Monday 13 May 2013

HwangDBS Vickers Research has re-rated the Malaysian property sector, calling it a “new dawn”


HwangDBS Vickers Research has re-rated the Malaysian property sector, calling it a “new dawn” on the back of upcoming mega initial public offerings, approval for new rail lines and the award of government land projects.
Beneficiaries include SP Setia Bhd, KLCC Real Estate Investment Trust (KLCC REIT), E&O Bhd and YTL Land & Development Bhd. Valuations are expected to be re-rated as sales and landbanking pick up.
Property analyst Yee Mei Hui said that it was business as usual now that the general election was over. There are likely to be no major changes in policies, as Federal and state governments for key markets in Kuala Lumpur, Selangor, Penang and Johor remain status quo. She said that launches should resume and sales should pick up as uncertainty dissipates.
“We upgrade E&O and YTL Land & Development to buy’ from hold’, and raise target prices across the board by 6% to 63%.
“For big caps, we like laggards like SP Setia, as its Battersea project in the United Kingdom is a game-changer to double earnings, while Malaysian Resources Corp Bhd stands to benefit from PJ Sentral, which could be the next KL Sentral,” Yee said.
“For exposure to Iskandar Malaysia, we see more value in small mid-caps like Crescendo Corp Bhd and Daiman Development Bhd versus UEM Land Holdings Bhd after the recent strong rally.”
She added that there would be potential competition from new bellweather stock IOI Properties Bhd and other Khazanah Nasional Bhd-led vehicles seeking listing, for instance, Iskandar Waterfront Holdings Sdn Bhd, Medini Iskandar or other potential themed attractions.
For the KLCC stapled security, Yee has factored in the potential injection of the Suria mall into the REIT, which will boost her sum of parts by 17%.
Yee said that the mega listings, which range from market capitalisations of RM9bil to RM13bil such as for KLCC REIT, Iskandar Waterfront and IOI Properties (which will be the largest developer by earnings), would help re-rate the sector.
“We are more positive on IOI Properties, given the dearth of sizeable entrepreneurial-driven developers with strong track records and earnings growth.
“The approval of the MRT 2 and 3 lines and the KL-Singapore high speed rail, along with the acceleration in awards of government redevelopment projects such as the Rubber Research Institute of Malaysia land in Sungai Buloh, the financial district of Tun Razak Exchange and Bandar Malaysia in Sungai Besi, should also boost interest in the sector,” noted Yee.
Source The star, May 11 2013

Confirmed: Bangkok’s Central Group will open mall in Shah Alam’s i-City


SHAH ALAM: Property developer I-Bhd and Thai mall specialist CPN Global Company Ltd have entered into a joint venture to build a 1.5 million sq ft mall in I-Bhd’s flagship development i-City with a gross development value of RM580mil.
I-Bhd would have a 40% stake via i-City Properties Sdn Bhd (ICP) in the joint venture while CPN would have the remainder stake via two locally incorporated companies – CPN Real Estate Sdn Bhd and CPN Malls Malaysia Sdn Bhd.
Construction for the mall will begin next year and is targeted for completion by the end of 2016.
“We are honoured to spur the economy with this agreement, more so given that this is the first fruits of foreign direct investments for the country after the May 5 general election,” founder and executive chairman of I-Bhd Tan Sri Lim Kim Hong said at the signing ceremony to mark the joint venture yesterday.
“At the end of the day, we envisage our shopping mall being a regional shopping paradise that is capable of boosting both the economic development of Shah Alam and Selangor as a whole,” Lim added.
CPN Real Estate, CPN Malls Malaysia and ICP would also enter into a shareholders agreement for the purpose of acquiring a part of the land in i-City to develop the mall.
The mall would be developed on a freehold plot of land measuring 11.12 acres with gross floor area of about 1.5 million sq ft and net leasable areas of 1 million sq ft.
The development marks CPN’s first foray into Malaysia.
“This important decision marks CPN’s first strategic move in Asean and our confidence in the Malaysian economy,” said CPN president and chief executive officer Kobchai Chirathivat.
CPN, according to a press statement, is the largest specialist developer and manager of large-format and integrated shopping centres established in June 1980 and listed since March 1, 1995 on the Stock Exchange of Thailand.
“We believe ICP’s expertise in construction management as well as local market understanding and strong government relations will greatly contribute to the success of this project. In the same way, CPN will contribute our expertise in retail property development to make this project a great success,” Chirathivat said.
The joint venture would be led by CPN while I-Bhd chief executive officer Datuk Eu Hong Chew said the company’s focus would be on developing the rest of i-City.
“We pass it to the experts as we want to focus on developing the rest of i-City. They will take the lead in design, building and managing the mall,” Eu said.
Meanwhile, I-Bhd posted a huge increase of RM4.92mil in net profit for the first quarter ended March 31 compared to RM819,000 a year ago on revenue which rose by 213.82% to RM27.14mil. It said in an announcement to Bursa Malaysia that the earnings were mainly due to profit recognition from ongoing projects of the property development division and the introduction of more theme park games under the leisure division.
Source The Star, May 14 2013, By DANIEL KHOO

Malton gets JCorp’s Pusat Bandar Damansara in exchange for VSQ


KUALA LUMPUR: Property developer Malton Bhd is selling a 20-storey office building located in Petaling Jaya to Johor Corp for RM140mil via an asset exchange exercise.
Malton said in a filing with Bursa Malaysia that a sale and purchase agreement was entered into between a wholly-owned subsidiary, Khuan Choo Property Management Sdn Bhd (KCPM), and Bukit Damansara Development Sdn Bhd (BDDSB), a subsidiary of JCorp.
It said the disposal of the property, known as VSQ would see KCPM and BDDSB enter into a “proposed asset exchange”, in which KCPM would acquire the redeveloped Pusat Bandar Damansara Kuala Lumpur (PBD Complex) from BDDSB worth RM140mil.
The consideration of RM140mil was arrived at on a willing-buyer willing-seller basis between KCPM and BDDSB after taking into account several factors including its net book and market values as well as potential future rental returns and capital appreciation of the office space.
As of June 30, the net book value of VSQ properties amounted to RM85.4mil based on the audited financial statements of KCPM while the valuation exercise carried out by CH Williams Talhar & Wong Sdn Bhd recently valued the VSQ properties at a market value of RM140mil.
“KCPM is able to dispose of the VSQ Properties which form substantially the balance development properties in V Square @ PJ City Centre on an en-bloc basis for a development profit of RM54.6mil; and it provides KCPM with an opportunity to invest in the office space under the subject entitlement which has very promising prospects for rental returns and capital appreciation as the property is located in a very prime and strategic location in Damansara Heights, Kuala Lumpur,” Malton said.
According to earlier reports, legal proceedings were begun by companies believed to be linked to Malton and JCorp concerning an old agreement to sell the PBD buildings last October but it is unknown if the legal issues surrounding the properties have been resolved. The case involves three units linked to Malton, which has initiated action against JCorp over a piece of land that the latter was supposed to have sold some years ago.
They demanded that JCorp hand over the land and buildings worth RM700mil.
Since then, PBD has been earmarked as one of the proposed mass rapid transit key stations and indications are that the property is now worth much more.
Source The Star May 14, 2013

MMC to develop its 4,500 acres in Iskandar into industrial properties


Hasni: ‘We sense that there are a lot of potential buyers out there’
KUALA LUMPUR: MMC Corp Bhd plans to further unlock the value of the company’s massive landbank, in excess of 4,500 acres located in Iskandar Malaysia, by strategically developing the land for industrial customers.
Group managing director Datuk Hasni Harun revealed that the company, via subsidiaries, has two large pieces of land in Johor located in the Tanjung Bin Petrochemical and Maritime Centre and Senai areas.
“The Tanjung Bin project is managed by Seaport Worldwide Sdn Bhd, a wholIy-owned company of Johor Port, which in turn a wholly-owned subsidiary of MMC. The project is expected to complement the Refinery And Petrochemicals Integrated Development (Rapid) project in Pengerang.
“We have secured an anchor client there, a joint-venture (JV) company between MISC Bhd and Vitol Plc and we are now in the midst of discussion with other clients that are interested and we sense that there are a lot of potential buyers out there,” he said at a press briefing after the company’s AGM.
For the other project in Senai, Hasni said in general there were three planned developments where the company has invested between RM200mil and RM300mil to equip the land with basic necessities such as connecting bridges and roads.
“The first is a mixed development of about 650 acres, next is another 1,000 acres area slated for Senai High-Tech City which has gained a free trade zone status and also another vast area for cargo to complement our Senai Airport operation.
“In general, the value of the land has risen quite substantially from our investment cost thus any disposal of these lands will provide a new cash flow to the company.
“Going forward, we estimate more industrial customers to come into our areas.
“We will build an industrial park with ready-made buildings and we are talking to some potential investors and JV partners to develop the land,” he said.
For its engineering and construction division, Hasni said MMC was interested in participating as a project delivery partner and underground work package contractor for the second and third lines of of the Klang Valley mass rapid transit (KVMRT) project as well as the high-speed rail project connecting Kuala Lumpur and Singapore.
“More updates on the KVMRT are expected in the next few months and we are very excited,” he said.
On the listing postponement of its 51%-owned power generating company, Malakoff Corp Bhd, Hasni said MMC planned to list Malakoff no later than the first half of next year.
Source : Star May 14, 2013 by SHARIDAN M. ALI 

Monday 6 May 2013

I&P plans 3 new townships in Klang, Iskandar Malaysia

KUALA LUMPUR: I&P Group Sdn Bhd is lining up new projects to add to its current developments that already stand to generate some RM25 billion in gross development value over the next 15-20 years.


I&P Group managing director Datuk Jamaludin Osman said I&P is in the midst of planning two new townships in Iskandar Malaysia, Johor, and one in Klang, Selangor.

I&P owns 133.2ha in Tanjung Kupang, a small village near Nusajaya in Gelang Patah, which is connected to Singapore via the Malaysia-Singapore Second Link. It also owns 360ha in Ulu Tiram, a town in Johor Baru that is accessible via Tebrau Highway and Senai-Desaru Expressway.

I&P Group managing director Datuk Jamaludin Osman said I&P is in the midst of planning two new townships in Iskandar Malaysia, Johor, and one in Klang, Selangor.

I&P owns 133.2ha in Tanjung Kupang, a small village near Nusajaya in Gelang Patah, which is connected to Singapore via the Malaysia-Singapore Second Link. 

It also owns 360ha in Ulu Tiram, a town in Johor Baru that is accessible via Tebrau Highway and Senai-Desaru Expressway.

I&P owns 133.2ha in Tanjung Kupang, a small village near Nusajaya in Gelang Patah, which is connected to Singapore via the Malaysia-Singapore Second Link. 

It also owns 360ha in Ulu Tiram, a town in Johor Baru that is accessible via Tebrau Highway and Senai-Desaru Expressway.

It also owns 360ha in Ulu Tiram, a town in Johor Baru that is accessible via Tebrau Highway and Senai-Desaru Expressway.

Plans are being made to develop the plots of land in Tanjung Kupang and Ulu Tiram. 
He said he is bullish on prospects for the proposed projects, adding that they may start in the next one to two years.

"We are mulling over several catalytic projects to form part of the township in Ulu Tiram and boost its potential. Tanjung Kupang, meanwhile, is situated near Singapore, which is one of the main markets we are targeting," Jamaludin said.

In Klang, I&P owns 160ha in Meru and development plans have been submitted to the authorities for approval. The company aims to launch the project by 2015.

"We are not resting on our laurels. We are planning new developments to diversify our earnings. 
"We are also launching new phases within our current townships, depending on marketability. We will be cautious as we do not want margins to be squeezed," he said.

For fiscal year 2009, I&P's group revenue was RM1.07 billion with a pre-tax profit of RM263.41 million for a profit margin of 24.5 per cent.Last year, the company's revenue was about RM1.14 billion with a pre-tax profit of RM378.25 million, resulting in a profit margin of 33 per cent.


Several options are being studied, including a mixed integrated project with high-end product offerings, Jamaludin said.

I&P, a wholly-owned unit of Permodalan Nasional Bhd, has 2,000ha under its belt and 13 ongoing township projects in the Klang Valley and Johor Baru. 


Source Business Times May 7, 2013, Sharen Kaur

Land acquisition Beranang, Ulu Langat : SP Setia

Extracted from Bursa Announcement: -

The Board of Directors of S P Setia (“Board”) wishes to announce that on 12 August 2011, Bukit Indah (Selangor) Sdn Bhd (“Bukit Indah” or “Purchaser”), a wholly-owned subsidiary of S P Setia, entered into a sale and purchase agreement (“SPA”) with Ban Guan Hin Realty Sdn Bhd (“Ban Guan Hin Realty” or “Vendor”) for the proposed purchase of a piece of freehold land held under Geran 45874 for Lot 39 Mukim Beranang, Daerah Ulu Langat, Negeri Selangor measuring 1,010.5 acres for a purchase consideration of RM330,130,350 (“Purchase Consideration”) or RM7.50 per square foot. (“Proposed Acquisition”) 
Land acquisition Beranang, Ulu Langat : SP Setia
The Said Land is held under Geran 45874 for Lot 39 Mukim Beranang, District of Ulu Langat, Negeri Selangor measuring 1,010.5 acres in total. 

The terrain of the Said Land is generally undulating and is zoned for mixed housing development. 

The Said Land is situated midway between the towns of Semenyih, Bangi Old Town and Beranang. It is approximately 5 kilometres south of Semenyih; 7 kilometres east of Bangi Old Town; and 2 kilometres north-west of Beranang. The Said Land is also located approximately 12 kilometres south of Kajang town and 25 kilometres south of Kuala Lumpur City Centre. 
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The travel time to Kuala Lumpur City Centre from the Said Land via Jalan Semenyih, which connects onto the Kajang SILK Highway and further onto the North-South Highway and Kuala Lumpur-Seremban Highway is approximately 40 minutes. 

The Said Land is approximately 15 minutes from the proposed Bandar Kajang MRT Station on the Sungai Buloh-Kajang Line. 

SP Setia Berhad : Land Acquisition in KL city

According to bursa announcement Malaysia: -

Tender for purchase by Setia Hicon Sdn Bhd (“Setia Hicon” or Purchaser), a wholly-owned subsidiary of S P Setia, of a piece of land held under Geran 10567, Lot 258, Seksyen 089A, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Wilayah Persekutuan measuring approximately 12,456 square metres together with the buildings and amenities erected thereon (“Property”) at a total price of RM294,965,304.00 (“Purchase Consideration”) has been accepted by The Secretary of State for Foreign and Commonwealth Affairs of the United Kingdom of Great Britain and Northern Ireland (“Vendor”). In this connection, the Vendor and the Purchaser have on 5 December 2012 entered into an agreement (“SPA”) for the sale and purchase of the Property (“Proposed Acquisition”).

This is analyzed at 2200 per sf. Ft. (land and building)

SP Setia Berhad : Land Acquisition in KL
The Property’s strategic location within the immediate vicinity of KLCC is undeniable.

The land enjoys a wide frontage of 312 feet fronting Jalan Ampang and is highly accessible through Jalan Ampang, the Ampang-KL Elevated Highway, Duta-Ulu Klang Expressway and Middle Ring Road 2. It is also within easy walking distance to the Ampang Park LRT Station.

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Apart from easy access and excellent transport infrastructure, the Property is located close to every conceivable amenity courtesy of its close proximity to the  Petronas Twin Towers. This includes numerous Grade-A office towers, 5-star hotels, medical centres, the Suria KLCC shopping centre, Dewan Filharmonik Petronas and the Royal Selangor Golf Club, to name but a few.

Over the past few years the Group has steadily grown its network of high-net-worth property purchasers who have strongly supported the launch of its numerous investment-grade projects such as KL Eco City in Bangsar, Fulton Lane in Melbourne and 18 Woodsville in Singapore. As the Group expands its business beyond Malaysian shores, with exciting new developments such as the Battersea Power Station project in London, Eco Sanctuary in Singapore and Parque Melbourne in Australia, it is also beginning to acquire a strong following amongst international property investors. 

The Proposed Acquisition therefore provides a unique opportunity for S P Setia to acquire a piece of prime freehold land at the very heart of Kuala Lumpur to build investment-grade commercial and residential products to suit the needs of this highly discerning and sophisticated clientele.  The estimated Gross Development Value of the proposed integrated commercial development on the Property, subject to the approval of the authorities for the proposed development and building plans, is approximately RM1.04 billion.

Friday 3 May 2013

DTZ: Market outlook favourable regardless of election outcome

VIBRANT: An expected more vibrant residential market post-election belies the fact that there are eight times more condo units coming up in 2013 than in 2012
on office capital and rental values.


A slow start to the year was seen with only two major transactions, namely the sale of The Icon (East Wing) of 267,907 sq ft NLA (Net Lettable Area) to Top Glove by TS Law Realty, at RM226 million (RM843 per sq ft) and the sale of a proposed office at PJ Sentral with NLA of 294,118 sq ft to MyIPO at RM250 million (RM850 per sq ft). Notwithstanding, Tun Razak Exchange (TRX), the new financial hub for the city is expected to boost the investment climate following its success 
in securing Aabar Investment PJS, an Abu Dhabi government-linked entity as a joint-venture partner, as part of a strategic initiative worth RM18 billion.
With an addition of 699,000 sq ft from two buildings, namely Menara CIMB Mapletree @ KL Sentral and Menara A of Glomac Damansara, the office stock stood at 68.1 million sq ft in Q1. Despite an increase in the office stock, the vacancy rate declined marginally to 15 per cent in Q1 from 16 per cent in the preceding quarter, as a result of the strong absorption led by the oil and gas sector and growth in other sectors such as finance, IT and telecommunication.

The potential oversupply of office space in Klang Valley shifts investors’ focus to opportunities in the retail sector, targeting the mid-market which is deemed as more resilient in the event of a downturn, as well as hotels to benefit from a still growing tourism sector driven by booming regional travel.on its proximity to the second Penang Bridge and is expected to become a major tourist attraction.

There were four completions in Q1 consisting of 1,442 condominium units. Another 4,240 units are expected throughout the remainder of 2013, compared to 784 units for the whole of 2012. The high number of completions will put some pressure on rental values, especially in the city centre.

The retail sector has enjoyed high occupancy rate and investment interest from major local and foreign companies in Q1 2013 while a vibrant residential market is expected in the second half of the year with many new launches, says DTZ Research.
In its latest report, the research house concludes that steady economic growth in Malaysia has inspired confidence in real estate investments, residential and retail sectors while oversupply in office space continues to exert downward pressure

Briefly, the report highlights the following:
• Investment activity slows with only two major transactions in Kuala Lumpur (KL) in Q1 2013. However, the Tun Razak Exchange and the upcoming listing of billion-ringgit KLCC REIT is anticipated to boost the investment climate in the coming months.
• Robust office occupancy rates in Q1 2013, but capital and rental values are at risk of downward pressure in the face of potential oversupply.

Investments to go up
Meanwhile, development opportunities in Iskandar Malaysia drew strong interest from investors and developers, which includes CapitaLand Ltd, a major Singapore developer. The recent announcement of a high speed train link between Singapore and Kuala Lumpur will further boost domestic sentiment.
The pending listing of the billion-ringgit KLCC REIT will help to boost investment volume in the coming months. Uncertainties arising from politics will be a short-term dampener and much of it is already factored into the market.
However, irrespective of the outcome of the general election, the market outlook remains favourable.

Oversupply of office
The higher occupancy rates of previously completed buildings such as Menara Darussalam, Menara Felda, Menara Worldwide and Integra Tower contributed to the decline of the vacancy rate. The two new buildings that were completed last quarter had also successfully achieved healthy occupancy rates due to high pre-letting rates.
Average prime office rent and capital value remained stable in Q1 at RM6.13 per sq ft per month and RM838 per sq ft respectively.
An anticipated 3.1 million sq ft of office space will be completed in the remainder of 2013 and another 4.3 million sq ft will be completed by 2014. This will exert downward pressure on both occupancy rates and rents.

Retail rules
Despite recording a 7.2 per cent per annum growth in household income in the last three years or an average of RM5,000 household income per month in 2012, consumers remained cautious of spending in view of a moderate employment market and an expected rise in inflation.
However, the retail industry is expected to continue to grow at an estimated 6 per cent for 2013, according to Retail Group Malaysia (RGM). Better sales performance is expected during Q1 2013 compared to the estimated 5.7 per cent in Q4 2012, boosted by the Chinese New Year and government hand-outs in the second round of the government’s Bantuan Rakyat 1Malaysia (BR1M).
RM100 cash each was given to five million students and RM250 1Malaysia Book Vouchers were given to all private and public university students and a RM200 rebate on smartphone purchases was given for eligible buyers.
Sustained by strong domestic demand, the Kuala Lumpur retail market remained resilient with an occupancy rate of 91.4 per cent . The stock stood at 23.5 million sq ft in Q1 2013 with no major completions registered in Kuala Lumpur since Q4 2011. Notwithstanding, two major malls are expected to be completed this year.
The retail sector continues to garner the interest of foreign and local investors. Lend Lease Group of Australia plans to expand its portfolio in the country, following the success of Setia City Mall in Shah Alam and the deal with Naza TTDI at KL Metropolis.
AEON acquired land in Shah Alam for its new store, after aggressively acquiring land in Penang, Johor, Kedah and Perak since 2010. A Premium Outlet is planned in Batu Kawan, Penang, capitalising
Meanwhile, the second phase of Johor Premium Outlet has received an overwhelming response from retailers. Uniqlo, a Japanese brand, is expanding its market to a strategic second-tier location with a store opening at Alamanda in Putrajaya.
Parkson Malaysia was recognised as the second most valuable retail brand in Southeast Asia by Interbrand, following its success in keeping up with shifts in preferences and expectations of consumers. Some malls, including Sungei Wang Plaza, under the portfolio of CapitaMalls, are undergoing refurbishment to stay relevant in the competitive retail market. Meanwhile, Giant Hypermarket in Subang Jaya has reopened with a significant makeover from a single-storey outlet to a three-storey shopping centre after a two-year closure for renovation.

Vibrant residential
Q1 2013 also saw the overall average price increasing marginally by 1.2 per cent q-o-q to RM678 per sq ft from RM670 per sq ft in Q4 2012, while the average rents remained relatively stable at RM3.60 per sq ft per month, similar to RM3.65 per sq ft per month in the previous quarter.
There were no new launches during Q1 as the housing market remained sluggish and developers remained cautious on new launches.
However, a vibrant market is expected in the second half of the year with many major planned developments such as Eco Business Park (Cheras), The Gateway@KL Bund (Setapak) and Menara Titiwangsa (Kuala Lumpur) by Ekovest Berhad. Other projects include The Mews by Eastern & Oriental Bhd, Star Residences by Symphony Life (formerly Bolton Bhd) and a 50-storey mixed development next to Pavilion by Urusharta Cemerlang Sdn Bhd.
There are also pending residential launches outside the city centre including Boulevard Business Park at Jalan Kuching (Magna Prima), VERVE Suites KL South along Old Klang Road (Albatha Bukit Kiara Holdings Sdn Bhd) and The Establishment in Bangsar by Keystone Land Developments Sdn Bhd.

Dijaya acquired Kota Kemuning land from Menteri Besar Selangor and Permodalan Negeri Selangor Berhad

PROPOSED ACQUISITION BY SAPPHIRE INDEX SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF DIJAYA, OF LEASEHOLD LAND MEASURING APPROXIMATELY 1,172 ACRES IN AN AREA PREVIOUSLY KNOWN AS “CANAL CITY” WITHIN THE VICINITY OF KOTA KEMUNING IN THE STATE OF SELANGOR

Dijaya had on 15 April 2013 entered into a sale and purchase cum development agreement (“Agreement”) with Menteri Besar Selangor (Pemerbadanan) (“MBI” or “Registered Owner”) and Permodalan Negeri Selangor Berhad (“PNSB” or “Beneficial Owner”) for the proposed acquisition cum development of eleven (11) parcels of leasehold lands, all in Mukim Tanjong Dua belas, District of Kuala Langat, State of Selangor, measuring approximately 4,743,986.21 square metres (51,064,516.80 square feet) (“Lands”) for a total cash consideration of RM1,297,259,264 (“Total Consideration”) 


The Total Consideration comprises the following:
(a) Purchase price for the Lands in the sum of RM587,000,000 (“Purchase Price”);
(b) Interest of 5% per annum calculated on a daily basis and compounded until payment of the Purchase Price of up to RM252,000,000, which is subject to waiver.
(c) Gross development value (“GDV”) and profit sharing totalling a minimum amount of RM458,259,264.


The Lands are located in the vicinity of established townships such as Kota Kemuning, Putra Heights as well as the up and coming Bandar Rimbayu with good accessibility, via four (4) major highways to other parts of the Klang Valley, including the Kuala Lumpur City Centre, Subang, Petaling Jaya, Damansara, Puchong and Shah Alam. In addition, with the completion of the West Coast Expressway (WCE), the accessibility of the Lands will be further enhanced.

The Lands are situated next to the proposed township development of Bandar Rimbayu by IJM Land Berhad spread over 1,879 acres, which experienced overwhelming interest in its recent launch. 

Dijaya Group is proposing to develop the Lands into an integrated self-contained townshipcomprising of amongst others, landed houses, condominiums, serviced apartments, shop offices, corporate office towers, shopping malls, private hospitals and international schools to meet the increasing demand for wholesome and balanced lifestyles to attract the middle and middle upper class income earners.

The Group is proposing to develop the Lands into a mixed development comprising of residential and commercial properties which is expected to commence in the second year following the unconditional date of the Agreement and span over a period of up to twenty (20) years. Based on the marketability and development potential of the surrounding areas of the Lands, management is expecting a GDV of at least RM8.6 billion for the Project.

The preliminary indicative development cost of the Project is estimated to range between 50% to 60% of GDV. However, the exact quantum of the development cost has not been determined at this juncture, pending finalisation of a detailed development plan for the Lands. The development of the Project is expected to be funded via internally-generated funds and/or bank borrowings. The final breakdown will be decided at a later stage taking into consideration the Group’s gearing level, interest costs as well as internal cash requirements for its businesses.

With the proposed development of the Lands over a period of up to twenty (20) years and a potential GDV of at least RM8.6 billion, the Proposed Acquisition will facilitate positive contributions to the Group’s future revenue stream and profitability.


Source Bursa Annoucement April 15, 2013

OSK Properties acquires land in Shah Alam

KUALA LUMPUR: OSK Properties Bhd (OSKP) has entered into a sale and purchase agreement with Kuala Dimensi Sdn Bhd for two parcels of leasehold commercial land in Bandar Shah Alam, Selangor, for RM15.2 million.

In a filing with Bursa Malaysia yesterday, OSKP said it is planning a commercial development comprising semi-furnished small-office-flexible-office units and two floors of commercial space.

The proposed development is expected to have an estimated GDV of RM190 million.

The acquisition was made through OSKP’s wholly owned subsidiary, Ribuan Ekuiti Sdn Bhd, and will be funded via internally generated funds and external borrowings.

This article first appeared in The Edge Financial Daily, on May 3 2013.

KL-Singapore high-speed rail to enhance growth of Iskandar


PETALING JAYA: The proposed Kuala Lumpur-Singapore high-speed rail link (HSR) will further boost the growth of Iskandar Malaysia in Johor and create more growth areas.

Malaysia Building Society Bhd (MBSB) senior vice-president of corporate business Nor Azam Taib told The Edge Financial Daily: “Since it was initiated six years ago, Iskandar Malaysia has received warm response for most new property launches from both local and foreign buyers.”

The completion of several catalytic projects in Iskandar sent strong signals to investors of the good growth prospects of the area. A recent investor is Kuok Brothers Sdn Bhd, which put in RM182 million.

The Johor property market is expected to remain bullish, driven by the growth of Iskandar in the years to come.
“Iskandar would not only enlarge the economic pie of Johor, but also enhance Malaysia’s strategic position as an investment destination in the Asean region,” said Nor Azam.

He added that there is growing international recognition of Iskandar as Malaysia’s future engine of growth as the KL-Singapore HSR will enhance connectivity between the two countries.

According to Kumar Tharmalingam, executive director of Sunway Bhd, with the travel time from KL to Singapore expected to be reduced to 90 minutes door-to-door via the HSR compared with the current four to five hours via road, more businesses are expected to explore opportunities in both countries.

“There will be a lot of businesses benefiting from the HSR, including financial services, real estate, and oil and gas companies located in Singapore.

There will also be more inter-migration of professionals between the two countries and more joint venture trading, manufacturing and services as talent flows from Singapore to Kuala Lumpur and vice versa,” said Kumar.
He added that the economic benefits to Malaysia will be exponential as investments move from Singapore to Malaysia. “Economic connectivity will push up the quality of life in Kuala Lumpur and parts of Malaysia as well as bring real benefits to both countries. The HSR will ease the pressure on living space in Singapore.”

Knight Frank Malaysia managing director Sarkunan Subramaniam expects more growth areas to emerge along the HSR’s proposed stops. As three of the stops will be within Iskandar, the region is expected to remain the one growth area in Malaysia to have three sub centres.

“Although Johor, as Malaysia’s biggest attraction for foreign investors in the future could be a long-term possibility, Selangor will be tough to beat as its infrastructure development is decades ahead,” said Sarkunan.

From January to March this year, Iskandar recorded RM5.06 billion in new investments with a cumulative committed investment from 2006 to end-March 2013 of RM111.37 billion. Property development contributed RM40.02 billion, comprising residential, retail and industrial products.

Nor Azam, Sarkunan and Kumar will be sharing their views at a panel discussion on “The impact of the KL-Singapore high-speed rail” at The Edge Investment Forum on Real Estate on May 11. The forum is sponsored by MBSB and supported by Sunway.

This article first appeared in The Edge Financial Daily, on May 3 2013.

DTZ: Sluggish market to pick up after GE13


KUALA LUMPUR: The uncertain political landscape has cast a shadow over the Malaysian property market although things should pick up after the 13th general election (GE13) on May 5, according to DTZ Research’s Property Times Kuala Lumpur 1Q2013 released on April 25.

The report looked at transactions and activities in investment, office, retail and residential markets in Kuala Lumpur.
One of the most significant developments early this year was 1Malaysia Development Bhd (1MDB), the master developer of Tun Razak Exchange, announcing it has secured a strategic partner for the city’s new financial hub in Aabar Investment PJS, an Abu Dhabi government-linked entity as part of an initiative worth RM18 billion, said DTZ.
However, the first quarter (1Q) overall saw slow investment activity with only two major transactions in Kuala Lumpur — The Icon (East Wing) with net lettable area (NLA) of 267,907 sq ft acquired by Top Glove Corp Bhd from TS Law Realty at RM842 psf and the proposed office building PJ Sentral (by Nusa Gapurna Development Sdn Bhd) with NLA of 294,118 sq ft to Intellectual Property Corp of Malaysia at RM850 psf.

Iskandar Malaysia in Johor continued to draw the interest of investors and developers such as Singapore’s CapitaLand Ltd.

“The announcement of a high-speed rail link between Singapore and Kuala Lumpur has further boosted domestic sentiment,” said DTZ.

Due to the potential oversupply in the office sector in the Klang Valley, investors are looking towards the retail sector with a focus on assets targeting the mid-market, which are deemed more resilient in the event of a downturn, as well as hotels to benefit from a still growing tourism sector driven by booming regional travel, it said.

DTZ is optimistic about the market post-GE13. It said: “The pending listing of the billion-ringgit KLCC Real Estate Investment Trust will hopefully boost investment volume in the coming months. Uncertainties arising from politics will be a short-term dampener and much of it is already factored into the market. However, irrespective of the outcome of the GE, the market outlook remains favourable.”

Office stock totalled 68.1 million sq ft in 1Q thanks to the addition of 699,000 sq ft from two buildings — Menara CIMB Mapletree@KL Sentral and Menara A in Glomac Damansara.

“Despite an increase in office stock, the vacancy rate declined marginally to 15% in 1Q from 16% in the preceding quarter, as a result of the strong absorption led by the oil and gas sector and growth in other sectors such as finance, IT and telecommunications,” DTZ said.

The two new buildings, which achieved healthy occupancy rates due to high pre-letting rates, and the occupancy of completed buildings such asMenara Darussalam, Menara Felda, Menara Worldwide and Integra Tower, contributed to the decline in the vacancy rate, DTZ said. All four buildings are located in the city centre.

“Average prime office rent and capital value remained stable in 1Q at RM6.13 psf per month and RM838 psf respectively,” DTZ said. “An anticipated 3.1 million sq ft of office space will be completed in the remainder of 2013 and another 4.3 million sq ft will be completed by 2014. This will exert downward pressure on both occupancy rates and rents.”

On the retail market, DTZ said it remains resilient with 91.4% occupancy rate, sustained by strong domestic demand. “The stock in Kuala Lumpur stood at 23.5 million sq ft with no major completion registered for six consecutive quarters since 4Q 2011.”

The sector continues to garner local and foreign investor interest. “Lend Lease Group of Australia is in discussions to invest in three development projects to expand its portfolio in Malaysia, following the success of Setia City Mall in Shah Alam and the deal of Naza TTDI’s KL Metropolis,” said DTZ.

“Aeon acquired land in Shah Alam for its new store after aggressively acquiring land in Penang, Johor, Kedah and Perak since 2010. Uniqlo is looking to open a store in Alamanda, Putrajaya, to reach shoppers that live away from the city centre,” DTZ added.

In Penang, a Premium Outlet is planned in Batu Kawan to take advantage of the second Penang bridge, and is expected to become a major tourist destination. Johor Premium Outlets is also capitalising on its popularity and is in the midst of Phase 2 expansion.

In the residential sector, four projects with a total of 1,442 condominium units were completed in 1Q. “Another 4,240 units are expected for the rest of the year, compared with 784 units for the whole of 2012,” said DTZ. This high number of completions will exert pressure on rental values, especially in the city centre.
The first quarter also saw overall average price rise 1.2% quarter-on-quarter to RM678 psf from RM670 psf in 4Q 2012, while the average rents remained relatively stable at RM3.60 psf per month from RM3.65 psf per month in the previous quarter.

DTZ said 1Q was sluggish with no new launches as developers remained cautious. However, this is set to change with a vibrant market expected in the second half of the year with many major planned developments such as Eco Business Park (Cheras), The Gateway@KL Bund (Setapak), and Menara Titiwangsa (KL) by Ekovest Bhd.

Other projects include The Mews by Eastern & Oriental Bhd, Star Residences by Symphony Life (formerly Bolton Bhd), and a 50-storey mixed development next to Pavilion by Urusharta Cemerlang Sdn Bhd.

“There are also pending residential launches outside the city centre including Boulevard Business Park at Jalan Kuching (Magna Prima Bhd), Verve Suites KL South along Old Klang Road (Albatha Bukit Kiara Holdings Sdn Bhd) and The Establishment in Bangsar (Keystone Land Developments Sdn Bhd),” said DTZ.

This article first appeared in The Edge Financial Daily, on May 3 2013.

Exsim to launch 11 projects in next three years

PETALING JAYA: Exsim Development Sdn Bhd plans to launch 11 new residential and industrial developments covering 90 acres (36.4ha) in the Klang Valley within the next three years.

Its head of property R&D (industrial) Vincent Chin told The Edge Financial Daily the company recently secured several parcels of land in the Klang Valley, bringing the group’s total undeveloped landbank to about 100 acres. He added that it is also in final discussions to acquire another six acres for industrial development in Balakong.

“We are still on the lookout for more landbank, especially larger tracts in the Klang Valley for a township development,” said marketing and corporate communications head Michelle Siew, adding that Exsim is also open to good joint venture opportunities.

Exsim recently signed a joint venture agreement with an individual landowner to develop a 50-acre leasehold site in Ijok, Sungai Buloh. It has also acquired a 10-acre freehold industrial tract in Meru Klang for RM20 million.

The Ijok project will comprise over 100 light industrial lots while plans for the Meru project are still being finalised. Both industrial projects are set to be launched by year-end.

Also expected to be launched this year are two condominium developments — The Petalz in Old Klang Road, and a yet to be named development in Jalan Tun Razak, Kuala Lumpur. The 3-acre The Petalz has a gross development value (GDV) of RM300 million while the 1.1-acre Jalan Tun Razak development has a GDV of RM170 million.

The developer launched the 2.7-acre Novelle Industrial Park Lot 8 in Kota Damansara and the 9-acre Novelle Industrial Park Balakong (NIPB) in early March. According to Chin, five out of the seven units in Lot 8 and 16 out of the 18 available units in NIPB have been snapped up.

The leasehold Nouvelle Lot 8 has a GDV of RM59 million and is Exsim’s fourth and final industrial development in Kota Damansara. The freehold NIPB project is a joint venture with Hai Ming Sdn Bhd, a subsidiary of KPS Consortium Bhd, and has a GDV of RM83 million.

The company’s first four projects were industrial lots under the Nouvelle banner — Nouvelle Kota Damansara (RM70 million GDV), Nouvelle Kemuning Business Park (RM65 million GDV) as well as Novelle Industrial Park 2 (RM55 million GDV) in Shah Alam, and Nouvelle Lot 10 (RM50 million GDV) in Kota Damansara. Prices for The Nouvelle Industrial Park have risen 30% to 40% from their initial launch price of RM 3.2 million in 2009.

Exsim’s residential projects include The Treez and Twin Arkz in Bukit Jalil and The Leafz in Sungai Besi. Prices at The Treez have appreciated by about 30% since its launch in 2010. In September 2012, the studio units at Twin Arkz set a new benchmark price of RM800 psf for such property in Bukit Jalil.

This article first appeared in The Edge Financial Daily, on May 3 2013.

4,000 PR1MA homes planned near LRT stops

Some 4,000 units of affordable homes will be built at several light rail transit (LRT) locations in the Klang Valley by Perumahan Rakyat 1Malaysia Bhd (PR1MA) and Syarikat Prasarana Negara Bhd (Prasarana).





The houses will be 20 per cent cheaper than the prevailing market prices for similar units in the respective areas, which range from RM100,000 to RM400,000.

The first phase will kick off by year-end comprising 2,000 units of apartments to be built in Pandan Jaya, Pandan Indah and Taman Cempaka.

It is expected to be completed within three years, PR1MA chief executive officer Datuk Abdul Mutalib Alias said at a press conference here yesterday.

He said the apartment units, which measure between 750 sq ft and 1,200 sq ft, will be available in 1+1 bedroom studio-plus and 3+1
bedroom versions.

Abdul Mutalib, however, declined to disclose the total gross development value of the project.

He said PR1MA and Prasarana will build apartments atop and next to the LRT stations, giving residents the convenience of having
direct access to the stations.

“We realise that high prices of homes, cars and fuel are the major financial burden faced by middle-income earners living in urban areas, hence, this project was introduced to address
this situation.

“This concept may be new in Malaysia, but not in other countries. In Hong Kong, for instance, development of apartments linked to LRT and MRT (mass transit railway) stations is very common,” he said.

Abdul Mutalib said PR1MA has received overwhelming response from the public for PR1MA homes, with more than 210,000 people
having registered as at end-2012.

“People in the Klang Valley topped the list of registered applicants, followed by Penang. We will continue our campaign to encourage more registration,” he said.

Prasarana group managing director Datuk Shahril Mokhtar said the stake held by PR1MA and Prasarana will differ in each project, but assured that the partnership will benefit both parties equally.

"We are still fine-tuning the joint-venture agreement. The share percentage will depend on each project. All I can say is that it will benefit both parties equally," Shahril said.

PR1MA is a government initiative to promote greater home ownership, especially among middle income earners, by providing more affordable homes in major cities.

Application for PR1MA homes is open to Malaysian citizens aged 21 years and above, who have individual or combined gross household income of between RM2,500 and RM7,500 a month.

Preference would be given to those living or working in surrounding areas of the projects. 

Interested buyers can register at www.pr1ma.com.my


Source Business Times By Muhammed Ahmad Hamdan, May 3, 2013 

Thursday 2 May 2013

I&P plans luxury residential towers

I&P Group Sdn Bhd is hoping that its strategy of building luxury residential towers will lead to better results for the company.


Its group managing director Datuk Jamaludin Osman said its first project, which is worth RM800 million, will be launched in Bandar Kinrara, Puchong, Selangor, this year.

I&P, a wholly-owned unit of Permodalan Nasional Bhd, has 13 ongoing township projects and around 2,000ha landbank in the Klang Valley and Johor Baru.

These include Bandar Baru Sri Petaling, TemasyaGlenmarie, Bandar Kinrara, Alam Impian and Alam Damai in the Klang Valley, and Taman Industri Jaya, Taman Rinting and Taman Perling in Johor.

The residential component in these townships have always focused on landed properties and affordable apartments.
For the new project in Bandar Kinrara, Jamaludin said it will comprise five serviced apartment blocks totalling 1,200 units. 

Speaking to Business Times in an interview recently, he said the company will be launching the first block, featuring 236 serviced apartments, within the next two months.

Each unit ranges from 642 square feett to 1,600 sq ft and will be priced at about RM650 per sq ft.

"This will be our first time embarking on high-rise luxury residential property projects. We are doing this to enhance the land value. We need better returns for a company that is growing," he said.

Jamaludin said besides Bandar Kinrara, the company will also be launching luxury serviced apartments in Bandar Baru Sri Petaling and Alam Damai. 

I&P was formed in 2009 after the rationalisation exercise of three companies, namely Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd.

For its fiscal year 2009, the company posted earnings of RM142.51 million on the back of RM1.07 billion revenue, translating into a profit margin of 13.28 per cent.

Last year, its revenue was around RM1.1 billion.

The company is expected to maintain that performance in the current year, Jamaludin said.

Source : Businss Times 30 April, 2013, By Sharen Kaur

Sunway REIT results in line with expectations


PETALING JAYA: Sunway Real Estate Investment Trust’s (REIT) recent financial results were largely in line with analysts’ expectations. They maintained their calls on the company.
In its report, Hong Leong Research said Sunway REIT’s third quarter 2013 normalised net profit rose 16.1% year-on-year to RM55.2mil, making up 75.4% and 79.4%, respectively, of its and consensus estimates.
In a filing with Bursa, the REIT manager said the distribution per unit for financial year ending June 30, 2013 was expected to be higher than financial year 2012, supported by growth in the retail sub-sector and interest savings from capital management initiatives.
Hong Leong, which is maintaining its “hold” call on the firm, said Sunway REIT was currently trading at 5.1% yield, which represented the lower boundary distribution yield in its view while the target price was maintained at RM1.49.
In its note to clients, HwangDBS Vickers Research, while maintaining its “buy” call on the company, said it had earlier assumed that Monash and Sunway University campuses would be injected in financial year 2014, but ongoing construction works on the assets and potential for the universities to pay out rentals (in line with rental growth) may delay the injection timeline.
As such, it is pushing back its injection assumption to financial year 2015.
In light of the softening office market beginning to impact Sunway REIT’s office assets, the research house has also assumed lower near-term rental reversions and occupancies (notably on Sunway Tower and Sunway Putra Tower).
The management has also forecast higher capital expenditure in fiscal 2014 of around RM300mil, which would be funded by debt, implying greater finance costs.
Sunway REIT closed at RM1.58 yesterday, down two sen.
Source : Star, May 3, 2013

OSK Property to build SOVOs and shops in Bandar Shah Alam


PETALING JAYA: OSK Property Holdings Bhd is buying two leasehold commercial land in Shah Alam from Kuala Dimensi Sdn Bhd for RM15.19mil.
OSK Property is acquiring via, unit Ribuan Ekuiti Sdn Bhd, the two land measuring 6,535 and 5,225 sq m, respectively, in Bandar Shah Alam.
Ribuan Ekuiti, which is principally involved in property development and property management, will pay RM151,900 upfront. The balance RM15.038mil will be paid within three months after the sale and purchase agreement becomes unconditional.
The acquisition will be 20% funded with internal funds and 80% with external borrowings. It is expected to be completed by the third quarter this year.
OSK Property plans to build a commercial development comprising 420 semi-furnished, small-office, flexible-office units, which include a 25,339 sq ft or two floors for retail shops. The development has an estimated gross development value of RM190mil.
OSK Property said it targeted to launch the development by the fourth quarter this year.
Source : Star May 3, 2013