AN OVERSUPPLY of high-end condominiums in Kuala Lumpur's most popular residential spots notwithstanding, developers are taking heart from strong uptake in recent launches and new benchmark prices.
While prices for landed residential property in the Klang Valley have remained robust, the interest in luxury condos, or rather those with a unique selling point, has been a surprise.
In June, Malaysia recorded what is believed to be its biggest condo transaction - that of a super penthouse in The Binjai On The Park for RM38 million (S$16 million). One of only two, the 14,300 sq ft triplex was sold at about the equivalent of RM2,660 psf to an unidentified corporate chieftain who owns properties worldwide, yet loved the unobstructed views of the Kuala Lumpur Convention Centre (KLCC) skyline afforded by the penthouse.
In nearby Mont Kiara, private developer Bukit Kiara Properties (BKP) has also been creating waves. Last month, it sold about four-fifths of the 200 plus units of its fourth and final block in the development called Verve Suites, at an average RM1,200 psf. Although the apartments come with fittings and furnishings, the cost per sq ft of the 'designer units' is close to prices in many developments in the Kuala Lumpur city centre.
Interestingly, secondary transactions have been much slower, a point that realtors attribute to BKP's easy financing scheme. A buyer need only pay 2.5 per cent in down-payment - or as little as RM20,000 - because of the developer's 5 per cent rebate and bank financing of up to 92.5 per cent. The developer also absorbs interest charges during the construction period as well as the legal fees for the sales and purchase and loan agreements.
Easy terms are a factor, but Verve Suites is very different from others in the market, BKP maintains. As with its previous blocks, the company 'sacrificed' the highest floor, which commands a premium, to build a common area for the use and enjoyment of residents. In its latest called the Vox Tower, the main pull is a sky beach, 37 storeys above ground 'with the magnificent view of the Kuala Lumpur skyline as the backdrop'.
Could buyers be planning to flip the property in three years when it is completed? BKP sales manager Jenny Phui tells BT with a shrug: 'I have a customer - just retired - who bought a unit in all four blocks. That's why he said he doesn't want to come here - because he will get tempted.'
The loyal customer would have purchased a unit in the first block at an average RM560 psf in 2006, rising to RM750 for the second block and to RM950 for the third.
Most of the purchasers, however, are yuppies aged 30-45 years keen on the lifestyle concept.
With liquidity swirling and yields on fixed deposits a mere 2.6-3.6 per cent, many prefer to invest in property despite supply outstripping demand in areas such as Mont Kiara, in which average occupancy has been pegged at about 75 per cent.
Increasing land scarcity notwithstanding, developers continue to maximise space by building more condominiums, perhaps buoyed by such sentiment.
Over the next few months, developer Mah Sing Properties will officially launch Icon Residence Mont Kiara, a 260-unit development whose modular design the company says is inspired by the Greek island of Santorini.
Despite indicative prices of RM1,100-RM1,200 psf, some 6,000 applicants - and counting - have registered their interest, drawn perhaps to the landscape and water features which hint of a 'Mediterranean feel'.
Source: Business Times, 5 Aug 2010
Showing posts with label Overseas Property - Malaysia. Show all posts
Showing posts with label Overseas Property - Malaysia. Show all posts
Thursday, August 5, 2010
CityDev's KL site may set new price benchmark
Land for high-end condo project could top RM3,000 psf
(KUALA LUMPUR) Singapore property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal, says a report in Malaysia's Business Times.
It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.
To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.
CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.
The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.
Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.
Sources told Malaysia's Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.
A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.
In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.
However, replying to a follow-up question from MBT last week, the spokesperson said: 'There are no details on the Millennium Residences available at this point.'
When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: 'We have no comment at this stage.'
Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).
Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.
YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.
Source: Business Times, 5 Aug 2010
(KUALA LUMPUR) Singapore property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal, says a report in Malaysia's Business Times.
It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.
To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.
CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.
The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.
Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.
Sources told Malaysia's Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.
A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.
In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.
However, replying to a follow-up question from MBT last week, the spokesperson said: 'There are no details on the Millennium Residences available at this point.'
When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: 'We have no comment at this stage.'
Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).
Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.
YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.
Source: Business Times, 5 Aug 2010
Thursday, July 29, 2010
Iskandar shows more promise
WHEN the two Prime Ministers of Singapore and Malaysia announced recently, and rather unexpectedly, a resolution to the long-standing issue of Malaysian railway land, there was a quiet sense of relief on both sides. But for none more so than among the backers of Iskandar Malaysia, an ambitious concept mooted in 2006 by the Malaysian government with the vision of transforming greenfield clusters in Johor into a sustainable and prosperous metropolis by 2025.
Singapore's initial response to the mega development plan was lukewarm. Singapore businesses viewed warily the rosy forecast of lucrative investment opportunities in waterfront projects and building and operating educational institutions and theme parks. The onslaught of the global financial crisis in 2008 did not help matters and Iskandar developments appeared to be moving slowly.
However, to the credit of the project's planners and managers, and the commitment of the Malaysian government, hundreds of millions of dollars have been sunk into developing the necessary infrastructure. Roads and highways were built, rivers cleaned up, and water and energy services to the area upgraded. In short, Malaysia's planners spared no effort and now the development is ripe for takeoff.
Private investments have been picking up. The catalytic driver of investments for the area, Iskandar Investments, signed on some major projects and achieved its own target for joint ventures. Indeed, Iskandar Malaysia is reported to have gone beyond its target of achieving US$13.2 billion in investments by 2010. However, there can be no denying that Singapore investors have been by and large in 'wait and see' mode.
Several business delegations have gone across from Singapore over the past two years to take a look at the region and see developments for themselves. But except for a few small investors, there was no notable commitment from a Singapore party - until recently, when the Management Development Institute of Singapore (MDIS) announced one of its biggest forays overseas, a $128 million investment to set up a 30-acre campus in an area within Iskandar's EduCity. The new facility will be about five times bigger than its Singapore campus.
Now that political reassurances have been made, and basic infrastructure is in place, will potential investors from Singapore take the plunge? Already Temasek Holdings is eyeing some 200 hectares of land in the development zone for a medical and wellness centre. This must be the clearest signal that the Malaysian project has got that it is ready to fly.
But while government assurances and commitments are necessary, nothing can replace the hard-nosed approach of business people, who base their decisions purely on investment returns. How much, and how quickly, private investment flows into Iskandar Malaysia will be the real test. But it must be said that the prospects now look better than at any time since the project's launch.
Source: Business Times, 29 Jul 2010
Singapore's initial response to the mega development plan was lukewarm. Singapore businesses viewed warily the rosy forecast of lucrative investment opportunities in waterfront projects and building and operating educational institutions and theme parks. The onslaught of the global financial crisis in 2008 did not help matters and Iskandar developments appeared to be moving slowly.
However, to the credit of the project's planners and managers, and the commitment of the Malaysian government, hundreds of millions of dollars have been sunk into developing the necessary infrastructure. Roads and highways were built, rivers cleaned up, and water and energy services to the area upgraded. In short, Malaysia's planners spared no effort and now the development is ripe for takeoff.
Private investments have been picking up. The catalytic driver of investments for the area, Iskandar Investments, signed on some major projects and achieved its own target for joint ventures. Indeed, Iskandar Malaysia is reported to have gone beyond its target of achieving US$13.2 billion in investments by 2010. However, there can be no denying that Singapore investors have been by and large in 'wait and see' mode.
Several business delegations have gone across from Singapore over the past two years to take a look at the region and see developments for themselves. But except for a few small investors, there was no notable commitment from a Singapore party - until recently, when the Management Development Institute of Singapore (MDIS) announced one of its biggest forays overseas, a $128 million investment to set up a 30-acre campus in an area within Iskandar's EduCity. The new facility will be about five times bigger than its Singapore campus.
Now that political reassurances have been made, and basic infrastructure is in place, will potential investors from Singapore take the plunge? Already Temasek Holdings is eyeing some 200 hectares of land in the development zone for a medical and wellness centre. This must be the clearest signal that the Malaysian project has got that it is ready to fly.
But while government assurances and commitments are necessary, nothing can replace the hard-nosed approach of business people, who base their decisions purely on investment returns. How much, and how quickly, private investment flows into Iskandar Malaysia will be the real test. But it must be said that the prospects now look better than at any time since the project's launch.
Source: Business Times, 29 Jul 2010
Tuesday, July 13, 2010
Johor’s Iskandar wooing Singapore investors
Malaysia’s southern economic region Iskandar expects strong investment flow from neighbouring Singapore, despite an expected economic slowdown in the second half of the year.
In an interview with Channel NewsAsia, the CEO of Iskandar Investment, Arlida Ariff, said she hopes to ride on improved bilateral ties to woo Singapore investments.
Spanning over 2,200 square kilometres, the Iskandar economic region located in southern Johor is three times the size of Singapore.
Since its inception at the end of 2006, Iskandar has attracted more than 60 billion ringgit worth of investment from both local and foreign investors, surpassing its own target of 47 billion.
Singapore is currently the third largest investor in Iskandar, with 3.03 billion ringgit worth of investments committed so far.
They are mainly in electrical and electronics, manufacturing and education.
But according to the CEO of the economic region, Iskandar offers plenty of synergistic opportunities especially in leisure tourism.
CEO Arlida Ariff said: “This is an area Singaporeans as visitors have taken advantage of. But for businessmen (and) investors, this is certainly an area we see potential and opportunities… those are the areas we would like to invite interest from Singapore.”
To boost tourism, Iskandar is opening up two more hotels, a marina, retail malls, an indoor family theme park including Asia’s first Legoland in 2012.
It also plans to add another 5.5 million square feet of commercial and residential space later this year.
CEO Arlida Ariff said: “Very frankly, most long-haul visitors look for location that justifies a stay of 4-5 nights.
“I think, singly, Johor and Singapore do not provide the long-stay conditions. We don’t have enough attractions to justify a long stay.
“(But) working together in collaboration, we can develop packages. It’s a win-win situation, we actually create a bigger market.”
Malaysia expects its tourist arrivals to exceed 18 million this year while Singapore is forecasting 12 million.
Combined, analysts say, both countries stand to reap more from an increased number of tourists who stay longer and spend more.
Source: Channel News Asia, 13 Jul 2010
In an interview with Channel NewsAsia, the CEO of Iskandar Investment, Arlida Ariff, said she hopes to ride on improved bilateral ties to woo Singapore investments.
Spanning over 2,200 square kilometres, the Iskandar economic region located in southern Johor is three times the size of Singapore.
Since its inception at the end of 2006, Iskandar has attracted more than 60 billion ringgit worth of investment from both local and foreign investors, surpassing its own target of 47 billion.
Singapore is currently the third largest investor in Iskandar, with 3.03 billion ringgit worth of investments committed so far.
They are mainly in electrical and electronics, manufacturing and education.
But according to the CEO of the economic region, Iskandar offers plenty of synergistic opportunities especially in leisure tourism.
CEO Arlida Ariff said: “This is an area Singaporeans as visitors have taken advantage of. But for businessmen (and) investors, this is certainly an area we see potential and opportunities… those are the areas we would like to invite interest from Singapore.”
To boost tourism, Iskandar is opening up two more hotels, a marina, retail malls, an indoor family theme park including Asia’s first Legoland in 2012.
It also plans to add another 5.5 million square feet of commercial and residential space later this year.
CEO Arlida Ariff said: “Very frankly, most long-haul visitors look for location that justifies a stay of 4-5 nights.
“I think, singly, Johor and Singapore do not provide the long-stay conditions. We don’t have enough attractions to justify a long stay.
“(But) working together in collaboration, we can develop packages. It’s a win-win situation, we actually create a bigger market.”
Malaysia expects its tourist arrivals to exceed 18 million this year while Singapore is forecasting 12 million.
Combined, analysts say, both countries stand to reap more from an increased number of tourists who stay longer and spend more.
Source: Channel News Asia, 13 Jul 2010
Monday, July 12, 2010
Dubai World property arm sells off Malaysia stake
(DUBAI, United Arab Emirates) A property arm of struggling state conglomerate Dubai World is backing out of a plan to build luxury homes in Malaysia as it looks to shore up its finances.
The cash-strapped company's Limitless division is selling off its stake in a partnership with Malaysia's Bandar Raya Developments to develop waterfront land in the southern city of Nusajaya.
Limitless will generate about US$23.8 million in the deal, according to a regulatory filing on Malaysia's stock exchange. It said in a statement yesterday that it continues 'to review our business activity to reflect market conditions'. The company's parent Dubai World needs cash as it works to pay back US$23.5 billion in debt. -- AP
Source: Business Times, 12 Jul 2010
The cash-strapped company's Limitless division is selling off its stake in a partnership with Malaysia's Bandar Raya Developments to develop waterfront land in the southern city of Nusajaya.
Limitless will generate about US$23.8 million in the deal, according to a regulatory filing on Malaysia's stock exchange. It said in a statement yesterday that it continues 'to review our business activity to reflect market conditions'. The company's parent Dubai World needs cash as it works to pay back US$23.5 billion in debt. -- AP
Source: Business Times, 12 Jul 2010
Wednesday, July 7, 2010
Wrangling hits M'sian kampung's redevelopment
Residents, politicians oppose govt plan to redevelop 110 years old settlement in KL
THE enormous potential of the enclave notwithstanding, the proposed redevelopment of a Malay settlement located in the shadows of the Petronas Twin Towers in Kuala Lumpur may take a while to materialise as the settlement has become another political football.
The redevelopment of the 90ha Kampung Baru enclave has been mooted on numerous occasions over the past two to three decades, with Prime Minister Najib Razak being the latest to do so in February.
The total land value could exceed RM20 billion (S$8.6 billion) if its potential were to be fully realised, he said of the 110-year-old settlement where land transacts at an estimated RM350 per square foot (psf).
The desire to unlock its value is understandable given that it is a mere 10-15 minutes' walk to the iconic twin towers, where the surrounding real estate sells for RM1,500 to RM2,000 psf.
That it remains unchanged is due to various reasons, the main one being the fragmented and complex ownership brought about by syariah inheritance laws, which has resulted in many small subdivided plots.
Putrajaya plans to establish a special body run by a government trustee, which together with state-linked corporations such as national asset management firm Permodalan Nasional and the pilgrims' fund, will build a mix of skyscrapers, shopping malls, condominiums and residential units in the enclave.
Getting the 1,000-plus owners to agree on a development model was already proving a challenge. (Even within families, members disagree on the action needed.) Attempts by the Selangor Pakatan Rakyat (PR) coalition state government to offer an alternative redevelopment plan could make it even more difficult.
Barisan Nasional (BN) politicians have accused the federal opposition coalition of trying to hijack Kampung Baru to score political points with the Malays. The BN's Federal Territories (FT) Minister, Raja Nong Chik Zainal Abidin, has asked Selangor Chief Minister Khalid Ibrahim not to interfere as the enclave lies within the FT.
Notwithstanding the political wrangling, talks between the residents and the FT minister appear to be yielding little. In one instance, Nong Chik proposed allowing non-Malays to lease the commercial buildings on a 40:60 ratio with the Malays. Even though Malays would continue to own the land outright, his proposal was shot down by the residents, despite arguing it would enhance values.
Non-Malays should be allowed to lease the commercial properties for practical reasons - they have greater purchasing power, Pulai member of Parliament Nur Jazlan Mohamed told BT. Recently appointed Urban Development Authority chairman Nur Jazlan said the area has the potential to be immediately successful 'provided we have the right mix'.
He suggested the government use the Land Acquisition Act to overcome the stalemate. Although there are political risks, he is of the view that the residents will come round to the idea provided they can see progress and benefit from it.
In any event, KL-ites are arguably already opposition-i nclined as in the last general election, 10 out of 11 parliamentary seats fell to PR candidates. 'You should not give up value for politics,' he remarked.
Based on a conservative plot ratio of five, CH Williams Talhar & Wong director Foo Gee Jen estimates the land could yield up to 50 million sq ft of gross lettable area of office space.
Even so, the property consultant is not holding his breath. 'It will take years and I doubt it will be a straightforward case because of the socio-politico constraints.'
Source: Business Times, 7 Jul 2010
THE enormous potential of the enclave notwithstanding, the proposed redevelopment of a Malay settlement located in the shadows of the Petronas Twin Towers in Kuala Lumpur may take a while to materialise as the settlement has become another political football.
The redevelopment of the 90ha Kampung Baru enclave has been mooted on numerous occasions over the past two to three decades, with Prime Minister Najib Razak being the latest to do so in February.
The total land value could exceed RM20 billion (S$8.6 billion) if its potential were to be fully realised, he said of the 110-year-old settlement where land transacts at an estimated RM350 per square foot (psf).
The desire to unlock its value is understandable given that it is a mere 10-15 minutes' walk to the iconic twin towers, where the surrounding real estate sells for RM1,500 to RM2,000 psf.
That it remains unchanged is due to various reasons, the main one being the fragmented and complex ownership brought about by syariah inheritance laws, which has resulted in many small subdivided plots.
Putrajaya plans to establish a special body run by a government trustee, which together with state-linked corporations such as national asset management firm Permodalan Nasional and the pilgrims' fund, will build a mix of skyscrapers, shopping malls, condominiums and residential units in the enclave.
Getting the 1,000-plus owners to agree on a development model was already proving a challenge. (Even within families, members disagree on the action needed.) Attempts by the Selangor Pakatan Rakyat (PR) coalition state government to offer an alternative redevelopment plan could make it even more difficult.
Barisan Nasional (BN) politicians have accused the federal opposition coalition of trying to hijack Kampung Baru to score political points with the Malays. The BN's Federal Territories (FT) Minister, Raja Nong Chik Zainal Abidin, has asked Selangor Chief Minister Khalid Ibrahim not to interfere as the enclave lies within the FT.
Notwithstanding the political wrangling, talks between the residents and the FT minister appear to be yielding little. In one instance, Nong Chik proposed allowing non-Malays to lease the commercial buildings on a 40:60 ratio with the Malays. Even though Malays would continue to own the land outright, his proposal was shot down by the residents, despite arguing it would enhance values.
Non-Malays should be allowed to lease the commercial properties for practical reasons - they have greater purchasing power, Pulai member of Parliament Nur Jazlan Mohamed told BT. Recently appointed Urban Development Authority chairman Nur Jazlan said the area has the potential to be immediately successful 'provided we have the right mix'.
He suggested the government use the Land Acquisition Act to overcome the stalemate. Although there are political risks, he is of the view that the residents will come round to the idea provided they can see progress and benefit from it.
In any event, KL-ites are arguably already opposition-i nclined as in the last general election, 10 out of 11 parliamentary seats fell to PR candidates. 'You should not give up value for politics,' he remarked.
Based on a conservative plot ratio of five, CH Williams Talhar & Wong director Foo Gee Jen estimates the land could yield up to 50 million sq ft of gross lettable area of office space.
Even so, the property consultant is not holding his breath. 'It will take years and I doubt it will be a straightforward case because of the socio-politico constraints.'
Source: Business Times, 7 Jul 2010
Tuesday, July 6, 2010
Sunway sees its prices rising 20% from 2008
It believes focus on premium properties will place it ahead of competition
(KUALA LUMPUR) Sunway City Bhd (Suncity), developer of the Sunway Integrated Resort City in Bandar Sunway, expects prices at its property launches to increase by 20 per cent this year from 2008.
Its managing director of property development in Malaysia, Ho Hon Sang, said this was in line with the current market trend.
'Suncity's launches for this year will mainly be in the Klang Valley with a gross development value of RM1.5 billion (S$651 million),' he told Bernama in an interview.
Suncity, Mr Ho said, believes that its premium pricing strategy of focusing on properties with 'green initiatives' that promote quality of life will place it well ahead of competitors.
'Our property prices are usually 10 to 20 per cent above the competitors,' he said.
According to Mr Ho, the Malaysian property market is not expected to enter a bubble stage despite rising prices due to the limited supply of land in prime areas, and availability of liquidity at the banks and institutions such as the Employees Provident Fund (EPF).
'Malaysian property prices are still lower compared to Singapore,' he said.
Suncity began its green journey back during its Sunway Integrated Resort City in Bandar Sunway, an iconic project which encompasses a township of medical, university, shopping and retail mall as well as resort and hotels.
'We have also emphasised on security with the implementation of CCTV within strategic roads and location and auxiliary police to ensure proper surveillance,' Mr Ho said. 'Sustainable construction is certainly here to stay as Malaysians are becoming more environmentally conscious. Moreover, it is widely practised by other developers overseas,' he said.
He also said that Lafarge Malayan Cement Bhd's cement products such as the Phoenix complemented the group's objective to promote sustainable construction.
The group's efforts in going green were given recognition when the Sunway Palazzio development in Sri Hartamas, Kuala Lumpur, was awarded the Gold Award in High Rise Residential Development by Singapore's Building and Construction Authority Green Mark Scheme.
Sunway Palazzio is the first high-rise residential development in Malaysia to receive the coveted award based on five criteria - energy efficiency, water efficiency, site/project development and management, good indoor environmental quality and environmental protection, and innovation. -- Bernama
Source: Business Times, 6 Jul 2010
(KUALA LUMPUR) Sunway City Bhd (Suncity), developer of the Sunway Integrated Resort City in Bandar Sunway, expects prices at its property launches to increase by 20 per cent this year from 2008.
Its managing director of property development in Malaysia, Ho Hon Sang, said this was in line with the current market trend.
'Suncity's launches for this year will mainly be in the Klang Valley with a gross development value of RM1.5 billion (S$651 million),' he told Bernama in an interview.
Suncity, Mr Ho said, believes that its premium pricing strategy of focusing on properties with 'green initiatives' that promote quality of life will place it well ahead of competitors.
'Our property prices are usually 10 to 20 per cent above the competitors,' he said.
According to Mr Ho, the Malaysian property market is not expected to enter a bubble stage despite rising prices due to the limited supply of land in prime areas, and availability of liquidity at the banks and institutions such as the Employees Provident Fund (EPF).
'Malaysian property prices are still lower compared to Singapore,' he said.
Suncity began its green journey back during its Sunway Integrated Resort City in Bandar Sunway, an iconic project which encompasses a township of medical, university, shopping and retail mall as well as resort and hotels.
'We have also emphasised on security with the implementation of CCTV within strategic roads and location and auxiliary police to ensure proper surveillance,' Mr Ho said. 'Sustainable construction is certainly here to stay as Malaysians are becoming more environmentally conscious. Moreover, it is widely practised by other developers overseas,' he said.
He also said that Lafarge Malayan Cement Bhd's cement products such as the Phoenix complemented the group's objective to promote sustainable construction.
The group's efforts in going green were given recognition when the Sunway Palazzio development in Sri Hartamas, Kuala Lumpur, was awarded the Gold Award in High Rise Residential Development by Singapore's Building and Construction Authority Green Mark Scheme.
Sunway Palazzio is the first high-rise residential development in Malaysia to receive the coveted award based on five criteria - energy efficiency, water efficiency, site/project development and management, good indoor environmental quality and environmental protection, and innovation. -- Bernama
Source: Business Times, 6 Jul 2010
CMA buys Metro's Gurney Plaza Extension for RM215m
CMA to grant CMMT right of first refusal to acquire Gurney Plaza Extension
METRO Holdings has announced that it exercised its put option to require CapitaRetail Gurney to acquire its interest in the 134,549-sq-ft retail property Gurney Plaza Extension in Penang for RM215 million ($92.9 million).
In 2007, CapitaLand acquired the 700,000-sq-ft Gurney Plaza for $336.8 million. At the time, it said it would form the seed assets for its proposed Malaysian retail real estate investment trust (Reit).
Metro Holdings said the consideration for the disposal of Gurney Plaza Extension was arrived at by negotiations on a willing seller, willing buyer basis and is to be wholly satisfied in cash.
Metro Holdings said that net proceeds of the divestment will be added to the working capital of the group and used to build on the group's presence and investment in the region.
Gurney Plaza Extension is a nine-storey retail block located along Gurney Drive in Penang. It is part of the Gurney Park development.
Separately, CapitaMalls Asia (CMA) said yesterday that it will be granting CapitaMalls Malaysia Trust (CMMT) a right of first refusal to acquire Gurney Plaza Extension after the finalisation of all the terms and conditions of the acquisition.
CMA announced in June that it would make an RM848 million initial public offering (IPO) for Malaysia's largest 'pure-play' shopping mall Reit.
CMA said that CMMT is still in the midst of its IPO and is likely to make a decision on whether to acquire Gurney Plaza Extension only after its listing on Bursa Malaysia Securities Berhad, the securities exchange of Malaysia.
The units for CMMT are tentatively priced at RM1.08 each, although the final price could change as it will be determined only after a book-building exercise undertaken by the listing's joint global coordinators, CIMB and JPMorgan.
CMMT's prospectus expects the trust to be the largest Reit on the Kuala Lumpur stock exchange with a market capitalisation of RM1.46 billion on an asset base of RM2.13 billion. It will also be the most liquid with a free float of up to 67 per cent.
Metro Holdings said that the divestment is not expected to have any significant impact on the consolidated net tangible asset per share and the consolidated earnings per share of the Metro Group for the year ending March 31, 2011.
Source: Business Times, 6 Jul 2010
METRO Holdings has announced that it exercised its put option to require CapitaRetail Gurney to acquire its interest in the 134,549-sq-ft retail property Gurney Plaza Extension in Penang for RM215 million ($92.9 million).
In 2007, CapitaLand acquired the 700,000-sq-ft Gurney Plaza for $336.8 million. At the time, it said it would form the seed assets for its proposed Malaysian retail real estate investment trust (Reit).
Metro Holdings said the consideration for the disposal of Gurney Plaza Extension was arrived at by negotiations on a willing seller, willing buyer basis and is to be wholly satisfied in cash.
Metro Holdings said that net proceeds of the divestment will be added to the working capital of the group and used to build on the group's presence and investment in the region.
Gurney Plaza Extension is a nine-storey retail block located along Gurney Drive in Penang. It is part of the Gurney Park development.
Separately, CapitaMalls Asia (CMA) said yesterday that it will be granting CapitaMalls Malaysia Trust (CMMT) a right of first refusal to acquire Gurney Plaza Extension after the finalisation of all the terms and conditions of the acquisition.
CMA announced in June that it would make an RM848 million initial public offering (IPO) for Malaysia's largest 'pure-play' shopping mall Reit.
CMA said that CMMT is still in the midst of its IPO and is likely to make a decision on whether to acquire Gurney Plaza Extension only after its listing on Bursa Malaysia Securities Berhad, the securities exchange of Malaysia.
The units for CMMT are tentatively priced at RM1.08 each, although the final price could change as it will be determined only after a book-building exercise undertaken by the listing's joint global coordinators, CIMB and JPMorgan.
CMMT's prospectus expects the trust to be the largest Reit on the Kuala Lumpur stock exchange with a market capitalisation of RM1.46 billion on an asset base of RM2.13 billion. It will also be the most liquid with a free float of up to 67 per cent.
Metro Holdings said that the divestment is not expected to have any significant impact on the consolidated net tangible asset per share and the consolidated earnings per share of the Metro Group for the year ending March 31, 2011.
Source: Business Times, 6 Jul 2010
Tuesday, June 29, 2010
CapitaMalls Malaysia Trust launches IPO
CapitaMalls Asia could raise RM864m from spin-off's retail offering
CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.
The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.
It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here.
About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08.
The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).
The retail offering opened at 10am yesterday and will close at 5pm next Monday.
The institutional offering opened last Friday and will close next Wednesday.
CapitaMalls Malaysia Trust is expected to list on July 16.
CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.
CMRM is the manager of CapitaMalls Malaysia Trust.
CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'
CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.
The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total.
They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.
Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.
AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.
The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.
At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT.
CMMT's market capitalisation is expected to be about RM1.4 billion, it added.
The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.
CapitaMalls Asia lost two cents to $2.14 yesterday.
Source: Straits Times, 29 Jun 2010
CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.
The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.
It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here.
About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08.
The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).
The retail offering opened at 10am yesterday and will close at 5pm next Monday.
The institutional offering opened last Friday and will close next Wednesday.
CapitaMalls Malaysia Trust is expected to list on July 16.
CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.
CMRM is the manager of CapitaMalls Malaysia Trust.
CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'
CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.
The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total.
They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.
Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.
AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.
The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.
At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT.
CMMT's market capitalisation is expected to be about RM1.4 billion, it added.
The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.
CapitaMalls Asia lost two cents to $2.14 yesterday.
Source: Straits Times, 29 Jun 2010
Friday, June 25, 2010
Frasers Hospitality plans another property in KL
BETTER late than never, one could say of Frasers Hospitality and Malaysia.
Having finally established a maiden property in the country, Fraser Place Kuala Lumpur is already proving a right fit. Occupancy rates at the 215 apartments have averaged 70 per cent in the six months since its soft opening in December, and are expected to exceed 80 per cent next month.
'It's been very, very encouraging,' Frasers Hospitality chief executive Choe Peng Sum told BT in an interview.
The latecomer to Malaysia intends to play catch-up, and is already planning a second property - Fraser Residence Kuala Lumpur - which will also be located in the city's golden triangle.
Both properties - the first sited in Jalan Perak and the second in Jalan Sultan Ismail - are a stone's throw from the iconic Petronas Twin Towers, and a joint collaboration with Malaysian stock exchange-listed developer YNH Property.
Ultimately, Mr Choe sees Fraser establishing three properties under Fraser and another under Modena.
If the hospitality player rues missing out on MARC Residences - jointly developed by a local company and CapitaLand in 2003 - it has decided to move on. 'We had been looking for a property around the KLCC area and looked at the MARC but thought the price was rather high. We never knew it would climb up so high.
'But this is exactly where we want to be.'
Johor is another possibility, but 'probably still early days'.
The expansion is aggressive elsewhere. Frasers Hospitality will open 10 to 12 properties this year, and another 14 next year. Besides Kuala Lumpur, debuts are earmarked for Budapest, Doha, Dubai, New Delhi, Osaka, Bahrain, Chengdu, Suzhou and Tianjin.
'While people may be more hesitant, this is the window we have to expand. Our type of business is adding more and more properties. It's a numbers game, and every property is a testament to the next.'
Given the average 90 per cent occupancy rates enjoyed by its European properties - an area arguably suffering the greatest economic uncertainties - its contrarian approach isn't entirely misplaced.
The pound and euro have also depreciated significantly in the past 12 months, although property prices have recovered. The company owns a third of the 35 properties it manages and any acquisition it makes is benchmarked against the weighted average cost of capital and internal rate of return (IRR). In Kuala Lumpur, it is aiming for double-digit IRR.
But its year-on-year compounded annual revenue growth of about 16 per cent is an indication of healthy customer support. Corporate customers make up about 85 per cent of all guests, half of them mid to long-term guests.
With 5,000 individual residences in 21 cities worldwide - and another 6,000 residences to be added by end-2012 - Mr Choe attributes Frasers' ability to retain the increasingly discerning business traveller to brand consistency and high levels of service.
The grand opening of Fraser Place Kuala Lumpur was attended by Fraser & Neave chairman Lee Hsien Yang and officiated by Malaysia's Tourism Minister Ng Yen Yen.
Source: Business Times, 25 Jun 2010
Having finally established a maiden property in the country, Fraser Place Kuala Lumpur is already proving a right fit. Occupancy rates at the 215 apartments have averaged 70 per cent in the six months since its soft opening in December, and are expected to exceed 80 per cent next month.
'It's been very, very encouraging,' Frasers Hospitality chief executive Choe Peng Sum told BT in an interview.
The latecomer to Malaysia intends to play catch-up, and is already planning a second property - Fraser Residence Kuala Lumpur - which will also be located in the city's golden triangle.
Both properties - the first sited in Jalan Perak and the second in Jalan Sultan Ismail - are a stone's throw from the iconic Petronas Twin Towers, and a joint collaboration with Malaysian stock exchange-listed developer YNH Property.
Ultimately, Mr Choe sees Fraser establishing three properties under Fraser and another under Modena.
If the hospitality player rues missing out on MARC Residences - jointly developed by a local company and CapitaLand in 2003 - it has decided to move on. 'We had been looking for a property around the KLCC area and looked at the MARC but thought the price was rather high. We never knew it would climb up so high.
'But this is exactly where we want to be.'
Johor is another possibility, but 'probably still early days'.
The expansion is aggressive elsewhere. Frasers Hospitality will open 10 to 12 properties this year, and another 14 next year. Besides Kuala Lumpur, debuts are earmarked for Budapest, Doha, Dubai, New Delhi, Osaka, Bahrain, Chengdu, Suzhou and Tianjin.
'While people may be more hesitant, this is the window we have to expand. Our type of business is adding more and more properties. It's a numbers game, and every property is a testament to the next.'
Given the average 90 per cent occupancy rates enjoyed by its European properties - an area arguably suffering the greatest economic uncertainties - its contrarian approach isn't entirely misplaced.
The pound and euro have also depreciated significantly in the past 12 months, although property prices have recovered. The company owns a third of the 35 properties it manages and any acquisition it makes is benchmarked against the weighted average cost of capital and internal rate of return (IRR). In Kuala Lumpur, it is aiming for double-digit IRR.
But its year-on-year compounded annual revenue growth of about 16 per cent is an indication of healthy customer support. Corporate customers make up about 85 per cent of all guests, half of them mid to long-term guests.
With 5,000 individual residences in 21 cities worldwide - and another 6,000 residences to be added by end-2012 - Mr Choe attributes Frasers' ability to retain the increasingly discerning business traveller to brand consistency and high levels of service.
The grand opening of Fraser Place Kuala Lumpur was attended by Fraser & Neave chairman Lee Hsien Yang and officiated by Malaysia's Tourism Minister Ng Yen Yen.
Source: Business Times, 25 Jun 2010
Tuesday, June 15, 2010
Sunway to be M'sia's biggest Reit IPO
(SINGAPORE) Sunway Real Estate Investment Trust (Reit) plans to sell shares for 90-98 sen (S$0.38-0.42) each in an initial public offering in Malaysia, according to a sale document obtained by Bloomberg News.
The company, controlled by property and hotel group Sunway City Bhd, began offering the shares yesterday as it seeks to raise as much as US$515 million in what would be Malaysia's biggest Reit IPO, according to the document. The sale is being managed by a group of banks led by Credit Suisse Group AG and RHB Capital Bhd.
The Malaysian property trust, which includes hotels and malls valued at RM3.7 billion, is set to be the biggest in the South-east Asian nation as it taps a resurgence in investor appetite for real-estate stocks amid an economic rebound from last year's recession. The funds will be used for acquisition of properties, according to the term sheet. Sunway Reit will determine the final price of the shares on June 25, and the company will begin trading in Malaysia on July 8, according to the document. -- Bloomberg
Source: Business Times, 15 Jun 2010
The company, controlled by property and hotel group Sunway City Bhd, began offering the shares yesterday as it seeks to raise as much as US$515 million in what would be Malaysia's biggest Reit IPO, according to the document. The sale is being managed by a group of banks led by Credit Suisse Group AG and RHB Capital Bhd.
The Malaysian property trust, which includes hotels and malls valued at RM3.7 billion, is set to be the biggest in the South-east Asian nation as it taps a resurgence in investor appetite for real-estate stocks amid an economic rebound from last year's recession. The funds will be used for acquisition of properties, according to the term sheet. Sunway Reit will determine the final price of the shares on June 25, and the company will begin trading in Malaysia on July 8, according to the document. -- Bloomberg
Source: Business Times, 15 Jun 2010
Sunday, June 13, 2010
Sand and the city at new KL condo
Kuala Lumpur: Living in an apartment in the middle of the city, but looking for a suntan by the sea? Just head to the rooftop.
Developer Bukit Kiara Properties (BKP) has come up with a unique feature for its latest condominium, the Vox Tower, in Kuala Lumpur's posh suburb of Mont Kiara: A beach with real sand and palm trees, perched high up on the 37th floor.
It appears to be a first for the country, as developers keep trying to outdo one another with increasingly creative attractions to draw buyers.
Not too long ago, developer One KLCC completed One KL, a posh 35-storey condominium opposite the Petronas Twin Towers, which boasts a private pool in every unit.
One KL's apartments come at a price, though: RM4.5 million (S$1.9 million) and more for the larger units covering 300 sq m to 350 sq m.
By comparison, a five-room HDB flat in Singapore is typically 110 sq m in size and costs up to $500,000.
BKP's rooftop beach, which it calls the Versilica Sky Beach, is touted to be Malaysia's first. It has recreational rooms, a bar, jet pool, lap pool, garden and terrace.
BKP's group managing director N.K. Tong told The Sunday Times that the idea had come from a brainstorming session.
'Most of the ideas that came from my staff had sun, sand and surf,' he said. 'Building a sky beach sounded really silly at first, but as we did more brainstorming, we found the idea quite possible after all.'
BKP did not want to reveal the cost of the Vox Tower, but the sky beach and rooftop facilities alone are estimated to cost between RM2million and RM3 million.
The sandy beach covers about 370 sq m, and sits next to a 20m by 3m lap pool.
The condo is selling well, but Mr Tong and his team have yet to figure out how and where to source for the sand, and which type of sand to use. To add a greater touch of reality to the idea of a sky-high beach, the team also plans to use salty chlorinated water in the pool.
The Vox Tower is one of four blocks in BKP's Verve Suites project, and is expected to be ready by end-2013.
Prices range from about RM580,000 for a 43 sq m one-bedroom unit to RM1.8 million for a 130 sq m three-bedroom unit.
Mr Tong says BKP is targeting mainly local buyers who are 'young at heart' - and presumably, those who want a seaside visit without stepping out of their condo.
Source: Sunday Times, 13 Jun 2010
Developer Bukit Kiara Properties (BKP) has come up with a unique feature for its latest condominium, the Vox Tower, in Kuala Lumpur's posh suburb of Mont Kiara: A beach with real sand and palm trees, perched high up on the 37th floor.
It appears to be a first for the country, as developers keep trying to outdo one another with increasingly creative attractions to draw buyers.
Not too long ago, developer One KLCC completed One KL, a posh 35-storey condominium opposite the Petronas Twin Towers, which boasts a private pool in every unit.
One KL's apartments come at a price, though: RM4.5 million (S$1.9 million) and more for the larger units covering 300 sq m to 350 sq m.
By comparison, a five-room HDB flat in Singapore is typically 110 sq m in size and costs up to $500,000.
BKP's rooftop beach, which it calls the Versilica Sky Beach, is touted to be Malaysia's first. It has recreational rooms, a bar, jet pool, lap pool, garden and terrace.
BKP's group managing director N.K. Tong told The Sunday Times that the idea had come from a brainstorming session.
'Most of the ideas that came from my staff had sun, sand and surf,' he said. 'Building a sky beach sounded really silly at first, but as we did more brainstorming, we found the idea quite possible after all.'
BKP did not want to reveal the cost of the Vox Tower, but the sky beach and rooftop facilities alone are estimated to cost between RM2million and RM3 million.
The sandy beach covers about 370 sq m, and sits next to a 20m by 3m lap pool.
The condo is selling well, but Mr Tong and his team have yet to figure out how and where to source for the sand, and which type of sand to use. To add a greater touch of reality to the idea of a sky-high beach, the team also plans to use salty chlorinated water in the pool.
The Vox Tower is one of four blocks in BKP's Verve Suites project, and is expected to be ready by end-2013.
Prices range from about RM580,000 for a 43 sq m one-bedroom unit to RM1.8 million for a 130 sq m three-bedroom unit.
Mr Tong says BKP is targeting mainly local buyers who are 'young at heart' - and presumably, those who want a seaside visit without stepping out of their condo.
Source: Sunday Times, 13 Jun 2010
Saturday, June 12, 2010
CapitaMalls to list Malaysian centres
They will be listed in a property trust on Bursa Malaysia
CAPITAMALLS Asia plans to list its three Malaysian malls, worth nearly $1 billion, in a property trust on Malaysia's main bourse - raising as much as RM995 million (S$426 million) in the process.
In a statement yesterday, it said that it has received approval from the Securities Commission of Malaysia to list CapitaMalls Malaysia Trust (CMMT).
The newly spun-off company will be listed on the main market of Bursa Malaysia.
CMMT will be Malaysia's largest listed 'pure-play' shopping mall real estate investment trust (Reit) by market and property value if the listing goes ahead.
CapitaMalls Asia will offer 786.52 million units, and retain a stake of 41.74 per cent in CMMT.
If an over-allotment option of up to 15 per cent of the proposed offering - or 117.98 million units - is exercised, it will retain a stake of 33 per cent.
CapitaMalls Asia will hold 70 per cent of the Reit manager post-listing.
CapitaMalls Asia said the Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors to buy 90 million units at RM1.10 a unit or the institutional price, whichever is lower. At this price, the estimated distribution yield is 6.5 per cent for the eight-month period ending December this year and 6.8 per cent for next year.
The company said its decision to proceed with the listing depends on a number of factors. It has yet to price the offering.
Still, the listing could raise as much as RM995 million based on the cornerstone investors' price.
The trust will hold the firm's Malaysian malls: Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. This initial portfolio has a total net lettable area of about 1.88 million sq ft and is valued at about RM2.13 billion.
Some Malaysians have written off The Mines as a viable mall. But CapitaMalls Asia said it has introduced many changes and created an extra net lettable area of some 80,000 sq ft in the mall, with higher average rents and occupancy as a result.
Malaysia is a 'key growth market' apart from Singapore and China, said CapitaMalls Asia chief executive Lim Beng Chee.
He said there will be good opportunities for growth as the retail market there is fragmented.
Most of its rivals are owners of single malls.
CapitaMalls will be able to 'recycle' cash of some $200 million from the listing to acquire assets, Mr Lim said.
CMMT will be given a right of first refusal over retail properties in Malaysia that CapitaMalls Asia targets for acquisition.
This includes the Gurney Plaza Extension which would bump up its asset size by 11 per cent to 12 per cent.
CapitaMalls Asia plans to have a Malaysian retail property fund to acquire and/or develop retail property, primarily malls in Malaysia.
Yesterday, CapitaMalls Asia closed unchanged at $2.10.
Source: Straits Times, 12 Jun 2010
CAPITAMALLS Asia plans to list its three Malaysian malls, worth nearly $1 billion, in a property trust on Malaysia's main bourse - raising as much as RM995 million (S$426 million) in the process.
In a statement yesterday, it said that it has received approval from the Securities Commission of Malaysia to list CapitaMalls Malaysia Trust (CMMT).
The newly spun-off company will be listed on the main market of Bursa Malaysia.
CMMT will be Malaysia's largest listed 'pure-play' shopping mall real estate investment trust (Reit) by market and property value if the listing goes ahead.
CapitaMalls Asia will offer 786.52 million units, and retain a stake of 41.74 per cent in CMMT.
If an over-allotment option of up to 15 per cent of the proposed offering - or 117.98 million units - is exercised, it will retain a stake of 33 per cent.
CapitaMalls Asia will hold 70 per cent of the Reit manager post-listing.
CapitaMalls Asia said the Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors to buy 90 million units at RM1.10 a unit or the institutional price, whichever is lower. At this price, the estimated distribution yield is 6.5 per cent for the eight-month period ending December this year and 6.8 per cent for next year.
The company said its decision to proceed with the listing depends on a number of factors. It has yet to price the offering.
Still, the listing could raise as much as RM995 million based on the cornerstone investors' price.
The trust will hold the firm's Malaysian malls: Gurney Plaza in Penang, Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor. This initial portfolio has a total net lettable area of about 1.88 million sq ft and is valued at about RM2.13 billion.
Some Malaysians have written off The Mines as a viable mall. But CapitaMalls Asia said it has introduced many changes and created an extra net lettable area of some 80,000 sq ft in the mall, with higher average rents and occupancy as a result.
Malaysia is a 'key growth market' apart from Singapore and China, said CapitaMalls Asia chief executive Lim Beng Chee.
He said there will be good opportunities for growth as the retail market there is fragmented.
Most of its rivals are owners of single malls.
CapitaMalls will be able to 'recycle' cash of some $200 million from the listing to acquire assets, Mr Lim said.
CMMT will be given a right of first refusal over retail properties in Malaysia that CapitaMalls Asia targets for acquisition.
This includes the Gurney Plaza Extension which would bump up its asset size by 11 per cent to 12 per cent.
CapitaMalls Asia plans to have a Malaysian retail property fund to acquire and/or develop retail property, primarily malls in Malaysia.
Yesterday, CapitaMalls Asia closed unchanged at $2.10.
Source: Straits Times, 12 Jun 2010
Thursday, May 27, 2010
Property firms with Johor land get leg up
Optimism rises in wake of progress in S'pore-M'sia issues
PROPERTY companies owning large tracts of land in Johor can expect greater investor interest as Singapore and Malaysia resolve previously sticky issues.
The biggest gainers may be the special economic zone of Iskandar Malaysia and Johor's real estate sector.
Given the proposals for a new rapid transit line between Tanjung Puteri in Johor Bahru and Singapore, as well as increasing bus and taxi services and reducing the Second Link toll rates, many analysts felt that Johor property developers 'could be back in play'.
Over the past two days, the bearish stockmarket sentiments notwithstanding, developers such as UEM Land and Tebrau Teguh which have large landbanks in Johor have seen a bigger spike in interest.
Government-linked UEM Land which owns an estimated 3,300 hectares in the southern state - much of it in key nodes in Iskandar - has been one of the most active counters, yesterday closing three sen up at RM1.33 after reaching an intra-day high of RM1.37.
The progress made on a number of outstanding two-decade-old issues including land owned by KTM in Singapore which will now be jointly developed by both countries' state investment agencies, as well as Singapore's commitment to a proposed wellness township in Iskandar, has raised optimism that development would now be speeded up rather than put on the back-burner.
'Oh yes, Johor and Iskandar have become more attractive, especially if Temasek comes in and brings others,' said CH Williams Talhar & Wong director Danny Yeo.
CLSA, which had previously written on improving Singapore-Malaysia relations, was also optimistic that 'the pieces were falling in place very quickly'. It expects more Singaporeans to be living in Iskandar.
In a client note, Macquarie pointed out that with Singapore helping to drive part of Iskandar's growth, Malaysia's potential economic growth and move up the value-added chain would be greatly boosted.
The proposed rapid transit link between the two countries is expected to smoothen cross border movements when it is completed in 2018.
Property players around the Johor city area are already rubbing their hands in glee. 'The South Key project just got better with the rail connection,' declared CH William's Mr Yeo. The promoters of the RM12 billion (S$5.1 billion) mixed development project on the former Majidi army campsite plan to launch the first phase involving three-storey shop lots in the coming months.
Sentiments have improved on the latest developments, Mr Yeo said, adding that with inflation likely to see a higher jump should the Goods & Services Tax be implemented next year, properties are a better hedge against inflation. 'All that coupled with the recent rate hike will only push buyers to commit earlier rather than later in order to lock in rates.'
Even so, the momentum is only expected to pick up once more Singapore money starts to trickle in.
Source: Business Times, 27 May 2010
PROPERTY companies owning large tracts of land in Johor can expect greater investor interest as Singapore and Malaysia resolve previously sticky issues.
The biggest gainers may be the special economic zone of Iskandar Malaysia and Johor's real estate sector.
Given the proposals for a new rapid transit line between Tanjung Puteri in Johor Bahru and Singapore, as well as increasing bus and taxi services and reducing the Second Link toll rates, many analysts felt that Johor property developers 'could be back in play'.
Over the past two days, the bearish stockmarket sentiments notwithstanding, developers such as UEM Land and Tebrau Teguh which have large landbanks in Johor have seen a bigger spike in interest.
Government-linked UEM Land which owns an estimated 3,300 hectares in the southern state - much of it in key nodes in Iskandar - has been one of the most active counters, yesterday closing three sen up at RM1.33 after reaching an intra-day high of RM1.37.
The progress made on a number of outstanding two-decade-old issues including land owned by KTM in Singapore which will now be jointly developed by both countries' state investment agencies, as well as Singapore's commitment to a proposed wellness township in Iskandar, has raised optimism that development would now be speeded up rather than put on the back-burner.
'Oh yes, Johor and Iskandar have become more attractive, especially if Temasek comes in and brings others,' said CH Williams Talhar & Wong director Danny Yeo.
CLSA, which had previously written on improving Singapore-Malaysia relations, was also optimistic that 'the pieces were falling in place very quickly'. It expects more Singaporeans to be living in Iskandar.
In a client note, Macquarie pointed out that with Singapore helping to drive part of Iskandar's growth, Malaysia's potential economic growth and move up the value-added chain would be greatly boosted.
The proposed rapid transit link between the two countries is expected to smoothen cross border movements when it is completed in 2018.
Property players around the Johor city area are already rubbing their hands in glee. 'The South Key project just got better with the rail connection,' declared CH William's Mr Yeo. The promoters of the RM12 billion (S$5.1 billion) mixed development project on the former Majidi army campsite plan to launch the first phase involving three-storey shop lots in the coming months.
Sentiments have improved on the latest developments, Mr Yeo said, adding that with inflation likely to see a higher jump should the Goods & Services Tax be implemented next year, properties are a better hedge against inflation. 'All that coupled with the recent rate hike will only push buyers to commit earlier rather than later in order to lock in rates.'
Even so, the momentum is only expected to pick up once more Singapore money starts to trickle in.
Source: Business Times, 27 May 2010
Tuesday, May 25, 2010
Wellness township project to be launched within 12 months
Khazanah, Temasek to jointly develop 200 ha site in Johor
(SINGAPORE) A huge 200 hectare site - the size of 374 football fields - will be set aside for a joint 'wellness township' that Singapore and Malaysia plan to build.
The township, in Johor's Iskandar Malaysia zone, will be developed by a 50-50 joint venture set up by the Malaysian government's investment company Khazanah Nasional and Singapore's state investment company Temasek Holdings.
Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak said at a news conference after their retreat yesterday that the private sectors in both countries will be invited to take part in the project, which is expected to be launched within 12 months.
The idea of a wellness township was first mooted during an official visit to Singapore by Mr Najib in April last year. He said yesterday: 'We agreed that there must be real and substantive progress on this development, and today's meeting has defined the framework and concept.'
The project will offer holistic wellness services and facilities, such as alternative medicine and traditional healing.
During a closed-door retreat at the Shangri-La Hotel, the leaders also discussed the controversial water issue - in particular, the first water agreement between the two neighbours that is set to expire on Aug 31 next year.
Mr Lee said that the Skudai Water Works treatment plant in Johor, which Singapore has been using to extract water from the river, will be handed over to Malaysia 'in good working order' without any charge.
The idea of a third bridge linking the two countries - first floated when Mr Lee and Mr Najib met a year ago in Singapore - was also raised briefly during yesterday's news conference, when a Malaysian reporter asked Mr Najib for an update on whether the project could take flight.
Responding, Mr Najib said that the third link - in addition to the Causeway and the Second Link - was envisaged as a 'long-term project'.
'Our immediate priority is to maximise the usage of the Second Link, so we don't have any time frame with respect to the third link,' he said.
During last year's meeting with Mr Lee, Mr Najib proposed the construction of a bridge linking the eastern side of Johor - from Pengerang and Desaru - to Singapore in view of the increasing movements between both countries.
Source: Business Times, 25 May 2010
(SINGAPORE) A huge 200 hectare site - the size of 374 football fields - will be set aside for a joint 'wellness township' that Singapore and Malaysia plan to build.
The township, in Johor's Iskandar Malaysia zone, will be developed by a 50-50 joint venture set up by the Malaysian government's investment company Khazanah Nasional and Singapore's state investment company Temasek Holdings.
Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak said at a news conference after their retreat yesterday that the private sectors in both countries will be invited to take part in the project, which is expected to be launched within 12 months.
The idea of a wellness township was first mooted during an official visit to Singapore by Mr Najib in April last year. He said yesterday: 'We agreed that there must be real and substantive progress on this development, and today's meeting has defined the framework and concept.'
The project will offer holistic wellness services and facilities, such as alternative medicine and traditional healing.
During a closed-door retreat at the Shangri-La Hotel, the leaders also discussed the controversial water issue - in particular, the first water agreement between the two neighbours that is set to expire on Aug 31 next year.
Mr Lee said that the Skudai Water Works treatment plant in Johor, which Singapore has been using to extract water from the river, will be handed over to Malaysia 'in good working order' without any charge.
The idea of a third bridge linking the two countries - first floated when Mr Lee and Mr Najib met a year ago in Singapore - was also raised briefly during yesterday's news conference, when a Malaysian reporter asked Mr Najib for an update on whether the project could take flight.
Responding, Mr Najib said that the third link - in addition to the Causeway and the Second Link - was envisaged as a 'long-term project'.
'Our immediate priority is to maximise the usage of the Second Link, so we don't have any time frame with respect to the third link,' he said.
During last year's meeting with Mr Lee, Mr Najib proposed the construction of a bridge linking the eastern side of Johor - from Pengerang and Desaru - to Singapore in view of the increasing movements between both countries.
Source: Business Times, 25 May 2010
Friday, May 7, 2010
Fraser keen to buy Malaysia malls
FRASERS Centrepoint Trust (FCT) said yesterday it is confident of maintaining historical revenue growth rates and is looking to buy malls in Malaysia to diversify its business.
FCT, which owns four suburban malls in Singapore, recorded compounded gross revenue growth of 7.5 per cent per annum since listing in 2006. During this period, distribution to shareholders rose by an average of 5.7 per cent per unit each year.
'Looking at revenue trends and looking at rental reversions, in general, we think that this is quite a sustainable trend,' chief executive Chew Tuan Chiong said when asked if growth was sustainable.
'There was growth even during the downturn and right now, things are looking bright,' he told Reuters in an interview.
He said rental income from existing malls could rise as rents at its properties are below the market average, although he added that FCT preferred to 'put less pressure' on tenants.
The property trust recently refurbished one of its malls called Northpoint, which is already benefiting from a higher stream of rental income. Rents at Northpoint have risen by about 20 per cent since the renovations, he said.
Most analysts have a 'buy' recommendation on FCT, favouring it over rivals such as CapitaMall Trust and Suntec due to the greater potential for rent increases.
FCT will also benefit from the likely injection of new properties by parent Fraser and Neave , a property, beer and soft drinks conglomerate.
OCBC, for example, predicts FCT could raise rents at Causeway Point, the trust's largest property, to S$13-S$14 per square foot per month from S$11-12 psf/month through asset enhancement.
Mr Chew, who joined FCT in March this year, said the trust will buy malls with stable income streams from its parent company as well as seek acquisitions from third parties.
'We are quite interested in Malaysia because we have very similar operations parameters,' he said.
FCT already owns a 31 per cent stake in Hektar Reit, a Malaysian-listed Reit, and Mr Chew said the Singapore property trust is prepared to invest directly in Malaysian malls.
Mr Chew said FCT plans to stay focused on Singapore suburban malls as they command steady rents unlike swankier malls along the Orchard Road shopping belt that depend a lot on tourism. -- Reuters
Source: Business Times, 7 May 2010
FCT, which owns four suburban malls in Singapore, recorded compounded gross revenue growth of 7.5 per cent per annum since listing in 2006. During this period, distribution to shareholders rose by an average of 5.7 per cent per unit each year.
'Looking at revenue trends and looking at rental reversions, in general, we think that this is quite a sustainable trend,' chief executive Chew Tuan Chiong said when asked if growth was sustainable.
'There was growth even during the downturn and right now, things are looking bright,' he told Reuters in an interview.
He said rental income from existing malls could rise as rents at its properties are below the market average, although he added that FCT preferred to 'put less pressure' on tenants.
The property trust recently refurbished one of its malls called Northpoint, which is already benefiting from a higher stream of rental income. Rents at Northpoint have risen by about 20 per cent since the renovations, he said.
Most analysts have a 'buy' recommendation on FCT, favouring it over rivals such as CapitaMall Trust and Suntec due to the greater potential for rent increases.
FCT will also benefit from the likely injection of new properties by parent Fraser and Neave , a property, beer and soft drinks conglomerate.
OCBC, for example, predicts FCT could raise rents at Causeway Point, the trust's largest property, to S$13-S$14 per square foot per month from S$11-12 psf/month through asset enhancement.
Mr Chew, who joined FCT in March this year, said the trust will buy malls with stable income streams from its parent company as well as seek acquisitions from third parties.
'We are quite interested in Malaysia because we have very similar operations parameters,' he said.
FCT already owns a 31 per cent stake in Hektar Reit, a Malaysian-listed Reit, and Mr Chew said the Singapore property trust is prepared to invest directly in Malaysian malls.
Mr Chew said FCT plans to stay focused on Singapore suburban malls as they command steady rents unlike swankier malls along the Orchard Road shopping belt that depend a lot on tourism. -- Reuters
Source: Business Times, 7 May 2010
Thursday, April 15, 2010
Aussie firm to invest in Johor waterfront project
Senibong Cove homes on freehold land will cost 30% more than rivals’
AUSTRALIA’S Walker Corporation has unveiled a planned RM1.7 billion (S$734 million) waterfront project along Danga Bay to the Lunchoo River, which is expected to spur further investments on the eastern side of Johor.
Front Concept, a joint venture company between Walker and the landowner Iskandar Waterfront Sdn Bhd, would develop Senibong Cove on 208 acres of freehold land, ‘a stone’s throw’ from Singapore’s Safra Beach Club.
Previously mangrove/ marsh land, Front Concept has spent RM50 million on clearing and reclamation works and expects the first phase of 244 houses to be completed by early 2012, Walker Corp executive chairman Lang Walker said at a ground breaking ceremony in Johor yesterday.
Walker Corp holds a majority stake in the project which is to be modelled after the Gold Coast’s Hope Island Resort. Its gross development value upon completion is estimated at RM1.7 billion.
Senibong Cove would have a 100-berth marina, clubhouse, shopping and recreation club as well as homes and apartments and cost about 30 per cent more than conventional residential projects.
Even so, Mr Walker said prices had been kept affordable – an apartment is priced from RM290,000 while bungalows cost from RM1.8 million – and that more than 100 units worth nearly RM100 million had been sold even before the official launch.
‘The main advantage is JB’s proximity to Singapore, which means we can easily tap into an international market which offers enormous possibilities. The sector factor is JB’s huge waterfront area, almost all of which is undeveloped.’
He said he had initially been keen on the waterfront land along Lido Beach, but legal encumbrances on the land put paid to that plan, while Singapore was not an option because of the exorbitant land prices.
Johor chief minister Ghani Othman expressed delight at the ’signature development’ on the eastern side of Iskandar Malaysia, the special economic corridor which the government hopes to transform into a growth engine.
In the past, the focus has been on the western side of Danga Bay to Nusajaya where Middle East investors have come in on many proposed key projects. Dubai’s Limitless, for example, entered into a joint venture with UEM Land at Puteri Harbour to build an exclusive waterfront precinct estimated at over RM1.5 billion in gross development value and which was to be completed in 2013.
Even so, Johoreans say progress is slow, mainly because of the debt crisis which hit the Middle East and Dubai in particular.
But the state has been putting up infrastructure to assist investment flow. Upon completion of the Eastern Dispersal Link in the first quarter of 2012, Senibong Cove can be reached by car in about 15 minutes from JB’s central business district as well as the new CIQ complex.
Other waterfront developments are also in the pipeline. Another mega project along Lido Boulevard by privately held Central Malaysian Properties will be launched in a few months. CMP’s shareholders include Kumpulan Prasarana Rakyat Johor, a wholly-owned state agency which also has a stake in Iskandar Waterfront.
Source: Business Times, 15 Apr 2010
AUSTRALIA’S Walker Corporation has unveiled a planned RM1.7 billion (S$734 million) waterfront project along Danga Bay to the Lunchoo River, which is expected to spur further investments on the eastern side of Johor.
Front Concept, a joint venture company between Walker and the landowner Iskandar Waterfront Sdn Bhd, would develop Senibong Cove on 208 acres of freehold land, ‘a stone’s throw’ from Singapore’s Safra Beach Club.
Previously mangrove/ marsh land, Front Concept has spent RM50 million on clearing and reclamation works and expects the first phase of 244 houses to be completed by early 2012, Walker Corp executive chairman Lang Walker said at a ground breaking ceremony in Johor yesterday.
Walker Corp holds a majority stake in the project which is to be modelled after the Gold Coast’s Hope Island Resort. Its gross development value upon completion is estimated at RM1.7 billion.
Senibong Cove would have a 100-berth marina, clubhouse, shopping and recreation club as well as homes and apartments and cost about 30 per cent more than conventional residential projects.
Even so, Mr Walker said prices had been kept affordable – an apartment is priced from RM290,000 while bungalows cost from RM1.8 million – and that more than 100 units worth nearly RM100 million had been sold even before the official launch.
‘The main advantage is JB’s proximity to Singapore, which means we can easily tap into an international market which offers enormous possibilities. The sector factor is JB’s huge waterfront area, almost all of which is undeveloped.’
He said he had initially been keen on the waterfront land along Lido Beach, but legal encumbrances on the land put paid to that plan, while Singapore was not an option because of the exorbitant land prices.
Johor chief minister Ghani Othman expressed delight at the ’signature development’ on the eastern side of Iskandar Malaysia, the special economic corridor which the government hopes to transform into a growth engine.
In the past, the focus has been on the western side of Danga Bay to Nusajaya where Middle East investors have come in on many proposed key projects. Dubai’s Limitless, for example, entered into a joint venture with UEM Land at Puteri Harbour to build an exclusive waterfront precinct estimated at over RM1.5 billion in gross development value and which was to be completed in 2013.
Even so, Johoreans say progress is slow, mainly because of the debt crisis which hit the Middle East and Dubai in particular.
But the state has been putting up infrastructure to assist investment flow. Upon completion of the Eastern Dispersal Link in the first quarter of 2012, Senibong Cove can be reached by car in about 15 minutes from JB’s central business district as well as the new CIQ complex.
Other waterfront developments are also in the pipeline. Another mega project along Lido Boulevard by privately held Central Malaysian Properties will be launched in a few months. CMP’s shareholders include Kumpulan Prasarana Rakyat Johor, a wholly-owned state agency which also has a stake in Iskandar Waterfront.
Source: Business Times, 15 Apr 2010
Friday, April 9, 2010
Sunway City may list biggest Reit in Malaysia
GIC could be major shareholder in proposed venture with RM3b assets
SUNWAY City (SunCity), which counts the Government of Singapore Investment Corporation (GIC) as its second largest shareholder, could list Malaysia’s biggest real estate investment trust (Reit) by mid-year. It has already identified eight size- able assets to be injected into the trust.
A combination of hotels, retail and offices would be injected into the Reit whose assets are valued at over RM3 billion (S$1.3 billion). These include the popular Sunway Pyramid Shopping Mall and Resort Hotel & Spa, the Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, SunCity Ipoh Hypermarket, and Sunway Tower.
Its listing, previously delayed because of the global financial crisis, is expected over the next few months.
SunCity and its subsidiaries are proposing to dispose of their entire interest in the assets to a Reit for a consideration to be determined later, the company said in an announcement to the exchange on Wednesday.
In a report yesterday, Hwang-DBS said it expects the disposal to be satisfied by a combination of cash and units in the Reit and that SunCity, whose biggest shareholders are Jeffrey Cheah Fook Ling (40 per cent) and GIC (21.3 per cent), would likely want to own a third of the Reit.
GIC is also expected to be a major shareholder in the Reit, given its 48 per cent ownership of prized assets Sunway Pyramid and Sunway Resort Hotel, which were acquired during the Asian financial crisis of the late 1990s when the then debt-laden group invited the Singapore investment agency to be a partner.
Hwang-DBS said SunCity management was aiming for a 6-7 per cent yield – versus the sector’s 8.5 per cent – justifying it on grounds that the Reit would be the biggest in Malaysia. Moreover, it has a strong pipeline in place, given that the group owns numerous other properties.
Malaysia has eleven Reits with YTL group’s Starhill Reit currently the largest with assets exceeding RM1 billion. However, despite better returns than fixed deposits – some Reits returned yields of up to 5.5 per cent last year – investors have been slow to warm to their potential.
In any event, SunCity’s proposed Reit would help promote the vehicle as an investment option and at the same time help it unlock value and improve return on assets.
SunCity is expected to receive net proceeds of about RM560 million after paying about RM750 million of Reit asset-related debts, which could be used for land bank acquisitions and the development of new investment properties, said Hwang- DBS, which has upgraded the stock to a ‘buy’.
Source: Business Times, 9 Apr 2010
SUNWAY City (SunCity), which counts the Government of Singapore Investment Corporation (GIC) as its second largest shareholder, could list Malaysia’s biggest real estate investment trust (Reit) by mid-year. It has already identified eight size- able assets to be injected into the trust.
A combination of hotels, retail and offices would be injected into the Reit whose assets are valued at over RM3 billion (S$1.3 billion). These include the popular Sunway Pyramid Shopping Mall and Resort Hotel & Spa, the Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, SunCity Ipoh Hypermarket, and Sunway Tower.
Its listing, previously delayed because of the global financial crisis, is expected over the next few months.
SunCity and its subsidiaries are proposing to dispose of their entire interest in the assets to a Reit for a consideration to be determined later, the company said in an announcement to the exchange on Wednesday.
In a report yesterday, Hwang-DBS said it expects the disposal to be satisfied by a combination of cash and units in the Reit and that SunCity, whose biggest shareholders are Jeffrey Cheah Fook Ling (40 per cent) and GIC (21.3 per cent), would likely want to own a third of the Reit.
GIC is also expected to be a major shareholder in the Reit, given its 48 per cent ownership of prized assets Sunway Pyramid and Sunway Resort Hotel, which were acquired during the Asian financial crisis of the late 1990s when the then debt-laden group invited the Singapore investment agency to be a partner.
Hwang-DBS said SunCity management was aiming for a 6-7 per cent yield – versus the sector’s 8.5 per cent – justifying it on grounds that the Reit would be the biggest in Malaysia. Moreover, it has a strong pipeline in place, given that the group owns numerous other properties.
Malaysia has eleven Reits with YTL group’s Starhill Reit currently the largest with assets exceeding RM1 billion. However, despite better returns than fixed deposits – some Reits returned yields of up to 5.5 per cent last year – investors have been slow to warm to their potential.
In any event, SunCity’s proposed Reit would help promote the vehicle as an investment option and at the same time help it unlock value and improve return on assets.
SunCity is expected to receive net proceeds of about RM560 million after paying about RM750 million of Reit asset-related debts, which could be used for land bank acquisitions and the development of new investment properties, said Hwang- DBS, which has upgraded the stock to a ‘buy’.
Source: Business Times, 9 Apr 2010
Thursday, April 1, 2010
Setia chalks up sales of RM900m in 5 months
Property developer SP Setia Bhd has recorded RM900 million (S$385.6 million) in sales as of March 22, less than five months into the current financial year ending Oct 31, 2010.
Its president and chief executive officer Liew Kee Sin attributed this to the strong underlying demand for good properties, fuelled by increasingly confident business and consumer sentiment as well as a highly supportive financial sector.
‘This achievement clearly shows we are on track to meet the sales target of RM2 billion set for the financial year,’ he said.
Speaking at a press conference at Invest Malaysia 2010 in Kuala Lumpur, Mr Liew said that the company is keen to bid for the parcels of government land announced by Prime Minister Najib Razak. On Tuesday, Mr Najib announced that the government will tender a few land lots in Jalan Stonor, Jalan Ampang and Jalan Lidcol in Kuala Lumpur.
Mr Liew said the company is interested in pursuing such opportunities along with other strategic collaborations with government-linked or government holding companies. ‘We welcome the government’s move to monetise government assets via outright sales or joint ventures,’ he added.
On the industry outlook, Mr Liew said: ‘The Malaysia property market is sound and resilient.’ He said prospects and opportunities for quality developers are plentiful and will only get better, as income levels rise and good landbanks are released to be developed into sustainable environments.
Source: Business Times, 1 Apr 2010
Its president and chief executive officer Liew Kee Sin attributed this to the strong underlying demand for good properties, fuelled by increasingly confident business and consumer sentiment as well as a highly supportive financial sector.
‘This achievement clearly shows we are on track to meet the sales target of RM2 billion set for the financial year,’ he said.
Speaking at a press conference at Invest Malaysia 2010 in Kuala Lumpur, Mr Liew said that the company is keen to bid for the parcels of government land announced by Prime Minister Najib Razak. On Tuesday, Mr Najib announced that the government will tender a few land lots in Jalan Stonor, Jalan Ampang and Jalan Lidcol in Kuala Lumpur.
Mr Liew said the company is interested in pursuing such opportunities along with other strategic collaborations with government-linked or government holding companies. ‘We welcome the government’s move to monetise government assets via outright sales or joint ventures,’ he added.
On the industry outlook, Mr Liew said: ‘The Malaysia property market is sound and resilient.’ He said prospects and opportunities for quality developers are plentiful and will only get better, as income levels rise and good landbanks are released to be developed into sustainable environments.
Source: Business Times, 1 Apr 2010
Thursday, March 25, 2010
Govt stimulus buoys M’sian property
Market may not have rebounded to levels seen elsewhere but it posted a decent performance in 2009, reports PAULINE NG
IT may have been counter-intuitive, but 2009 proved to be a good year for Malaysian developers, the recession notwithstanding. The property market may not have rebounded to the levels experienced in other markets such as Singapore, Australia or Hong Kong, but it was generally decent.
Despite economic output contracting by 1.7 per cent, Jones Lang Wootton executive director Malathi Thevendran described last year as ‘exceptional’ for the property sector, which was buoyed by a RM67 billion (S$28 billion) stimulus package, cuts in lending rates, and attractive developer incentives such as the 5:95 home deal, where buyers foot just 5 per cent of the bill until completion.
CH Williams Talhar & Wong (CTW) director Foo Gee Jen observed that landed properties did well, listing Lake Edge and Sunway Kiara Hills as examples, because ‘the rich were less affected’.
Generally, there were no major price reductions of residential properties, except for high-end condominiums in areas where mainly foreign interest had led to intense speculation and hence strong capital appreciation in 2008. This would be largely in the premium Kuala Lumpur City Centre area and Mont Kiara where existing stock is estimated at slightly below 4,500 and 9,000 units, respectively. Because of the robust supply pipeline and a limited expat base, recovery is expected to be slower.
Tightening
Last month, the central bank moved to curb the swirling liquidity and possibility of inflated assets by lifting the key interest rate by 25 basis points to 2.25 per cent. It has hinted at more increases to come but plans to keep rates ’supportive of growth.’
Notwithstanding monetary tightening, property analysts do not foresee too much of an impact on launches or transactions given that developers are expected to continue to offer buyers the best deals.
CTW’s Mr Foo anticipates a greater range of new products this year, ‘likely not high-end, but mid to mid-high’ types of around RM250,000 to RM500,000 – mainly terrace houses outside the more established townships since those in the more popular suburbs of the Klang Valley cost upwards of RM800,000.
Ms Thevendran concurs. Houses in the RM400,000 to RM500,000 price range have seen ‘higher sales rates’ in recent months and ’schemes by reputable developers particularly to the west of Kuala Lumpur continue to experience strong demand’, she said.
With the lower end category over-done in the 1990s, builders are now focusing on the higher end as buyers have grown more discerning. She said the supply of houses over the past decade has expanded by 9 per cent per annum compared to 21 per cent for the high end and 11 per cent for lower end condo segments respectively.
Besides the Klang Valley – the centre for employment opportunities and hence inter-state migration – Penang and Johor Baru should also continue to see robust housing demand, especially projects with reputable developers and in close proximity to upgraded roads, new highways and public transport.
Because of the government’s aim to leverage Iskandar Malaysia as a growth area, infrastructure development is currently strongest in Johor Baru. New highways and links are being built especially in the south near the city and state administrative centre, Causeway and Second Link.
With better links and more commercial and leisure activities taking place, Iskandar promoters expect a ‘tipping point’ to be reached next year or the year after. The blueprints being rolled out appear to support this belief.
Big projects
Take the two massive developments in the pipeline. The 300-acre South Key project on the former Majidi Army camp site in the city, envisages festive malls, alfresco dining, shops, corporate offices and the like in a fully integrated development that could be built over 12-15 years. Its estimated gross development value (GDV) is RM12 billion.
Lido Boulevard, although a third of South Key’s GDV, will not be minor. Undertaken by Central Malaysian Properties (CMP), the 123-acre project along the Johor Straits will stretch from the current abandoned Lot 1 shopping mall to the Harbour Master’s office.
Land reclamation will soon commence for the waterfront development which will include high-end condos, hotels, a mall, cultural centre, indoor snow park and a ‘garden city.’ CMP plans to launch the Lido Residences by the second half of the year. Its managing director Chan Tien Ghee said the 908-unit residences attracted a lot of foreign interest (Singaporeans and Indonesians in particular) at a soft launch.
The waterfront apartments would be fully furnished and sized from about 1,800 square feet. When asked about pricing, he told BT: ‘We are talking about a very high niche.’
CTW director Danny Yeo said the Johor property market has had a generally poor decade. But looking ahead, he said the ‘right projects’ – waterfront, secure, and those boasting developers with a good track record – will have minimal downside risks. He also recommends inter-city developments as they are ‘even cheaper than in a smaller town like Kuantan.’
‘If you are a Singaporean and have the intention to buy with a view to reside, it is a good time to do so now especially near the Nusajaya side,’ he opined. For investors, he suggests that commercial real estate is ‘a better bet.’ As in the case of the administrative city of Putrajaya, pricing for some of the residential developments could be ‘ahead of time’.
He believes now is the time for developers eyeing Iskandar to make a move as once the tipping point has been reached, land will cost more. ‘The question is do you believe in Iskandar?’
Penang prices
Going by Penang’s ever-rising property prices, many appear to believe in the island state. ‘Penang property has gone crazy because of the limitations (of being an island). Prices on the mainland have also improved but it’s industry driven,’ said Mr Foo.
A Penang think-tank attributed property increases in the state to the lack of land but also to speculation, robust investor demand from wealthy Malaysians and foreigners, and low cost of funds.
Over the period 1999 to 2008, Penang properties had increased a tenth more than the national average, according to Michael Lim, a senior fellow at the Socio-Economic and Environmental Research Institute. But with developers focusing mainly on the growing demand for higher-end products, signs of an under-supply of affordable housing were beginning to emerge, Mr Lim told a roundtable on the gap in affordable housing in George Town recently.
Penang could also be a victim of its own success with a growing number of residents upset over the burgeoning high-rise projects now dominating the landscape.
Henry Butcher Malaysia senior manager Fook Tone Huat has a suggestion: Look across the island to Seberang Prai – twice the island’s size and about 40 per cent cheaper. He expects the area to see a 10 per cent appreciation in price owing to its higher population density compared to the surrounding areas in the north.
Source: Business Times, 25 Mar 2010
IT may have been counter-intuitive, but 2009 proved to be a good year for Malaysian developers, the recession notwithstanding. The property market may not have rebounded to the levels experienced in other markets such as Singapore, Australia or Hong Kong, but it was generally decent.
Despite economic output contracting by 1.7 per cent, Jones Lang Wootton executive director Malathi Thevendran described last year as ‘exceptional’ for the property sector, which was buoyed by a RM67 billion (S$28 billion) stimulus package, cuts in lending rates, and attractive developer incentives such as the 5:95 home deal, where buyers foot just 5 per cent of the bill until completion.
CH Williams Talhar & Wong (CTW) director Foo Gee Jen observed that landed properties did well, listing Lake Edge and Sunway Kiara Hills as examples, because ‘the rich were less affected’.
Tightening
Last month, the central bank moved to curb the swirling liquidity and possibility of inflated assets by lifting the key interest rate by 25 basis points to 2.25 per cent. It has hinted at more increases to come but plans to keep rates ’supportive of growth.’
Notwithstanding monetary tightening, property analysts do not foresee too much of an impact on launches or transactions given that developers are expected to continue to offer buyers the best deals.
CTW’s Mr Foo anticipates a greater range of new products this year, ‘likely not high-end, but mid to mid-high’ types of around RM250,000 to RM500,000 – mainly terrace houses outside the more established townships since those in the more popular suburbs of the Klang Valley cost upwards of RM800,000.
Ms Thevendran concurs. Houses in the RM400,000 to RM500,000 price range have seen ‘higher sales rates’ in recent months and ’schemes by reputable developers particularly to the west of Kuala Lumpur continue to experience strong demand’, she said.
With the lower end category over-done in the 1990s, builders are now focusing on the higher end as buyers have grown more discerning. She said the supply of houses over the past decade has expanded by 9 per cent per annum compared to 21 per cent for the high end and 11 per cent for lower end condo segments respectively.
Besides the Klang Valley – the centre for employment opportunities and hence inter-state migration – Penang and Johor Baru should also continue to see robust housing demand, especially projects with reputable developers and in close proximity to upgraded roads, new highways and public transport.
Because of the government’s aim to leverage Iskandar Malaysia as a growth area, infrastructure development is currently strongest in Johor Baru. New highways and links are being built especially in the south near the city and state administrative centre, Causeway and Second Link.
With better links and more commercial and leisure activities taking place, Iskandar promoters expect a ‘tipping point’ to be reached next year or the year after. The blueprints being rolled out appear to support this belief.
Big projects
Take the two massive developments in the pipeline. The 300-acre South Key project on the former Majidi Army camp site in the city, envisages festive malls, alfresco dining, shops, corporate offices and the like in a fully integrated development that could be built over 12-15 years. Its estimated gross development value (GDV) is RM12 billion.
Lido Boulevard, although a third of South Key’s GDV, will not be minor. Undertaken by Central Malaysian Properties (CMP), the 123-acre project along the Johor Straits will stretch from the current abandoned Lot 1 shopping mall to the Harbour Master’s office.
Land reclamation will soon commence for the waterfront development which will include high-end condos, hotels, a mall, cultural centre, indoor snow park and a ‘garden city.’ CMP plans to launch the Lido Residences by the second half of the year. Its managing director Chan Tien Ghee said the 908-unit residences attracted a lot of foreign interest (Singaporeans and Indonesians in particular) at a soft launch.
The waterfront apartments would be fully furnished and sized from about 1,800 square feet. When asked about pricing, he told BT: ‘We are talking about a very high niche.’
CTW director Danny Yeo said the Johor property market has had a generally poor decade. But looking ahead, he said the ‘right projects’ – waterfront, secure, and those boasting developers with a good track record – will have minimal downside risks. He also recommends inter-city developments as they are ‘even cheaper than in a smaller town like Kuantan.’
‘If you are a Singaporean and have the intention to buy with a view to reside, it is a good time to do so now especially near the Nusajaya side,’ he opined. For investors, he suggests that commercial real estate is ‘a better bet.’ As in the case of the administrative city of Putrajaya, pricing for some of the residential developments could be ‘ahead of time’.
He believes now is the time for developers eyeing Iskandar to make a move as once the tipping point has been reached, land will cost more. ‘The question is do you believe in Iskandar?’
Penang prices
Going by Penang’s ever-rising property prices, many appear to believe in the island state. ‘Penang property has gone crazy because of the limitations (of being an island). Prices on the mainland have also improved but it’s industry driven,’ said Mr Foo.
A Penang think-tank attributed property increases in the state to the lack of land but also to speculation, robust investor demand from wealthy Malaysians and foreigners, and low cost of funds.
Over the period 1999 to 2008, Penang properties had increased a tenth more than the national average, according to Michael Lim, a senior fellow at the Socio-Economic and Environmental Research Institute. But with developers focusing mainly on the growing demand for higher-end products, signs of an under-supply of affordable housing were beginning to emerge, Mr Lim told a roundtable on the gap in affordable housing in George Town recently.
Penang could also be a victim of its own success with a growing number of residents upset over the burgeoning high-rise projects now dominating the landscape.
Henry Butcher Malaysia senior manager Fook Tone Huat has a suggestion: Look across the island to Seberang Prai – twice the island’s size and about 40 per cent cheaper. He expects the area to see a 10 per cent appreciation in price owing to its higher population density compared to the surrounding areas in the north.
Source: Business Times, 25 Mar 2010
Subscribe to:
Posts (Atom)