GADANG Holdings Bhd (9261) , a construction and property firm, may win two contracts worth RM500 million to build residential towers in Abu Dhabi in the United Arab Emirates by the middle of next year.
It will soon sign a pact with a local party, believed to be from the royal family of Abu Dhabi, to form a joint-venture company.
Gadang's partner will hold a majority stake in the venture, which will source for local funds in Abu Dhabi for the project, managing director and chief executive officer Tan Sri Kok Onn said.
Besides residential, it will also build office and commercial blocks, Kok said after the company's shareholders meeting in Kuala Lumpur yesterday. "There is great demand for housing and commercial. There are areas in Abu Dhabi where foreigners can own properties, so there are a lot of investors coming here to buy," he said.
The two contracts are part of the over RM2 billion jobs Gadang is bidding for in Abu Dhabi.
In addition, Gadang is gearing to launch condominiums, semi-detached homes and bungalows worth over RM100 million in Tanjung Bungah, Penang, by the middle of next next year.
It is also waiting for the final results of a tender it submitted two years ago to build a RM200 million sewerage treatment plant in Malacca, Kok said.
"We have a lot in the pipeline. Earnings-wise, we hope to do better next year, driven by current projects and also because construction material prices have dropped. This will improve the situation for us," Kok said.
For the year to May 2007, the company posted a net profit of RM7.5 million on the back of RM172 million revenue.
Gadang expects to benefit from projects under the Ninth Malaysia Plan that the government will call for next year.
By The New Strait Times
November 28, 2008
November 27, 2008
IOI aborts bid for Menara Citibank, loses deposit
IOI Corp Bhd forfeited its deposit of RM73.36mil after it aborted plans to acquire Menara Citibank for RM586.73mil.
In a statement to Bursa Malaysia yesterday, IOI Corp said the share sale and purchase agreement dated Aug 29 for the proposed acquisition became unconditional on Oct 31.
The due date for payment of the balance purchase price was Nov 11.
“However, due to the recent sudden adverse developments in the global economic environment which have spread to this region and impacted negatively on business sentiments, IOI Corp decided not to proceed with the proposed acquisition,” it said.
IOI Corp said it had received a letter from the vendors’ solicitors dated Nov 26 that they were terminating the agreement and had forfeited RM73.36mil paid earlier by IOI Corp.
The plantation group said it was seeking legal advice on the quantum of the forfeiture.
IOI Corp had proposed to acquire the entire stake in Inverfin Sdn Bhd, which owns Menara Citibank, from Menara Citi Holding Co Sdn Bhd, CapitaLand Ltd and Amsteel Corp Bhd.
IOI Corp had early announced that its earnings fell 36% to RM290.5mil due to an unrealised translation loss on its dollar-denominated borrowings of RM212.2mil. It also included a foreign exchange loss of RM100.6mil in the July-September quarter.
Meanwhile, in a statement to the Singapore Stock Exchange, CapitaLand said it would recognise a gain of S$9.3mil after IOI Corp forfeited the deposit on its failure to pay the balance on the completion date for the transaction.
By The Star
In a statement to Bursa Malaysia yesterday, IOI Corp said the share sale and purchase agreement dated Aug 29 for the proposed acquisition became unconditional on Oct 31.
The due date for payment of the balance purchase price was Nov 11.
“However, due to the recent sudden adverse developments in the global economic environment which have spread to this region and impacted negatively on business sentiments, IOI Corp decided not to proceed with the proposed acquisition,” it said.
IOI Corp said it had received a letter from the vendors’ solicitors dated Nov 26 that they were terminating the agreement and had forfeited RM73.36mil paid earlier by IOI Corp.
The plantation group said it was seeking legal advice on the quantum of the forfeiture.
IOI Corp had proposed to acquire the entire stake in Inverfin Sdn Bhd, which owns Menara Citibank, from Menara Citi Holding Co Sdn Bhd, CapitaLand Ltd and Amsteel Corp Bhd.
IOI Corp had early announced that its earnings fell 36% to RM290.5mil due to an unrealised translation loss on its dollar-denominated borrowings of RM212.2mil. It also included a foreign exchange loss of RM100.6mil in the July-September quarter.
Meanwhile, in a statement to the Singapore Stock Exchange, CapitaLand said it would recognise a gain of S$9.3mil after IOI Corp forfeited the deposit on its failure to pay the balance on the completion date for the transaction.
By The Star
November 26, 2008
Magna City project to be downsized
Magna Prima Bhd has downsized its Magna City project in Kuala Lumpur to RM600mil from RM1.1bil in gross development value (GDV) due to slowing growth, according to chief executive officer Lim Ching Choy.
“In view of the slowing economy, we reposition our development to suit the market demands,” Lim told StarBiz. “We (downsized) the development because we anticipated that the retail mall business would be tough going forward.”
Lim said the decision would also “lighten up” the company’s cash position, adding that the project’s profit margin could be maintained at 25% to 30% of sales value.
“Magna Prima is able to retain a healthy profit margin because we may not keep any of the assets in the amended RM600mil (project),” he said, revealing that the company had planned to retain 45% to 55% of the original project.
As of end of October, the group had RM230mil in unbilled sales.
The Magna City will have over 1.6mil square feet of net floor area while the construction is targeted to commence in the middle of 2009.
It sits on 10.23 acres of freehold land comprising 67 units of lifestyle shop offices, two levels of retail lots, two levels of corporate offices and 800 units of service apartments.
By The Star
“In view of the slowing economy, we reposition our development to suit the market demands,” Lim told StarBiz. “We (downsized) the development because we anticipated that the retail mall business would be tough going forward.”
Lim said the decision would also “lighten up” the company’s cash position, adding that the project’s profit margin could be maintained at 25% to 30% of sales value.
“Magna Prima is able to retain a healthy profit margin because we may not keep any of the assets in the amended RM600mil (project),” he said, revealing that the company had planned to retain 45% to 55% of the original project.
As of end of October, the group had RM230mil in unbilled sales.
The Magna City will have over 1.6mil square feet of net floor area while the construction is targeted to commence in the middle of 2009.
It sits on 10.23 acres of freehold land comprising 67 units of lifestyle shop offices, two levels of retail lots, two levels of corporate offices and 800 units of service apartments.
By The Star
November 25, 2008
Silver lining for developers
Launch-ready projects and high unbilled sales can help firms turn in commendable results
DEVELOPERS with a good line-up of pre-constructed projects for launch and high unbilled sales can look forward to commendable year-on-year financial results in the upcoming reporting season.
While most industry players have experienced an erosion in profit margin as a result of higher construction costs that started a year ago, companies that have projects in advanced stages of construction and recorded good take-up for their products will hold out well, performance-wise.
According to analysts’ estimates, Mah Sing Group Bhd is expected to turn in a higher net profit of RM98.7mil for its current financial year ending Dec 31 (FY08), from RM81.1mil in FY07, while revenue is set to rise to RM680.5mil from RM573.4mil.
In the first half of 2008, Mah Sing recorded sales of about RM263mil.
Mah Sing is one of the favourite picks for its sound balance sheet, strong branding and project execution capabilities.
Based on the company’s quick turnaround model, projects are usually launched six to nine months after land acquisition, although there could be some delay in the coming months following the softer market sentiment.
The company’s cash surplus of RM143mil as at Sept 30 will stand it in good stead to look for opportunistic acquisitions to expand its market presence.
In a research note, CIMB Research said Mah Sing was eyeing more land in Malaysia and hoped to wrap up several acquisitions over the next few months.
It is also scouting around for landbank in Vietnam, as the asking price for land should now be more realistic in view of the difficult market conditions there.
“Mah Sing is well-positioned to embark on more land acquisitions with its cash in hand, which should increase to RM213mil by mid-2009.
“It also has the capacity to borrow up to RM250mil should it choose to increase its net debt-to-equity ratio to a comfortable 0.5 time from 0.1 time in September,” the research house said.
Another developer with an identical financial year, United Malayan Land Bhd (UM Land), can expect some improvement for its third-quarter results following two quarters of losses.
The company recorded a loss of RM1.5mil for the first quarter ended March 31 and a further RM4mil loss in the following quarter.
However, on a year-on-year basis, UM Land’s results for FY08 are expected to be significantly short of last year’s.
In FY07, UM Land turned in a profit after-tax and minority interest of RM46mil on revenue of close to RM400mil.
The good response to its Suasana Sentral Loft condominiums in KL Sentral worth a gross development value (GDV) of more than RM300mil contributed to bottom line in FY06 and FY07.
Going forward, its latest project Suasana Bangsar, which was launched in July, will contribute to sales and earnings.
The project, with GDV of RM190mil, will take two to three years to complete.
Other projects in the pipeline will be a joint venture with MMC Corp Bhd to develop serviced residences in Persiaran Raja Chulan next year and a joint venture with Bolton Bhd to build high-end condominiums in Jalan Mayang, Kuala Lumpur, by 2010.
Meanwhile, companies which derive their income from investment property are in a better position to weather the current challenging market conditions as their rental income has been locked in.
Being the largest owner of superprime commercial properties in Kuala Lumpur City Centre (KLCC), the performance of KLCC Property Holdings Bhd is not expected to be much impacted by the market slowdown.
Hwang-DBS Vickers Research said the company had the most defensive earnings in the sector through locked-in rental income from blue-chip tenants on long-term leases.
It said KLCC Property’s earnings should continue to grow at a stable three-year cumulative average growth rate of 9%.
By The Star
DEVELOPERS with a good line-up of pre-constructed projects for launch and high unbilled sales can look forward to commendable year-on-year financial results in the upcoming reporting season.
While most industry players have experienced an erosion in profit margin as a result of higher construction costs that started a year ago, companies that have projects in advanced stages of construction and recorded good take-up for their products will hold out well, performance-wise.
According to analysts’ estimates, Mah Sing Group Bhd is expected to turn in a higher net profit of RM98.7mil for its current financial year ending Dec 31 (FY08), from RM81.1mil in FY07, while revenue is set to rise to RM680.5mil from RM573.4mil.
In the first half of 2008, Mah Sing recorded sales of about RM263mil.
Mah Sing is one of the favourite picks for its sound balance sheet, strong branding and project execution capabilities.
Based on the company’s quick turnaround model, projects are usually launched six to nine months after land acquisition, although there could be some delay in the coming months following the softer market sentiment.
The company’s cash surplus of RM143mil as at Sept 30 will stand it in good stead to look for opportunistic acquisitions to expand its market presence.
In a research note, CIMB Research said Mah Sing was eyeing more land in Malaysia and hoped to wrap up several acquisitions over the next few months.
It is also scouting around for landbank in Vietnam, as the asking price for land should now be more realistic in view of the difficult market conditions there.
“Mah Sing is well-positioned to embark on more land acquisitions with its cash in hand, which should increase to RM213mil by mid-2009.
“It also has the capacity to borrow up to RM250mil should it choose to increase its net debt-to-equity ratio to a comfortable 0.5 time from 0.1 time in September,” the research house said.
Another developer with an identical financial year, United Malayan Land Bhd (UM Land), can expect some improvement for its third-quarter results following two quarters of losses.
The company recorded a loss of RM1.5mil for the first quarter ended March 31 and a further RM4mil loss in the following quarter.
However, on a year-on-year basis, UM Land’s results for FY08 are expected to be significantly short of last year’s.
In FY07, UM Land turned in a profit after-tax and minority interest of RM46mil on revenue of close to RM400mil.
The good response to its Suasana Sentral Loft condominiums in KL Sentral worth a gross development value (GDV) of more than RM300mil contributed to bottom line in FY06 and FY07.
Going forward, its latest project Suasana Bangsar, which was launched in July, will contribute to sales and earnings.
The project, with GDV of RM190mil, will take two to three years to complete.
Other projects in the pipeline will be a joint venture with MMC Corp Bhd to develop serviced residences in Persiaran Raja Chulan next year and a joint venture with Bolton Bhd to build high-end condominiums in Jalan Mayang, Kuala Lumpur, by 2010.
Meanwhile, companies which derive their income from investment property are in a better position to weather the current challenging market conditions as their rental income has been locked in.
Being the largest owner of superprime commercial properties in Kuala Lumpur City Centre (KLCC), the performance of KLCC Property Holdings Bhd is not expected to be much impacted by the market slowdown.
Hwang-DBS Vickers Research said the company had the most defensive earnings in the sector through locked-in rental income from blue-chip tenants on long-term leases.
It said KLCC Property’s earnings should continue to grow at a stable three-year cumulative average growth rate of 9%.
By The Star
November 23, 2008
Ireka to build on i-Zen brand in Vietnam
IREKA Corp Bhd plans to aggressively grow the i-Zen brand for its overseas property development, especially in Vietnam, says executive director Lai Voon Hon.
“The Vietnamese market offers vast opportunities for the i-Zen brand, as the country has a young and educated population, strong foreign direct investment and a proactive government that promotes changes and liberalisation,” he told StarBiz.
He added that that the group was targeting the upper middle income segment in Vietnam.
i-Zen is an embodiment of quality products, contemporary lifestyle, high security, continued relationship with buyers, after-sales services and property management services.
Ireka’s property development in Vietnam is via its associate Aseana Properties Ltd. Currently, Aseana has seven projects in Malaysia and three in Vietnam.
Aseana’s joint ventures in Vietnam have an estimated gross development value of US$1.9bil. Its upcoming projects include Queen’s Place and Hi-Tech Healthcare Park, both in Ho Chi Minh City.
Queen’s Place sits on two acres and is a US$200mil joint-venture project in which Aseana owns 65%. It comprises residential units, offices and a retail mall.
Hi-Tech Healthcare Park is a US$420mil mixed commercial and residential development on 93 acres. It is 51%-owned by Aseana.
Lai said Mont’ Kiara had provided Ireka with the “branding showcase” and expertise to promote i-Zen outside Malaysia.
“The i-Zen brand has helped Ireka differentiate itself from others. This will not only benefit us during property launches but also allow buyers to command a premium resale value.
By The Star
“The Vietnamese market offers vast opportunities for the i-Zen brand, as the country has a young and educated population, strong foreign direct investment and a proactive government that promotes changes and liberalisation,” he told StarBiz.
He added that that the group was targeting the upper middle income segment in Vietnam.
i-Zen is an embodiment of quality products, contemporary lifestyle, high security, continued relationship with buyers, after-sales services and property management services.
Ireka’s property development in Vietnam is via its associate Aseana Properties Ltd. Currently, Aseana has seven projects in Malaysia and three in Vietnam.
Aseana’s joint ventures in Vietnam have an estimated gross development value of US$1.9bil. Its upcoming projects include Queen’s Place and Hi-Tech Healthcare Park, both in Ho Chi Minh City.
Queen’s Place sits on two acres and is a US$200mil joint-venture project in which Aseana owns 65%. It comprises residential units, offices and a retail mall.
Hi-Tech Healthcare Park is a US$420mil mixed commercial and residential development on 93 acres. It is 51%-owned by Aseana.
Lai said Mont’ Kiara had provided Ireka with the “branding showcase” and expertise to promote i-Zen outside Malaysia.
“The i-Zen brand has helped Ireka differentiate itself from others. This will not only benefit us during property launches but also allow buyers to command a premium resale value.
By The Star
Changing the face of PJ
A NEW generation of office buildings have mushroomed in several parts of Petaling Jaya over the past few years in tandem with growing demand for better office space outside the city centre.
However, as the economy faces tough challenges in view of the current global financial crisis, the local property market has also experienced a general slowdown. The consensus among property developers is that times would be “bad” next year, although few would admit it openly.
Some developers who joined the office market craze in Petaling Jaya in the past few years may be lucky as they have managed to complete their projects and sold or tenanted out most of their office and retail spaces.
These are the new generation strata office developments where some of them have retail components. They are mainly found along the Federal Highway (mostly purpose-built integrated offices like PJ City, PJ8) and in Section 13, 14 and 19 like Jaya 33, Jaya One, The Quill 9 and 3 Two Square.
Affluent townships like Bandar Utama and Taman Tun Dr Ismail (TTDI) are also seeing several new office projects (Menara Surian next to Ikano Power Centre and three in Bandar Utama City Centre viz Plaza IBM, KPMG Tower and 1, First Avenue. With Bandar Utama being awarded the MSC Cybercentre status in October, it would enhance the value of properties there).
Ken Group is also planning to build an office block in TTDI.
Coming up in the Kampung Kayu Area is 10 Boulevard and nearby, just after the Damansara toll plaza is the new Merchant Square.
There are many more being planned or under construction.
Those that have just been launched or just completed may face an uncertain future. This may be partly due to a softening market that is expected to get worse next year.
Although oil prices have dipped recently, there are still fears that it might jump next year, causing another round of fears and uncertainty. The global financial “tsunami” may hit our shores hard next year.
Meanwhile, a rough poll shows that generally the office market in Petaling Jaya, especially for the new developments, are holding up fairly well.
Businesses today want to be seen as progressive and not holed up in some old shop houses. They do not mind paying a premium to own or rent offices that are well located and have lots of amenities.
S K Brothers Realty Sdn Bhd general manager Chan Ai Cheng points out that employees are also choosy in not only who they are working for, but also where they work, as in location.
“An interesting thing while marketing 3 Two Square is that we noticed that businesses were moving out of the older shop offices and shop houses to new developments as their former image had made it difficult for them to hire staff, much less retain them. Young graduates today are looking at working in fine offices, and places with a nice address plus extra perks. It reflects the changing times,” she says, adding that many companies who had their roots in Petaling Jaya were also reluctant to relocate elsewhere.
SK Brothers, she says, is one such company that had bought office space in 3 Two Square which is very near its former office in Paramount Garden that it had been operating since 1979.
“When we bought our office space in 3 Two Square, prices were around RM260 psf to RM280 psf but it has since gone up. We transacted a unit at 3 Two Square early this year for RM315 psf. Recently, we transacted another office space just above our unit at RM380 psf. Office rental rates there are in the region of RM2.30 to RM2.70 psf,” says the daughter of SK Brothers founder Charlie Chan.
Chan says she has a friend who bought a unit at 3 Two Square a few months before completion and managed to almost immediately rent out her unit to a pharmaceutical company; for a year now, she has been enjoying rental returns of close to 10% per annum.
Chan says her company’s decision to buy a unit in 3 Two Square was based on factors such as accessibility, matured neighbourhood, track record of the developer, ample car park bays and unique features including its wide frontage lots with a minimum of 28ft for high advertising exposures.
She said Quill 9 at Jalan Semangat which is due for completion soon has BMW as its ground floor tenant. Developed by the Quill Group, it has big floor plates of 20,000 sq ft to 50,000 sq ft with rentals from RM4.30 psf.
“All these new developments are a welcoming change for residents of Petaling Jaya. I have lived in PJ all my life and in the early days there was only Jaya Supermarket and the Right Angle in Section 14,” she adds.
“Today with Jaya One, Jaya 33 and others, residents have more choices in terms of dining and shopping, As more companies relocate their offices here, it has also enabled PJ residents to find jobs nearer their homes. PJ people can now work in PJ and this has helped to reduce traffic jams and improve people’s life,” she adds.
Instead of developing traditional type shop houses, developers have differentiated themselves with new products and concepts.
For example, Jaya 33 has a hyper office concept, VSQ (pronounced as V Square) has corporate offices with serviced apartments, 3 Two Square is marketed as hybrid shop offices while Jaya One in Section 13 (along Jalan Universiti) has a mix of stand alone office block, and restaurants designed in courtyard styles.
The new projects along the Federal Highway include the newly completed PJ8, PJ City and fairly new Menara LYL.
A 6-storey office block with two basement car parks is under construction two lots from Menara LYL. These, along with Menara Axis, Crystal Plaza and the row of motor showrooms (Mercedes-Benz, Chevrolet, Mazda, Ssyangyong, VW, Naza World, Subaru and Ford on the opposite of the highway) are transforming this part of Petaling Jaya into a vibrant office cum retail hub.
However, as the economy faces tough challenges in view of the current global financial crisis, the local property market has also experienced a general slowdown. The consensus among property developers is that times would be “bad” next year, although few would admit it openly.
Some developers who joined the office market craze in Petaling Jaya in the past few years may be lucky as they have managed to complete their projects and sold or tenanted out most of their office and retail spaces.
These are the new generation strata office developments where some of them have retail components. They are mainly found along the Federal Highway (mostly purpose-built integrated offices like PJ City, PJ8) and in Section 13, 14 and 19 like Jaya 33, Jaya One, The Quill 9 and 3 Two Square.
Affluent townships like Bandar Utama and Taman Tun Dr Ismail (TTDI) are also seeing several new office projects (Menara Surian next to Ikano Power Centre and three in Bandar Utama City Centre viz Plaza IBM, KPMG Tower and 1, First Avenue. With Bandar Utama being awarded the MSC Cybercentre status in October, it would enhance the value of properties there).
Ken Group is also planning to build an office block in TTDI.
Coming up in the Kampung Kayu Area is 10 Boulevard and nearby, just after the Damansara toll plaza is the new Merchant Square.
There are many more being planned or under construction.
Those that have just been launched or just completed may face an uncertain future. This may be partly due to a softening market that is expected to get worse next year.
Although oil prices have dipped recently, there are still fears that it might jump next year, causing another round of fears and uncertainty. The global financial “tsunami” may hit our shores hard next year.
Meanwhile, a rough poll shows that generally the office market in Petaling Jaya, especially for the new developments, are holding up fairly well.
Businesses today want to be seen as progressive and not holed up in some old shop houses. They do not mind paying a premium to own or rent offices that are well located and have lots of amenities.
S K Brothers Realty Sdn Bhd general manager Chan Ai Cheng points out that employees are also choosy in not only who they are working for, but also where they work, as in location.
“An interesting thing while marketing 3 Two Square is that we noticed that businesses were moving out of the older shop offices and shop houses to new developments as their former image had made it difficult for them to hire staff, much less retain them. Young graduates today are looking at working in fine offices, and places with a nice address plus extra perks. It reflects the changing times,” she says, adding that many companies who had their roots in Petaling Jaya were also reluctant to relocate elsewhere.
SK Brothers, she says, is one such company that had bought office space in 3 Two Square which is very near its former office in Paramount Garden that it had been operating since 1979.
“When we bought our office space in 3 Two Square, prices were around RM260 psf to RM280 psf but it has since gone up. We transacted a unit at 3 Two Square early this year for RM315 psf. Recently, we transacted another office space just above our unit at RM380 psf. Office rental rates there are in the region of RM2.30 to RM2.70 psf,” says the daughter of SK Brothers founder Charlie Chan.
Chan says she has a friend who bought a unit at 3 Two Square a few months before completion and managed to almost immediately rent out her unit to a pharmaceutical company; for a year now, she has been enjoying rental returns of close to 10% per annum.
Chan says her company’s decision to buy a unit in 3 Two Square was based on factors such as accessibility, matured neighbourhood, track record of the developer, ample car park bays and unique features including its wide frontage lots with a minimum of 28ft for high advertising exposures.
She said Quill 9 at Jalan Semangat which is due for completion soon has BMW as its ground floor tenant. Developed by the Quill Group, it has big floor plates of 20,000 sq ft to 50,000 sq ft with rentals from RM4.30 psf.
“All these new developments are a welcoming change for residents of Petaling Jaya. I have lived in PJ all my life and in the early days there was only Jaya Supermarket and the Right Angle in Section 14,” she adds.
“Today with Jaya One, Jaya 33 and others, residents have more choices in terms of dining and shopping, As more companies relocate their offices here, it has also enabled PJ residents to find jobs nearer their homes. PJ people can now work in PJ and this has helped to reduce traffic jams and improve people’s life,” she adds.
Instead of developing traditional type shop houses, developers have differentiated themselves with new products and concepts.
For example, Jaya 33 has a hyper office concept, VSQ (pronounced as V Square) has corporate offices with serviced apartments, 3 Two Square is marketed as hybrid shop offices while Jaya One in Section 13 (along Jalan Universiti) has a mix of stand alone office block, and restaurants designed in courtyard styles.
The new projects along the Federal Highway include the newly completed PJ8, PJ City and fairly new Menara LYL.
A 6-storey office block with two basement car parks is under construction two lots from Menara LYL. These, along with Menara Axis, Crystal Plaza and the row of motor showrooms (Mercedes-Benz, Chevrolet, Mazda, Ssyangyong, VW, Naza World, Subaru and Ford on the opposite of the highway) are transforming this part of Petaling Jaya into a vibrant office cum retail hub.
November 20, 2008
TA Enterprise aims to list property arm in Q1
TA Enterprise Bhd expects to list its property arm TA Global Bhd on the main board in the first quarter of next year following the Securities Commission’s approval recently.
Managing director and chief executive officer Datin Alicia Tiah said the group was arranging with the underwriters on the portion of shares to be allocated to bumiputras.
“Initial public offerings (IPOs) in recent times were not fully subscribed.
“I think we would need to see how we are going to allocate the bumiputra portion following the Government’s relaxation of the rules,” she said.
The Government recently announced that it was relaxing the minimum 30% bumiputra equity requirement for public-listed firms. TA Enterprise had earlier targeted to list TA Global by next month.
TA Global’s listing exercise involves a proposed rights issue of 860 million new shares and a public issue of 350 million new shares at 50 sen per share.
TA Enterprise had earlier proposed to sell 875 million TA Global shares to bumiputra investors. It also proposed a capital distribution to shareholders via a share capital reduction from RM1 per share to 50 sen.
The proceeds from the proposals would total RM437.5mil. TA Enterprise is expected to recognise a capital gain of RM924.9mil.
Although the group is cash-rich, Tiah said, it would still want to raise more funds through an IPO because it needed more cash to buy assets at this time as the prices of properties were easing.
As of July 31, the group’s net cash and cash equivalents totalled RM451mil.
“We would still need more cash if we were to buy assets overseas.
“For investments in Australia, the weakening Australian dollar vis-a-vis the ringgit would enable TA Global to buy more properties there,” she said.
It currently owns Radisson Plaza Hotel in Sydney that had an average occupancy rate of 82% in July and a market value of A$120mil.
“Everything is at a discount now and I would say there’s about 25% discount from currency gains due to the strengthening of the ringgit (against the Australian dollar),” she said.
Furthermore, Tiah said, it was a good time to buy properties now because many prime properties held by hedge funds are available following a massive redemption by hedge funds.
“That is why this IPO is very important to us. If we are successful in raising the money, this would create an opportunity for the group to buy good assets with highly discounted prices,” she said.
Meanwhile, deputy chief executive officer Tiah Joo Kim told StarBiz that TA Global would launch an international brand for the newly acquired RM107mil Coast Whistler hotel by the first half of next year.
He said the group would develop hotels that carried its own brand, complete with different concepts and themes.
“We want to study the market segments and create different themes and concepts to suit the different market segments,” he said, adding that the acquisition of Coast Whistler would be completed by next month.
Joo Kim said TA Global would also develop a mixed development project worth some RM1.27bil on 3.3 acres at the corner of Jalan Imbi and Jalan Bukit Bintang, Kuala Lumpur.
By The Star
Managing director and chief executive officer Datin Alicia Tiah said the group was arranging with the underwriters on the portion of shares to be allocated to bumiputras.
“Initial public offerings (IPOs) in recent times were not fully subscribed.
“I think we would need to see how we are going to allocate the bumiputra portion following the Government’s relaxation of the rules,” she said.
The Government recently announced that it was relaxing the minimum 30% bumiputra equity requirement for public-listed firms. TA Enterprise had earlier targeted to list TA Global by next month.
TA Global’s listing exercise involves a proposed rights issue of 860 million new shares and a public issue of 350 million new shares at 50 sen per share.
TA Enterprise had earlier proposed to sell 875 million TA Global shares to bumiputra investors. It also proposed a capital distribution to shareholders via a share capital reduction from RM1 per share to 50 sen.
The proceeds from the proposals would total RM437.5mil. TA Enterprise is expected to recognise a capital gain of RM924.9mil.
Although the group is cash-rich, Tiah said, it would still want to raise more funds through an IPO because it needed more cash to buy assets at this time as the prices of properties were easing.
As of July 31, the group’s net cash and cash equivalents totalled RM451mil.
“We would still need more cash if we were to buy assets overseas.
“For investments in Australia, the weakening Australian dollar vis-a-vis the ringgit would enable TA Global to buy more properties there,” she said.
It currently owns Radisson Plaza Hotel in Sydney that had an average occupancy rate of 82% in July and a market value of A$120mil.
“Everything is at a discount now and I would say there’s about 25% discount from currency gains due to the strengthening of the ringgit (against the Australian dollar),” she said.
Furthermore, Tiah said, it was a good time to buy properties now because many prime properties held by hedge funds are available following a massive redemption by hedge funds.
“That is why this IPO is very important to us. If we are successful in raising the money, this would create an opportunity for the group to buy good assets with highly discounted prices,” she said.
Meanwhile, deputy chief executive officer Tiah Joo Kim told StarBiz that TA Global would launch an international brand for the newly acquired RM107mil Coast Whistler hotel by the first half of next year.
He said the group would develop hotels that carried its own brand, complete with different concepts and themes.
“We want to study the market segments and create different themes and concepts to suit the different market segments,” he said, adding that the acquisition of Coast Whistler would be completed by next month.
Joo Kim said TA Global would also develop a mixed development project worth some RM1.27bil on 3.3 acres at the corner of Jalan Imbi and Jalan Bukit Bintang, Kuala Lumpur.
By The Star
November 19, 2008
Hektar REIT sees steady rentals next year
Income to be driven by high occupancy rates of retail properties
Hektar Real Estate Investment Trust (Hektar REIT) is expecting stable rental incomes next year due to the high occupancy rate of its retail properties as well as a positive trend in its rentals.
The REIT also sees less impact from the economic slowdown as its portfolio consists of the more resilient neigbourhood shopping malls.
Hektar Asset Management Sdn Bhd, the manager of Hektar REIT, said as of the third quarter of this year, the occupancy rate of its retail properties was a solid 96.8%.
“With the majority of our income secured by multi-year leases (three to four years), we will have stable income in 2009,” Hektar Asset executive director and chief financial officer Zalila Mohd Toon told StarBiz.
Zalila said Hektar REIT, which currently owns a property portfolio valued at around RM700mil, remained positive on rental rates.
As at end September, rental rates for 30 new or renewed tenancies in its portfolio had increased by an average of 6%.
Hektar REIT’s retail properties are mainly suburban and neighbourhood malls, which are smaller than regional or city malls.
Its portfolio consists of Subang Parade in Subang, Mahkota Parade in Malacca and Wetex Parade in Muar, Johor.
Hektar REIT now owns more than one million sq ft of space and has over 300 retailers in its portfolio.
The size of neighbourhood malls averages around 500,000 sq ft, or about half the size of so-called regional malls like Suria KLCC.
Zalila said a neighbourhood mall, like Subang Parade, was focused in two ways.
Firstly, it was geared toward serving the surrounding communities living within 15 minutes’ driving distance.
Secondly, the tenant mix was concentrated on basic goods and necessities, and other lifestyle elements, but not luxury items.
“Therefore, we think neighbourhood malls have a more resilient business model than the larger regional malls in difficult times (recession),” Zalila said.
Hektar REIT has also kept track of their retailers’ performance.
“More than 90% of our retailers in Subang and Mahkota Parade so far reported that their sales figures remained intact,” Zalila said.
On the flip side, she said when the economy was booming, the regional malls could do better as they could charge higher rental rates.
“The challenging financial market and stock market, in general, has not affected the operating environment for Hektar REIT’s retail assets at this time,” she said.
Going forward, Zalila said Hektar REIT would continue to focus on completed or nearly completed retail assets, and it would grow its asset base via acquisitions.
According to the Malaysian Valuation and Property Services Department, there is close to 90 million sq ft of shopping centre net lettable area, or space for rent, in Malaysia.
“That means we have a market share of just over 1%,” Zalila said. “We see big opportunities for growth and development, particularly outside of the Klang Valley as almost a quarter of Malaysia’s shopping centre space is in Kuala Lumpur.”
On the impact of the global credit crunch, Zalila said in terms of securing financing in Malaysia, the REIT had long-term relationships with major financiers.
For the financial year ended Sept 30, Hektar REIT generated a total revenue of RM61.98mil, of which RM61.83mil was from rentals.
It also declared a dividend of 2.4 sen per unit.
By The Star
Hektar Real Estate Investment Trust (Hektar REIT) is expecting stable rental incomes next year due to the high occupancy rate of its retail properties as well as a positive trend in its rentals.
The REIT also sees less impact from the economic slowdown as its portfolio consists of the more resilient neigbourhood shopping malls.
Hektar Asset Management Sdn Bhd, the manager of Hektar REIT, said as of the third quarter of this year, the occupancy rate of its retail properties was a solid 96.8%.
“With the majority of our income secured by multi-year leases (three to four years), we will have stable income in 2009,” Hektar Asset executive director and chief financial officer Zalila Mohd Toon told StarBiz.
Zalila said Hektar REIT, which currently owns a property portfolio valued at around RM700mil, remained positive on rental rates.
As at end September, rental rates for 30 new or renewed tenancies in its portfolio had increased by an average of 6%.
Hektar REIT’s retail properties are mainly suburban and neighbourhood malls, which are smaller than regional or city malls.
Its portfolio consists of Subang Parade in Subang, Mahkota Parade in Malacca and Wetex Parade in Muar, Johor.
Hektar REIT now owns more than one million sq ft of space and has over 300 retailers in its portfolio.
The size of neighbourhood malls averages around 500,000 sq ft, or about half the size of so-called regional malls like Suria KLCC.
Zalila said a neighbourhood mall, like Subang Parade, was focused in two ways.
Firstly, it was geared toward serving the surrounding communities living within 15 minutes’ driving distance.
Secondly, the tenant mix was concentrated on basic goods and necessities, and other lifestyle elements, but not luxury items.
“Therefore, we think neighbourhood malls have a more resilient business model than the larger regional malls in difficult times (recession),” Zalila said.
Hektar REIT has also kept track of their retailers’ performance.
“More than 90% of our retailers in Subang and Mahkota Parade so far reported that their sales figures remained intact,” Zalila said.
On the flip side, she said when the economy was booming, the regional malls could do better as they could charge higher rental rates.
“The challenging financial market and stock market, in general, has not affected the operating environment for Hektar REIT’s retail assets at this time,” she said.
Going forward, Zalila said Hektar REIT would continue to focus on completed or nearly completed retail assets, and it would grow its asset base via acquisitions.
According to the Malaysian Valuation and Property Services Department, there is close to 90 million sq ft of shopping centre net lettable area, or space for rent, in Malaysia.
“That means we have a market share of just over 1%,” Zalila said. “We see big opportunities for growth and development, particularly outside of the Klang Valley as almost a quarter of Malaysia’s shopping centre space is in Kuala Lumpur.”
On the impact of the global credit crunch, Zalila said in terms of securing financing in Malaysia, the REIT had long-term relationships with major financiers.
For the financial year ended Sept 30, Hektar REIT generated a total revenue of RM61.98mil, of which RM61.83mil was from rentals.
It also declared a dividend of 2.4 sen per unit.
By The Star
Breakthrough in interior partitions
HPS Partition System by SGO understands many homes would be well served with a customised partition.
Purchasing an interior partition here is like engaging a personal interior consultant.
With over 14 years' experience in decorative architectural glass and exposure to many prominent, challenging homes and designers, SGO can help turn your home interior from ordinary to extraordinary.
''Working with SGO HPS system is like getting your very own signature. We combine art and design to build a partition system to your requirements,'' said business manager of HPS system Amanda Goh.
''You can mix and match, position cabinet storage and define shelf sizes your way. You can make future expansions to a current HPS partition or even relocate it with ease.''
You will get to view your ideas in print before the job commences.
Choose from designer art glass pieces of English Victorian design to serene natural scenes and playful abstract modern contemporary designs.
By The Star
Purchasing an interior partition here is like engaging a personal interior consultant.
With over 14 years' experience in decorative architectural glass and exposure to many prominent, challenging homes and designers, SGO can help turn your home interior from ordinary to extraordinary.
''Working with SGO HPS system is like getting your very own signature. We combine art and design to build a partition system to your requirements,'' said business manager of HPS system Amanda Goh.
''You can mix and match, position cabinet storage and define shelf sizes your way. You can make future expansions to a current HPS partition or even relocate it with ease.''
You will get to view your ideas in print before the job commences.
Choose from designer art glass pieces of English Victorian design to serene natural scenes and playful abstract modern contemporary designs.
By The Star
November 18, 2008
Property roadshow to attract Japanese investors
MALAYSIA Property Inc (MPI) will kick off its maiden international property roadshow in Tokyo on Dec 6 and 7 to attract Japanese institutional investors to Malaysia’s shores.
According to executive director Yu Kee Su, the two-day roadshow will project the advantages of Malaysia as a property destination.
”In Malaysia, foreigners can buy an unlimited number of property; register the property under their names; and there is no real property gains tax, inheritance and transfer tax. In Japan, these taxes are as high as 60%,” Yu pointed out.
He said with the Japanese yen now at its strongest, “Japanese investors buying properties overseas will get an immediate 20% discount, at the current exchange rate.”
“Japan’s strong yen and the Japanese government’s decision to allow its real estate investment trusts (REITs) to invest overseas will promote greater interest among its investors in Malaysia’s property.”
Yu expressed confidence that the road show would be well-received in spite of the current global economic uncertainties.
The Tokyo road show is the first of the Far East’s property promotions by MPI, a joint public and private sector initiative formed early this year to promote Malaysia’s property internationally, that will also cover Britain and the Middle East in the coming months.
“It is a challenge to the organizers to ensure the success of the Tokyo road show as there has yet to be any Japanese institutional investors in Malaysian properties,” Yu said.
Under Malaysia My Second Home (MM2H) programme, Malaysia is already a top choice among Japanese for long stays and retirement.
“There are already investors from the Middle East and South Korea buying our local property en bloc and off the plan but none yet from Japan. We hope the road show will change that,” Yu said.
MPI is organising the road show with Ohana International Co Ltd as the event manager. It has the support of the Japan Travel Bureau (JBT) and the Long Stay Foundation (LSF), both of which have brought in record numbers of Japanese retirees under MM2H.
Also partnering in the Japan road show entitled “Luxurious Malaysia, long-stay, property and financial fair” at the Mitsui Life Insurance Hall, Otemachi Tokyo, are HSBC Tokyo and Mitsui Life Insurance. Both will send direct mail and emails to their vast clientele of the upcoming road show.
Some 1,000 prospective clients are invited including institutional investors such as Ishin Hotel REIT Management, RETEC Co Ltd, Orix Property, Hotel Management International, ING Property Investment Advisory Co Ltd, Renessance Capital, Star Asset Management, Goldman Sachs Realty Japan, Toyo Securities Co., Ltd, and Shinko Securities Co, Ltd.
Yu said participating developers in the road show would be invited for roundtable discussions and meet Japanese REIT investors and fund managers at private meetings and at business matching sessions during their stay.
Keen Japanese investors can join Ohana’s “Discover Malaysian Property Tour” to visit and familiarize themselves with the local property market assisted by the participating Malaysian developers.
Ishihara Shotaro, a MPI board advisor, said cash-rich Japan was lagging behind the US and Britain in foreign investment.
“The time is right to promote Malaysia’s property in Japan as the stronger yen against other currencies would make living cost and property prices much cheaper,” he said.
By The Star
According to executive director Yu Kee Su, the two-day roadshow will project the advantages of Malaysia as a property destination.
”In Malaysia, foreigners can buy an unlimited number of property; register the property under their names; and there is no real property gains tax, inheritance and transfer tax. In Japan, these taxes are as high as 60%,” Yu pointed out.
He said with the Japanese yen now at its strongest, “Japanese investors buying properties overseas will get an immediate 20% discount, at the current exchange rate.”
“Japan’s strong yen and the Japanese government’s decision to allow its real estate investment trusts (REITs) to invest overseas will promote greater interest among its investors in Malaysia’s property.”
Yu expressed confidence that the road show would be well-received in spite of the current global economic uncertainties.
The Tokyo road show is the first of the Far East’s property promotions by MPI, a joint public and private sector initiative formed early this year to promote Malaysia’s property internationally, that will also cover Britain and the Middle East in the coming months.
“It is a challenge to the organizers to ensure the success of the Tokyo road show as there has yet to be any Japanese institutional investors in Malaysian properties,” Yu said.
Under Malaysia My Second Home (MM2H) programme, Malaysia is already a top choice among Japanese for long stays and retirement.
“There are already investors from the Middle East and South Korea buying our local property en bloc and off the plan but none yet from Japan. We hope the road show will change that,” Yu said.
MPI is organising the road show with Ohana International Co Ltd as the event manager. It has the support of the Japan Travel Bureau (JBT) and the Long Stay Foundation (LSF), both of which have brought in record numbers of Japanese retirees under MM2H.
Also partnering in the Japan road show entitled “Luxurious Malaysia, long-stay, property and financial fair” at the Mitsui Life Insurance Hall, Otemachi Tokyo, are HSBC Tokyo and Mitsui Life Insurance. Both will send direct mail and emails to their vast clientele of the upcoming road show.
Some 1,000 prospective clients are invited including institutional investors such as Ishin Hotel REIT Management, RETEC Co Ltd, Orix Property, Hotel Management International, ING Property Investment Advisory Co Ltd, Renessance Capital, Star Asset Management, Goldman Sachs Realty Japan, Toyo Securities Co., Ltd, and Shinko Securities Co, Ltd.
Yu said participating developers in the road show would be invited for roundtable discussions and meet Japanese REIT investors and fund managers at private meetings and at business matching sessions during their stay.
Keen Japanese investors can join Ohana’s “Discover Malaysian Property Tour” to visit and familiarize themselves with the local property market assisted by the participating Malaysian developers.
Ishihara Shotaro, a MPI board advisor, said cash-rich Japan was lagging behind the US and Britain in foreign investment.
“The time is right to promote Malaysia’s property in Japan as the stronger yen against other currencies would make living cost and property prices much cheaper,” he said.
By The Star
Seberang Prai offers lower construction cost
KNOWN as Seberang Prai or Province Wellesley, the 756sq km land mass, separated from the island by a 13.5km bridge, is the only area in Penang where landed properties are still attractively priced.
The cost to build a three-storey terraced property, taking into consideration land and construction cost, is between RM200,000 and RM230,000 while launch prices for such properties are usually from RM280,000 onwards, depending on the location of the project.
On the island, the combined land and construction cost to build a three-storey house of about 3,200sq ft on the is between RM700,000 and RM750,000, while launch prices start from between RM800,000 and RM900,000.
The combined land and construction cost to build a 1,000sq ft high-rise unit is over RM280,000, and the property is priced in the market at RM400,000 and above.
Developers are not only attracted to build homes in Seberang Perai due to its lower cost but also because of the new manufacturing activities that have located there thereby creating jobs and demand for affordable housing.
While a recession might be around the corner, developers are still planning to launch residential properties although they are more cautious.
The growth areas for property projects are in Juru, Bukit Mertajam, Alma, and Seberang Jaya in Central Seberang Prai, Simpang Ampat, Bukit Tambun, and Jawi in South Seberang Prai, and Jalan Raja Uda and Butterworth town in North Seberang Prai.
Several developers said the Central Seberang Prai was attractive to them due to the industrial estate located within the district. DNP Land Sdn Bhd, a subsidiary of DNP Holdings Bhd, is focused on developing its landbank in the area, which saw the fastest population growth on the mainland.
Tambun Indah managing director Teh Kiak Seng told Starbiz that the type of project a developer would launch in the area depended on location. “For example, in Juru, where it is close to the factories and to the Auto-City, we launched the Juru Heights, which has a gross sales value of RM250mil.
The Real Estate and Housing Developers’ Association Penang chapter chairman Datuk Jerry Chan said there would be a slowdown in the launching of new development schemes next year, due to the global recession.
He said banks would be stricter in providing financing to developers or home buyers.
By The Star
The cost to build a three-storey terraced property, taking into consideration land and construction cost, is between RM200,000 and RM230,000 while launch prices for such properties are usually from RM280,000 onwards, depending on the location of the project.
On the island, the combined land and construction cost to build a three-storey house of about 3,200sq ft on the is between RM700,000 and RM750,000, while launch prices start from between RM800,000 and RM900,000.
The combined land and construction cost to build a 1,000sq ft high-rise unit is over RM280,000, and the property is priced in the market at RM400,000 and above.
Developers are not only attracted to build homes in Seberang Perai due to its lower cost but also because of the new manufacturing activities that have located there thereby creating jobs and demand for affordable housing.
While a recession might be around the corner, developers are still planning to launch residential properties although they are more cautious.
The growth areas for property projects are in Juru, Bukit Mertajam, Alma, and Seberang Jaya in Central Seberang Prai, Simpang Ampat, Bukit Tambun, and Jawi in South Seberang Prai, and Jalan Raja Uda and Butterworth town in North Seberang Prai.
Several developers said the Central Seberang Prai was attractive to them due to the industrial estate located within the district. DNP Land Sdn Bhd, a subsidiary of DNP Holdings Bhd, is focused on developing its landbank in the area, which saw the fastest population growth on the mainland.
Tambun Indah managing director Teh Kiak Seng told Starbiz that the type of project a developer would launch in the area depended on location. “For example, in Juru, where it is close to the factories and to the Auto-City, we launched the Juru Heights, which has a gross sales value of RM250mil.
The Real Estate and Housing Developers’ Association Penang chapter chairman Datuk Jerry Chan said there would be a slowdown in the launching of new development schemes next year, due to the global recession.
He said banks would be stricter in providing financing to developers or home buyers.
By The Star
Danga Bay developer to launch RM350mil upgrading programme
Danga Bay Sdn Bhd (DBSB), which owns the waterfront land in the Iskandar Malaysia, will launch a RM350mil upgrading programme to introduce new attractions in Danga Bay.
DBSB chief executive officer Datuk Lim Kang Hoo said the programme, under phase one of the Danga Bay development masterplan, would start next year.
“The projects are scheduled to be fully operational by 2011. The programme will include building a marina club, Bay Leaf Convention & Exhibition Centre, multi-storey car park, budget hotel and office block,” he told a media briefing after an aerial tour of the area on Saturday.
Lim said the marina club, which would be extended by 500 metres with berths for 250 yachts, was expected to be ready by mid-2009
By The Star
DBSB chief executive officer Datuk Lim Kang Hoo said the programme, under phase one of the Danga Bay development masterplan, would start next year.
“The projects are scheduled to be fully operational by 2011. The programme will include building a marina club, Bay Leaf Convention & Exhibition Centre, multi-storey car park, budget hotel and office block,” he told a media briefing after an aerial tour of the area on Saturday.
Lim said the marina club, which would be extended by 500 metres with berths for 250 yachts, was expected to be ready by mid-2009
By The Star
November 9, 2008
Mideast confidence in Bukit Kiara Properties
The UAE-based Al Batha group, which invested RM42mil in a joint venture with Malaysia’s unlisted Bukit Kiara Properties group, highlights Middle-east companies’ interest in well-managed Malaysian companies.
However, the relationship between the diversified Al Batha group and Bukit Kiara group went beyond profits and it was built on common values, ethics and integrity.
Bukit Kiara Properties Sdn Bhd managing director Tong Nguen Khoong said three years ago, a representative of Al Batha group expressed interest in the properties built by the company.
This saw the Al Batha group, which is involved from automobiles, manufacturing, electronics and real estate, buying a few properties in Bukit Kiara’s Hijauan Kiara apartments.
This was followed by purchases in its first and second tower of the Verve Suites over the past 18 months.
“During this period, both companies got to know each other better,” he said, as both parties took cognisance of each other’s common values, ethics and integrity.
Tong said he remembered a conversation he had with Al Batha vice chairman Sheik Salem bin Mohammed Al Qassimi when Al Batha expressed interest in co-developing Bukit Kiara’s second tower of the Verve Suites.
He remarked to Sheik Salem that Al Batha would be better off as an investor in the project than as a co-developer because “our profit margins are very reasonable and we offer good value to our customers”.
He also recalled Sheikh Salem’s reply that making a reasonable profit but not exorbitant profit was good. This viewpoint was also consistent with Bukit Kiara group’s values.
“Later, this became the catalyst for discussion of investing into the Bukit Kiara group at the holding level,” he said.
Tong said with Al Batha group at the holding level was better instead of being co-investor on a project-by-project basis which would be too ad-hoc.
This led to the formation of the JV company - Al Batha Bukit Kiara Holdings Sdn Bhd (ABBK).
The JV, formalised in Dubai on Oct 20, would see Bukit Kiara group injecting properties with a gross development value of RM700mil.
The JV would provide Al Batha group a foothold into the global market where it intends to have its operations or JVs with overseas companies.
Tong said the paid-up capital of ABBK would be increased to RM105mil, following the injection of RM42mil for the 40% stake in ABBK.
Before Bukit Kiara group started discussions with the Al Batha group, an insurance company had earlier expressed interest to team up with the former.
“However, the insurance company’s focus was on returns in investments only, while we wanted to look at a longer-term partnership,” Tong added.
For the Bukit Kiara group, it has an opportunity to learn from the Al Batha group in the area of long-term growth as it is a huge conglomerate, he said.
“The future for the group is very bright and opens up the possibility of new growth areas to attract Middle-east investors. In the past, investors gave Malaysia a miss because of its small size,” he said.
Tong said once the critical mass was built up, Malaysians could expect to attract more foreign interest, especially from the Middle-east.
“We are looking at a 10 to 15 year horizon. The Middle-east market will create opportunities for Malaysians to venture out,” he added.
By The Star
However, the relationship between the diversified Al Batha group and Bukit Kiara group went beyond profits and it was built on common values, ethics and integrity.
Bukit Kiara Properties Sdn Bhd managing director Tong Nguen Khoong said three years ago, a representative of Al Batha group expressed interest in the properties built by the company.
This saw the Al Batha group, which is involved from automobiles, manufacturing, electronics and real estate, buying a few properties in Bukit Kiara’s Hijauan Kiara apartments.
This was followed by purchases in its first and second tower of the Verve Suites over the past 18 months.
“During this period, both companies got to know each other better,” he said, as both parties took cognisance of each other’s common values, ethics and integrity.
Tong said he remembered a conversation he had with Al Batha vice chairman Sheik Salem bin Mohammed Al Qassimi when Al Batha expressed interest in co-developing Bukit Kiara’s second tower of the Verve Suites.
He remarked to Sheik Salem that Al Batha would be better off as an investor in the project than as a co-developer because “our profit margins are very reasonable and we offer good value to our customers”.
He also recalled Sheikh Salem’s reply that making a reasonable profit but not exorbitant profit was good. This viewpoint was also consistent with Bukit Kiara group’s values.
“Later, this became the catalyst for discussion of investing into the Bukit Kiara group at the holding level,” he said.
Tong said with Al Batha group at the holding level was better instead of being co-investor on a project-by-project basis which would be too ad-hoc.
This led to the formation of the JV company - Al Batha Bukit Kiara Holdings Sdn Bhd (ABBK).
The JV, formalised in Dubai on Oct 20, would see Bukit Kiara group injecting properties with a gross development value of RM700mil.
The JV would provide Al Batha group a foothold into the global market where it intends to have its operations or JVs with overseas companies.
Tong said the paid-up capital of ABBK would be increased to RM105mil, following the injection of RM42mil for the 40% stake in ABBK.
Before Bukit Kiara group started discussions with the Al Batha group, an insurance company had earlier expressed interest to team up with the former.
“However, the insurance company’s focus was on returns in investments only, while we wanted to look at a longer-term partnership,” Tong added.
For the Bukit Kiara group, it has an opportunity to learn from the Al Batha group in the area of long-term growth as it is a huge conglomerate, he said.
“The future for the group is very bright and opens up the possibility of new growth areas to attract Middle-east investors. In the past, investors gave Malaysia a miss because of its small size,” he said.
Tong said once the critical mass was built up, Malaysians could expect to attract more foreign interest, especially from the Middle-east.
“We are looking at a 10 to 15 year horizon. The Middle-east market will create opportunities for Malaysians to venture out,” he added.
By The Star
IJM Land banks on niche projects
WITH a number of lifestyle residential projects in its stable, IJM Land Bhd can look forward to riding out the current soft property market by focusing on its niche projects in Kuala Lumpur, Penang and Johor Baru.
For the financial year ending March 31, 2009 (FY09), the company expects to maintain sales at around RM800mil to RM900mil, especially from new project launches in Penang and Johor Baru, and ongoing developments in Kuala Lumpur and the Klang Valley.
Sales hit RM1bil for FY08.
Unless the market takes a turn for the worse, IJM Land is looking at 20 new project launches worth a total gross development value (GDV) of close to RM1bil over the next 12 months.
Managing director Datuk Soam Heng Choon said the market slowdown had affected mainly the mass market and lower product segments while the medium-high to high-end sector was still showing potential.
“We will focus on medium, medium-high and high-end products that are priced from RM300,000 to RM7.2mil a unit in good locations,” Soam said.
IJM Land now has more than 60 projects in various parts of the country and is reviewing the launches.
He said should conditions deteriorate, “there is a possibility of holding back some of the projects, which may also include the high priced products if demand falls.”
Soam expects the sales of the medium high-end and high-end properties to mitigate the margin squeeze in the lower-end product segment.
He said one of IJM Land’s strengths was having a broad product range in a geographically diversified market across the country.
“This allows the company the flexibility to tweak its product mix and product specifications to suit the current market conditions.
“We have also been prudent in ensuring our projects are located in prime locations and this has kept our projects in the radar screen of buyers, especially those looking for premier properties,” he pointed out.
Being low-rise and low density, Ampersand located in the highly sought after address in Jalan Kia Peng, Kuala Lumpur, stands out among the other high-rise condominium developments in the Kuala Lumpur City Centre (KLCC) area.
The 71 luxurious apartments with built up of 3,000 sq ft to 5,800 sq ft are priced from RM3mil to RM7.2mil, or an average price of RM1,200 per sq ft.
The price has almost doubled from the time when the project was first launched early last year. About 50% of the units have been sold to-date and the project will be completed next year.
In Penang, the maiden launch of IJM Land’s flagship project, The Light will take place in the first quarter next year.
The first residential project called The Light Linear to be launched in the first quarter will have a GDV of RM150mil while Light Point with a GDV of RM90mil will be launched few weeks after that.
The Light Linear will have 328 units with built-up from 1,379 to 1,513 sq ft, while the more spacious The Light Point units are from 1,807 to 4,000 sq ft.
The Light, a RM4.5bil residential and commercial development on Penang islands’ eastern coastline, will be developed over 12 years.
The residential precinct will have 1,186 residences, including waterfront villas and condominiums.
The commercial precinct will comprise office buildings, four hotels, retail malls, dining and entertainment facilities, a seafront park, floating restaurants and facilities for meetings, incentives, conventions and exhibitions.
In Johor Baru, IJM Land is planning to launch its latest development, Nusa Duta on 127 acres in the Iskandar Development Region by the first half of next year. The RM320mil project will comprise mainly landed properties that are priced from RM300,000.
To tap the foreign market, Soam said IJM Land was also resorting to marketing its high-end residences to participants of Malaysia My Second Home programme.
The maiden event was undertaken recently in Seoul to promote the Pearl Regency project to South Korean buyers.
“There is still good interest for quality Malaysian residential products among the Koreans and we plan to promote some of our other projects there in future,” he added.
Soam said property roadshows would also be held in the Middle Eat and Japan next year.
By The Star
For the financial year ending March 31, 2009 (FY09), the company expects to maintain sales at around RM800mil to RM900mil, especially from new project launches in Penang and Johor Baru, and ongoing developments in Kuala Lumpur and the Klang Valley.
Sales hit RM1bil for FY08.
Unless the market takes a turn for the worse, IJM Land is looking at 20 new project launches worth a total gross development value (GDV) of close to RM1bil over the next 12 months.
Managing director Datuk Soam Heng Choon said the market slowdown had affected mainly the mass market and lower product segments while the medium-high to high-end sector was still showing potential.
“We will focus on medium, medium-high and high-end products that are priced from RM300,000 to RM7.2mil a unit in good locations,” Soam said.
IJM Land now has more than 60 projects in various parts of the country and is reviewing the launches.
He said should conditions deteriorate, “there is a possibility of holding back some of the projects, which may also include the high priced products if demand falls.”
Soam expects the sales of the medium high-end and high-end properties to mitigate the margin squeeze in the lower-end product segment.
He said one of IJM Land’s strengths was having a broad product range in a geographically diversified market across the country.
“This allows the company the flexibility to tweak its product mix and product specifications to suit the current market conditions.
“We have also been prudent in ensuring our projects are located in prime locations and this has kept our projects in the radar screen of buyers, especially those looking for premier properties,” he pointed out.
Being low-rise and low density, Ampersand located in the highly sought after address in Jalan Kia Peng, Kuala Lumpur, stands out among the other high-rise condominium developments in the Kuala Lumpur City Centre (KLCC) area.
The 71 luxurious apartments with built up of 3,000 sq ft to 5,800 sq ft are priced from RM3mil to RM7.2mil, or an average price of RM1,200 per sq ft.
The price has almost doubled from the time when the project was first launched early last year. About 50% of the units have been sold to-date and the project will be completed next year.
In Penang, the maiden launch of IJM Land’s flagship project, The Light will take place in the first quarter next year.
The first residential project called The Light Linear to be launched in the first quarter will have a GDV of RM150mil while Light Point with a GDV of RM90mil will be launched few weeks after that.
The Light Linear will have 328 units with built-up from 1,379 to 1,513 sq ft, while the more spacious The Light Point units are from 1,807 to 4,000 sq ft.
The Light, a RM4.5bil residential and commercial development on Penang islands’ eastern coastline, will be developed over 12 years.
The residential precinct will have 1,186 residences, including waterfront villas and condominiums.
The commercial precinct will comprise office buildings, four hotels, retail malls, dining and entertainment facilities, a seafront park, floating restaurants and facilities for meetings, incentives, conventions and exhibitions.
In Johor Baru, IJM Land is planning to launch its latest development, Nusa Duta on 127 acres in the Iskandar Development Region by the first half of next year. The RM320mil project will comprise mainly landed properties that are priced from RM300,000.
To tap the foreign market, Soam said IJM Land was also resorting to marketing its high-end residences to participants of Malaysia My Second Home programme.
The maiden event was undertaken recently in Seoul to promote the Pearl Regency project to South Korean buyers.
“There is still good interest for quality Malaysian residential products among the Koreans and we plan to promote some of our other projects there in future,” he added.
Soam said property roadshows would also be held in the Middle Eat and Japan next year.
By The Star
November 5, 2008
Construction gets much-needed lift
The removal of import duty for cement and long iron and steel products, and abolishment of approved permit (AP) for long iron and steel products will give the construction industry a much-needed boost.
Master Builders Association Malaysia president Ng Kee Leen welcomed the Government’s latest move as a way to promote competitive material pricing and lower construction costs.
“The Government’s reiteration on the waiver of import duty and AP for steel helped clarify the import process, which was not fully understood by all parties earlier.
“The lifting of cement import duty, meanwhile, will lower the domestic cement price which is now 15% to 20% more expensive than imported cement.
“However, it may take months to feel the impact,” he told StarBiz yesterday.
Previously, a 10% import duty was imposed on cement from non-Asean countries.
Cement and Concrete Association of Malaysia executive director Grace Okuda was surprised by the announcement, as the association was not consulted on the waiver of cement import duty.
Lafarge Malayan Cement Bhd president and chief executive officer Bi Yong Chungunco said the company needed to verify the reported statement before giving any comments.
OSK Research analyst Ng Sem Guan said the latest move covered long steel products compared with only billets and certain grade of long bars announced by the Government on May 12.
“While the step may address the contractors’ complaint of the shortage of certain steel products and create a competitive pricing environment, the impact to local steel millers remains nominal, given that local millers benefit from their logistic advantage that allow prompt and small quantity delivery with competitive pricing.
“We also think that the Government may introduce local standard or testing requirement on imported steel products to safeguard public interest and safety hence non-tariff barrier to import,” he said.
By The Star
Master Builders Association Malaysia president Ng Kee Leen welcomed the Government’s latest move as a way to promote competitive material pricing and lower construction costs.
“The Government’s reiteration on the waiver of import duty and AP for steel helped clarify the import process, which was not fully understood by all parties earlier.
“The lifting of cement import duty, meanwhile, will lower the domestic cement price which is now 15% to 20% more expensive than imported cement.
“However, it may take months to feel the impact,” he told StarBiz yesterday.
Previously, a 10% import duty was imposed on cement from non-Asean countries.
Cement and Concrete Association of Malaysia executive director Grace Okuda was surprised by the announcement, as the association was not consulted on the waiver of cement import duty.
Lafarge Malayan Cement Bhd president and chief executive officer Bi Yong Chungunco said the company needed to verify the reported statement before giving any comments.
OSK Research analyst Ng Sem Guan said the latest move covered long steel products compared with only billets and certain grade of long bars announced by the Government on May 12.
“While the step may address the contractors’ complaint of the shortage of certain steel products and create a competitive pricing environment, the impact to local steel millers remains nominal, given that local millers benefit from their logistic advantage that allow prompt and small quantity delivery with competitive pricing.
“We also think that the Government may introduce local standard or testing requirement on imported steel products to safeguard public interest and safety hence non-tariff barrier to import,” he said.
By The Star
November 4, 2008
Local real estate cheap for foreigners
Laws are lenient for them to buy and sell property
DESPITE the current global financial meltdown, the Malaysian property market still remains attractive to foreign investors, according to International Real Estate Federation (FIABCI) Malaysia honorary treasurer Yeow Thit Sang.
“The local property market is still attractive in terms of prices. Properties in Malaysia are among the cheapest in the region,” he told StarBiz.
“Our laws are also comparatively more lenient for foreigners to buy and sell property in Malaysia,” he added.
Yeow said foreigners wanting to purchase property in countries such as Indonesia, the Philippines, Thailand and Vietnam were generally put off by the countries’ respective laws.
Another plus point for foreigners who bought property in Malaysia is that they are not subjected to death taxes, Yeow said.
“Japan has a death tax of 70%. Even in England death duties are stringent. That is why all the Lords are becoming paupers!”
Yeow said FIABCI-Malaysia would be sending a representative to Japan in December to create more awareness about the local property market and to encourage more foreign direct investment (FDI) into Malaysia.
He also said the local political development was not creating uncertainty and was not deterring foreign investors from Malaysia.
“The political scene in Malaysia is a normal democratic process. It is a sign of political maturity rather than uncertainty. It is not causing chaos like some countries,” Yeow said.
On another issue, when asked if the local property market was in a slump, Yeow said: “Our property market has not hit a slump. It is more of a slowdown.”
He attributed the slowdown to rising raw material prices that was sparked by the fuel price hike in June.
“Problems occur when construction cost goes up midway through a project and it is uncertain if it is the developer, contractor or consumer that will bear the cost,” Yeow said.
He said many contractors were increasingly reluctant to take on projects without a variation clause spelt out in the contract.
“Both contractors and developers should insist on a variation clause in their contracts to safeguard their interests.
“Should construction costs go up midway through the project, they can immediately determine who bears the cost and not have projects hanging,” Yeow said.
Going forward, he said he did not foresee see a slump in the local property market.
“There can never be a slump so long as there is demand. There is a lot of migration from rural to urban areas.
“The population is growing steadily and there will always be a need to house people,” he said.
“From an investment point of view, buying property is also a good safeguard against inflation,” Yeow added.
Yeow believes a high level of unemployment in the country could cause the local property sector to tumble.
“If unemployment were to rise, people will not be able to pay their loans and that will cause a slump. When that happens, banks will also take back the property,” he said, adding that the unemployment rate in Malaysia was low now.
“We still need to bring in foreign workers,” Yeow said.
On another note, Yeow said the standard of property development in Malaysia had improved tremendously over the years and it was being benchmarked against international standards.
“Our developments are definitely on par with those of other countries. Many of our projects have won international awards such as FIABCI International Prix d’Excellence,” he said.
The International Prix d’Excellence is an annual competition that honours the world’s best property projects.
On the local front, developers are recognised for their development projects and are honoured at the annual Malaysia Property Award.
Winners of the Malaysia Property Award in their relevant categories will go on to represent Malaysia the following year at the International Prix d’Excellence.
FIABCI Malaysia will be organising its 16th Malaysia Property Award on Nov 12 at the One World Hotel in Petaling Jaya, with Malayan Banking Bhd as the official sponsor.
The categories that will be contested are: Property Man of the Year, Master Plan, Residential Development (low rise and high rise), Retail Development, Industrial Development, Specialised Project (two categories), Office Development, Hotel Development and Resort Development.
The Yang di-Pertuan Agong and Raja Permaisuri Agong will be the guests of honour at the prestigious event.
By The Star
DESPITE the current global financial meltdown, the Malaysian property market still remains attractive to foreign investors, according to International Real Estate Federation (FIABCI) Malaysia honorary treasurer Yeow Thit Sang.
“The local property market is still attractive in terms of prices. Properties in Malaysia are among the cheapest in the region,” he told StarBiz.
“Our laws are also comparatively more lenient for foreigners to buy and sell property in Malaysia,” he added.
Yeow said foreigners wanting to purchase property in countries such as Indonesia, the Philippines, Thailand and Vietnam were generally put off by the countries’ respective laws.
Another plus point for foreigners who bought property in Malaysia is that they are not subjected to death taxes, Yeow said.
“Japan has a death tax of 70%. Even in England death duties are stringent. That is why all the Lords are becoming paupers!”
Yeow said FIABCI-Malaysia would be sending a representative to Japan in December to create more awareness about the local property market and to encourage more foreign direct investment (FDI) into Malaysia.
He also said the local political development was not creating uncertainty and was not deterring foreign investors from Malaysia.
“The political scene in Malaysia is a normal democratic process. It is a sign of political maturity rather than uncertainty. It is not causing chaos like some countries,” Yeow said.
On another issue, when asked if the local property market was in a slump, Yeow said: “Our property market has not hit a slump. It is more of a slowdown.”
He attributed the slowdown to rising raw material prices that was sparked by the fuel price hike in June.
“Problems occur when construction cost goes up midway through a project and it is uncertain if it is the developer, contractor or consumer that will bear the cost,” Yeow said.
He said many contractors were increasingly reluctant to take on projects without a variation clause spelt out in the contract.
“Both contractors and developers should insist on a variation clause in their contracts to safeguard their interests.
“Should construction costs go up midway through the project, they can immediately determine who bears the cost and not have projects hanging,” Yeow said.
Going forward, he said he did not foresee see a slump in the local property market.
“There can never be a slump so long as there is demand. There is a lot of migration from rural to urban areas.
“The population is growing steadily and there will always be a need to house people,” he said.
“From an investment point of view, buying property is also a good safeguard against inflation,” Yeow added.
Yeow believes a high level of unemployment in the country could cause the local property sector to tumble.
“If unemployment were to rise, people will not be able to pay their loans and that will cause a slump. When that happens, banks will also take back the property,” he said, adding that the unemployment rate in Malaysia was low now.
“We still need to bring in foreign workers,” Yeow said.
On another note, Yeow said the standard of property development in Malaysia had improved tremendously over the years and it was being benchmarked against international standards.
“Our developments are definitely on par with those of other countries. Many of our projects have won international awards such as FIABCI International Prix d’Excellence,” he said.
The International Prix d’Excellence is an annual competition that honours the world’s best property projects.
On the local front, developers are recognised for their development projects and are honoured at the annual Malaysia Property Award.
Winners of the Malaysia Property Award in their relevant categories will go on to represent Malaysia the following year at the International Prix d’Excellence.
FIABCI Malaysia will be organising its 16th Malaysia Property Award on Nov 12 at the One World Hotel in Petaling Jaya, with Malayan Banking Bhd as the official sponsor.
The categories that will be contested are: Property Man of the Year, Master Plan, Residential Development (low rise and high rise), Retail Development, Industrial Development, Specialised Project (two categories), Office Development, Hotel Development and Resort Development.
The Yang di-Pertuan Agong and Raja Permaisuri Agong will be the guests of honour at the prestigious event.
By The Star
November 2, 2008
Plenitude reviews projects on soft property sector
Plenitude Bhd is reviewing next year’s proposed launch of three housing projects in Kuala Lumpur and Penang, in view of the softening local property market.
Executive director Tan Seng Chye said the company was monitoring the economic conditions and market demand before proceeding with the projects.
“We hope to go as planned but we will be looking at the situation closely and study the demand first,” he said after the company AGM yesterday.
Plenitude non-independent non-executive director Zukarnine Shah Zainal Abidin (left) and Tan Seng Chye at the media briefing.
The Kuala Lumpur projects, comprising bungalows, have a gross development value (GDV) of RM147mil for Damansara Heights and RM78mil for Bukit Tunku. Bungalows in the two areas carry price tags from RM3mil.
The Penang project comprises three-storey semi-detached houses and condominiums with a GDV of RM184mil.
Tan said Plenitude expected to maintain pre-tax profit margin for the financial year ending June 30 (FY09) at a level similar to FY08’s 31%, as building material prices had come off their peaks earlier this year.
“We were not affected by the high prices earlier as our projects were near completion.
“Building material prices have eased in the last few months. We’ll be able to maintain margins, going forward, if the prices stabilise,” he said.
Although the property market had seen a slowdown since the first half of this year, Plenitude’s earnings for FY09 would be supported by its unbilled sales of RM216mil, he said.
Earlier this year, the company launched Tebrau City Residences in Johor which has a GDV of RM321mil.
The project, comprising serviced apartments, has secured a take-up rate of 60%.
Plenitude said it currently has 1,849 acres of undeveloped land, which it could use for projects in the next 10 to 15 years.
For FY08, Plenitude’s net profit rose 39% to RM78.6mil while revenue surged 46% to RM347.8mil.
By The Star
Executive director Tan Seng Chye said the company was monitoring the economic conditions and market demand before proceeding with the projects.
“We hope to go as planned but we will be looking at the situation closely and study the demand first,” he said after the company AGM yesterday.
Plenitude non-independent non-executive director Zukarnine Shah Zainal Abidin (left) and Tan Seng Chye at the media briefing.
The Kuala Lumpur projects, comprising bungalows, have a gross development value (GDV) of RM147mil for Damansara Heights and RM78mil for Bukit Tunku. Bungalows in the two areas carry price tags from RM3mil.
The Penang project comprises three-storey semi-detached houses and condominiums with a GDV of RM184mil.
Tan said Plenitude expected to maintain pre-tax profit margin for the financial year ending June 30 (FY09) at a level similar to FY08’s 31%, as building material prices had come off their peaks earlier this year.
“We were not affected by the high prices earlier as our projects were near completion.
“Building material prices have eased in the last few months. We’ll be able to maintain margins, going forward, if the prices stabilise,” he said.
Although the property market had seen a slowdown since the first half of this year, Plenitude’s earnings for FY09 would be supported by its unbilled sales of RM216mil, he said.
Earlier this year, the company launched Tebrau City Residences in Johor which has a GDV of RM321mil.
The project, comprising serviced apartments, has secured a take-up rate of 60%.
Plenitude said it currently has 1,849 acres of undeveloped land, which it could use for projects in the next 10 to 15 years.
For FY08, Plenitude’s net profit rose 39% to RM78.6mil while revenue surged 46% to RM347.8mil.
By The Star
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