainly for infrastructural work in the Sawarak Corridor of Renewable Energy (Score).

Score is one of the five regional development corridors initiated by the Federal and Sarawak state government to develop and transform Sarawak into a developed state by 2030.

The corridor will encourage investments in power generation via energy resources like hydro-power, coal and natural gas, which have been found in Sarawak's central region.

The company was recently awarded a RM208.2mil contract via its wholly-owned subsidiary, Naim Engineering Sdn Bhd, for one of the work packages under the Klang Valley Mass Rapid Transit project in Kuala Lumpur.

By The Star

Naim Holdings to venture into REIT

KUALA LUMPUR: Sarawak-based Naim Holdings Bhd aims to move into real estate investment trust (REIT) business with properties en route for launching this year of gross development value of up to RM400 million.

Its corporate services senior director, Ricky Kho Teck Hock, said over the next six to nine years, the group aimed to launch properties of over RM3 billion in value.

He said the REIT business would generate recurring income and gain in property value.

"We have been focusing on our business in Sarawak all this while. Now we are looking to expand to Peninsular Malaysia.

"The company is searching for the right properties to acquire in the Klang Valley, Penang and Pahang," he said after delivering a luncheon talk entitled "Opportunities in Sarawak Corridor of Renewable Energy (SCORE)" here yesterday.

Kho said the group has about RM1.3 billion worth of construction tenders in hand and was also bidding for over RM2 billion worth of tenders within the SCORE area.

He said the group planned to launch the first phase of its New Bintulu City Centre and the Pantai Piasau residences in Miri next year. "The overall GDV of the 17ha New Bintulu City Centre is RM2.3 billion and the 14.97ha Pantai Piasau residences is worth RM251 million," he said.

By Bernama

Dijaya is confident of selling W Residences at RM2,000 psf

PETALING JAYA: Dijaya Corp Bhd is planning to price its W Residences service apartments at RM2,000 per sq ft (psf) when it launches the 352 units next year and this will also be one of the higher pricing for service apartments in Kuala Lumpur in recent times. Dijaya is confident that it will receive strong interest.

The most recent service apartment that has been transacted at an average price of RM2,500 psf is the Banyan Tree Signatures, developed by Lumayan Indah Sdn Bhd. Upon its launch earlier last month, all 173 units were already snapped up. Banyan Tree Signatures is located on a 1.46-acre plot at the junction of Jalan Conlay and Jalan Raja Chulan.

“We are very confident that we will be able to sell at RM2,000 psf. We have had en-bloc enquiries in the past. There have also been international interest. Bear in mind that our W Residences is our own product but will be on top of the W Hotel, thus tagging on to the W Hotel address,” said Dijaya's executive director Koong Wai Seng.

Situated on 1.28 acres of freehold commercial land along Jalan Ampang, the W Hotels & Residences will have 150 rooms while the residences will have 353 units.

In early 2011, Dijaya announced its partnership with Starwood Hotels & Resorts Worldwide, to develop a W Hotel in Kuala Lumpur.

Designed by Skidmore, Owings & Merrill LLP from New York, the W Hotel & Residences will be located within the Golden Triangle and is situated along Jalan Ampang, across the Petronas Twin Towers.

Meanwhile, on news that Dijaya was open to mergers and acquisitions (M&As) in the property sector, Dijaya's financial adviser Astramina Advisory Sdn Bhd managing director Wong Muh Rong said this was a natural growth strategy for the company, as the normal route of organic growth would take too long a time.

“Yes, M&A is our next target and there definitely is interest. It is, however, too preliminary to say anything now,” said Wong.

Yesterday, Dijaya executed the programme agreement and guarantee facility agreement in relation to its proposed 7-year commercial paper/medium term notes (CP/MTN) of up to RM500mil, to be guaranteed by RHB Investment Bank Bhd and AmInvestment Bank Bhd for up to RM300mil and up to RM200mil respectively.

Rating Agency Malaysia Bhd has accorded a short-term rating of P1 and long-term rating of AA2 in respect of the notes to be guaranteed by RHB Bank (tranche 1) and a short-term ranting of P1 and long-term rating of AA3 in respect of the notes to be guaranteed by AmBank.

The proceeds from the CP/MTN programme will be substantially utilised as working capital for Dijaya and its subsidiaries and also to fund development costs of new landbanks injected post Dijaya's amalgation exercise.

In the pipeline of Dijaya's upcoming launches include RM2bil worth of jobs to be launched next year. There will be roughly six launches spread out in the Klang Valley, Penang, Johor and Kota Kinabalu.

“Many of the service apartments we will be launching next year are going to be priced below RM500,000,” said Koong.

The signing (of the CP/MTN) follows the completion of Dijaya's amalgation exercise on Aug 30. Post amalgation, Dijaya's landbank has increased to 913 acres in prime locations to be developed over the next 10 to 15 years with an estimated gross development value of RM38bil.

By The Star

Developers say impact of increased RPGT not significant

KUALA LUMPUR: The increase in real property gains tax (RPGT) announced in Budget 2013 will not have significant impact on the property sector, according two developers.

Budget 2013 proposed a rise in RPGT from 10% to 15% for properties sold within the first two years and from 5% to 10% for those sold from three to five years.

Selangor Dredging Bhd managing director Teh Lip Kim told StarBiz: “The latest budget is all about reducing the deficit. To me, the rise is not that much.”

She said she did not see a slowdown in the property segment as a result of the RPGT increase and was confident of sales.

“I can only speak for myself. I don't see any problems in sales because the products we offer are different,” she added.

In a separate press conference, Dijaya Corp Bhd executive director Koong Wai Seng said the RPGT measure was “moderate.”

“I don't think most investors buy properties and hope to flip it within two years. So this 15% tax measure doesn't really worry us. If the RPGT had been increased for the later years, then yes, there would be some impact. On the whole, we are happy with the Government's move,” said Koong.

On the issue of affordable housing, Teh said that construction costs had gone up substantially largely due to rising material prices.

“I think it is the fluctuation in prices that is worrying the developers. Steel and concrete prices have not been stable and that leads to variations in construction prices.” She also attributed the current property prices to expensive land cost.

“What we should be mainly concerned about is infrastructure. If logistics and infrastructure were better, many people would not mind living further away,” Teh said, adding that the Mass Rapid Transit project was a necessity.

On the company shares that she had bought recently, she said: “I have been buying the shares since I became chief executive officer in 1998. It shows that I have confidence in the company.”

Teh had acquired 2.6 million shares at 71 sen each. Her direct interest in the company is at 17.52% and indirect interest at 40.03% as of Sept 18.

By The Star

Historic building to be city's catalyst

GEORGE TOWN: A newly-restored building in the centre of the city is going to be used as a catalyst to infuse new life and activity after dark into George Town.

Food People Sdn Bhd which has just inked a six-year lease to manage and operate the historic Loke Thye Kee Restaurant building at the key junction of Jalan Penang and Jalan Burmah, wants to restore the building's former iconic status and leverage on its heritage attributes to draw quality tenants to the three-storey building.

The company's two shareholders - DRB-HICOM's chairman Datuk Syed Mohamad Aidid Syed Mustaza and businessman Ong Ban Seang - are keen to promote events and activities which will draw its patrons, especially the young, into the city.

"We are in the process of identifying potential tenants who will help us make this area a must-stop destination for all good food synonymous with Penang," Food People's managing director Ong told Business Times.

"We hope to house a 24-hour food outlet and perhaps a retail outlet on the ground floor, a restaurant on the first floor and the top level which also serves as a roof-garden can become an exclusive lounge or be available for private functions." Ong added.

He said the restaurant is most likely to offer Malay or Hainanese cuisine which can be enjoyed by all Malaysians.

The Loke Thye Kee building which is ship-shaped, was originally owned and built in 1929 by one of Penang's influential community leaders at the time, Khoo Sian Ewe.

Loke Thye Kee which means "House of Happiness" in Hokkien Chinese, once housed a restaurant serving Hainanese food for almost 70 years until 1996, and was considered a premium venue for birthdays and weddings.

The building also served as the preferred site for matchmakers who would bring potential brides and grooms for their first meeting.

Of the RM2 million spent by the building's owners to restore the building, some RM130,000 came from Khazanah Nasional Bhd's subsidiary Think City Sdn Bhd.

Think City operates a public grants fund - the George Town Grants Programme - which is utilized for civil society and the private sector to engage on capacity building and capability development for the protection and development of living heritage, culture and architecture, and to provide support for the regeneration of the area.

By Business Times