Tuesday 23 July 2013

CentralPlaza development gets big boost

KUALA LUMPUR: I-Berhad and Central Pattana Pcl (CPN), Thailand’s largest retail developer, are all geared up to further boost the development of the CentralPlaza@i-City retail mall.

Both parties have executed a number of agreements for the joint development, ownership and management of the upcoming mall.

Under the joint venture, CPN will be responsible for the development and management of the mall while i-City will be responsible for the theme park and the development of other components of i-City.

According to I-Berhad deputy chairman Datuk Eu Hong Chew, the joint venture with CPN is a comprehensive arrangement, with two elements to be addressed.

Eu said firstly, the mall is another building block in making i-City a key tourism destination, in addition to the theme park and hotels. 

It will be able to offer a 24-hour leisure experience for the visitors when the mall opens in 2016.

"Secondly, the mall will be part of I-Berhad's investment property plans for i-City. As we already own the Data Centre and car parks, the mall will enable I-Berhad to have a diversified portfolio of investment properties," he said.

Eu said so far, I-Berhad has invested about RM75 million in the various rides and attractions for the theme park in i-City, which includes Red Carpet, Malaysia's first interactive wax museum.

"We expect to have invested RM100 million in the various theme park rides and attractions when the mall opens," he said.

Already attracting about 90,000 visitors a week, i-City expects to see a quantum leap in the number of visitors by the time the mall is completed. 

In fact, i-City is planning its next tourism component in the Clarke Quay@i-City - a riverfront leisure development with water-based attractions, fine dining and retail component.

"CPN has the first right to participate in the development of Clarke Quay @i-City," Eu said.
(Business Times, 23 July 2013)

DTZ: Property investment market turnaround in Q2

SINGAPORE: The Malaysian property market has gained stronger momentum after the 13th general elections (GE13), which saw a turnaround in the investment market in the second quarter of the year, says DTZ Research.

It said the overall office market was stable as both vacancy and rental rates remained unchanged with continued substantial supply in the pipeline. 

The research house also said the anticipated oversupply sentiment did not appear to affect the market as activities remained resilient and active, supported by stable rental and capital values.

Retail sales remained buoyant with continued local and international interest for investments in the sector.
It said the overall office market was stable as both vacancy and rental rates remained unchanged with continued substantial supply in the pipeline. 

The research house also said the anticipated oversupply sentiment did not appear to affect the market as activities remained resilient and active, supported by stable rental and capital values.

Retail sales remained buoyant with continued local and international interest for investments in the sector.
The research house also said the anticipated oversupply sentiment did not appear to affect the market as activities remained resilient and active, supported by stable rental and capital values. 

"Now that the GE13 is over, companies are starting to proceed with major investments, which may have been temporarily held back by political uncertainties.

"We can expect stronger momentum in government-linked mega projects such as the Tun Razak Exchange (TRX), where third-party investors and developers have been invited to participate, DTZ Research added.

The value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million comprising three deals in the first quarter, mostly in the office sector. Bernama
"Now that the GE13 is over, companies are starting to proceed with major investments, which may have been temporarily held back by political uncertainties.
"We can expect stronger momentum in government-linked mega projects such as the Tun Razak Exchange (TRX), where third-party investors and developers have been invited to participate, DTZ Research added.

The value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million comprising three deals in the first quarter, mostly in the office sector. Bernama
"We can expect stronger momentum in government-linked mega projects such as the Tun Razak Exchange (TRX), where third-party investors and developers have been invited to participate, DTZ Research added.
The value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million comprising three deals in the first quarter, mostly in the office sector. Bernama
The value of 12 deals recorded in the second quarter amounted to RM988.6 million compared with RM490.8 million comprising three deals in the first quarter, mostly in the office sector.

Business Times, 19 July 2013

Developers' eyes on 2 primetracts in KL (Ladang Batu land within Jalan Duta, Kiara Park)

KUALA LUMPUR: The potential opening up of two prime tracts of government land here will accentuate more opportunities for property developers.
Another plot situated within the Kiara Park area also attracts interest.

It was reported that the two pieces of prime land are the subject of a tussle involving various parties.

In the case of the Ladang Batu land, the courts declared Semantan Heights as owner of the 101.1ha late last year, following a 53-year tussle. 
Another plot situated within the Kiara Park area also attracts interest.
It was reported that the two pieces of prime land are the subject of a tussle involving various parties.

In the case of the Ladang Batu land, the courts declared Semantan Heights as owner of the 101.1ha late last year, following a 53-year tussle.
It was reported that the two pieces of prime land are the subject of a tussle involving various parties.In the case of the Ladang Batu land, the courts declared Semantan Heights as owner of the 101.1ha late last year, following a 53-year tussle.In the case of the Ladang Batu land, the courts declared Semantan Heights as owner of the 101.1ha late last year, following a 53-year tussle.

AmResearch said while there may be some legal ramifications involving the two plots of land, Bukit Kiara Resorts Bhd (BKRB) appears to have a foothold on the Bukit Kiara land.The 53.4ha within the Kiara Park area is leased to BKRB, a unit of Berjaya Land. BKRB's application for a development order for part of the land in return for surrendering 4.8ha to the City Hall hit a snag a fortnight ago.

"While there could be many permutations involved, we understand that 32.3ha could be opened for development, including 8ha that houses government complexes marked for demolition," AmResearch said.

AmResearch said its checks showed that many developers have been eyeing redevelopment opportunities at Ladang Batu land within Jalan Duta for quite a while.

(Business Times, 2 July 2013)

Monday 22 July 2013

YTL Land’s First Phase of The Fennel Sold Out in Two Days

Kuala Lumpur, July 20, 2013 (YTL Community annoucement)
The first two blocks of YTL Land & Development Bhd's The Fennel’s condominium tower units were sold out on day-two of its preview. The Fennel — previewed from Friday — had over 5,000 interested registrants.
The Fennel consists of 4 blocks of 38-storey condos situated at Sentul East with a total of 916 units ranging from 1000sf -1500sf. Its sharp angled iconic towers are interrupted by spacious sky terraces. Nestled in pairs, each tower is connected by a suspended 50m pool flowing from block to block.
YTL’s promise of quality branded homes with unique concepts and buyers’ confidence is Sentul saw a huge number of YTL valued buyers and registrants rushing to stake a claim in the units priced at RM700psf.
“People were queuing from 6.30am at the YTL Land’s sales office in Starhill Gallery. We expected a huge turnout based on how fast The Capers was snapped up at its launch, but the response for The Fennel is even greater!” said YTL Land & Development Berhad executive director Dato’ Yeoh Seok Kian.
The queue which started from the entrance of YTL Land’s Sales office snaked round the entire Relish floor at Starhill Gallery and early birds were thrilled at getting the first pick of the units.
“This is truly a testament that YTL has continued to sustain the interest of the market and buyers are recognising the strength of Sentul as KL’s next property hotspot,” Dato’ Yeoh added.
Contributing towards the transformation of Sentul under YTL's vision of urban renewal, The Fennel along with The Capers is set to alter Sentul's skyline, bringing a new lease of energy with its angled and wave like iconic design that takes inspiration from nature.
The Fennel is YTL Land's fourth residential project in Sentul after The Capers, The Tamarind and The Saffron, all situated in Sentul East.

Spectre of rising household debt

PETALING JAYA: Although the latest measures introduced by Bank Negara to rein in household debt would ensure a sound and sustainable household sector, more is needed to prevent debt from reaching alarming levels, said economists.
The household debt in Malaysia, which stands at about 83% of gross domestic product (GDP), is higher than many other countries in the region like the Philippines, Indonesia, Singapore, Hong Kong and Japan. If not prevented, it could put a damper on the country’s 5%-6% projected GDP growth this year.
RAM Holdings Bhd group chief economist Dr Yeah Kim Lengsaid he believes the latest measures, in combination with the earlier ones, would have the cumulative, albeit modest and gradual, effect of crimping household debt.
The latest measures would help to moderate the increase in total household debt, as the earlier responsible lending guidelines introduced last year have only had a marginal impact on slowing down the rise in total household debt to 13.0% in 2012 from 13.4% in 2011.
Certain measures, therefore, have to be in place in combination with the existing ones to ensure the soundness and sustainability of the household sector. “The loan-to-value (LTV), currently at 70% for the third housing loan, and debt-to-income net of all other borrowing measures, could be further tightened. For instance, the 70% LTV could be lowered or applied to the second or first loan, while the debt-to-income could be lowered to 30% instead of 50% of monthly net income,’’ he told StarBiz.
In addition, he said the net income could be defined more stringently to include other obligations of the borrower. To rein in excessive property price increases that have contributed to rising property loan demand, the real property gains tax (RPGT) could be further raised to curb speculative activities, he added.
Other complementary measures needed include efforts to boost housing supply and containing construction cost increases, he said, adding that more blunt monetary measures such as raising the overnight policy rate or banks’ reserve requirements could be applied if the macro-prudential measures applied thus far prove inadequate to contain household debt build-up.
The latest measures by the central bank to curb household debt include imposing a maximum tenure of 10 years for the repayment of personal loans and a maximum of 35 years for property loans, and prohibiting the offering of pre-approved personal financing products.
Apart from this, key credit providers are required to observe prudent debt service ratios in their credit assessment to ensure households have sufficient buffers to protect them against rising costs and unexpected adverse events. The bank’s new measures also bring some of the lending practices at development financial institutions and non-bank financial institutions (NBFIs) in line with those of conventional banks.
Malaysian Rating Corporation Bhd chief economist Nor Zahidi Alias said more measures were needed to curb speculative activities. “Implementing more measures to curb speculative activities in the property market can be positive. This may include a lower LTV ratio for third property purchases, higher stamp duty for property transactions and higher RPGT. All these would help curb speculative activities,’’ he noted.
He said the latest measures by the central bank were positive in view of the serious level of household debt in the country. The growth in personal financing has been robust in the past several years, especially among NBFIs, he said, adding that NBFIs had collectively extended 57% of personal financing credit to households in 2012.
Zahidi said no doubt they are secured by automatic salary deductions (for civil servants), but the rapid surge in the amount of personal financing extended to households would pose some sort of risk to the economy through a possible decline in private consumption in the event of a serious downturn.
He foresees the household debt level beginning to stabilise next year should the new measures begin to take effect in controlling the growth in personal financing. He said no doubt there was still a sizeable amount of loans related to mortgages, but at least, they were backed by underlying assets.
In a recent report, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz noted that housing loans formed the bulk of Malaysia’s household debt at 44.5%, while 16.8% were personal loans.
(The Star, July 22)

UEM Sunrise to fully develop Mont Kiara landbank within eight years

KUALA LUMPURL: Property developer, UEM Sunrise Bhd, is aiming to fully develop its 36.42 hectares (90 acres) landbank in Mont Kiara within eight years, said its Chief Marketing Officer, Siti Mariam Mohd Desa.
"At the moment, we have not really thought out in detail, the sort of development for that prime land. We will look at the market (demand) and are not in rush to develop it," she told press conference on an update to the company's Arcoris Mont'Kiara project here today.
She said due to its strategic location and easy accessibility, the company also planned to expand the landbank in the related areas.
To date, UEM Sunrise, the master developer of Nusajaya, has a landbank of 4046.85 hectares (10,000 acres)in Peninsular Malaysia.
Arcoris Mont'Kiara, a mixed-use commercial high rise development project, comprises business suites, small office home offices (SoHo), service residences, a retail plaza and boutique hotel.
Providing an update on the sales progress, Siti said the business suites had been fully sold, residences at 95% and 70% for the SoHo. The retail plaza and hotel are not for sale.
The company is currently looking for suitable food and beverage tenants, as well as potential hotel operators, to run the 275-room boutique hotel.
The projected RM1bil gross development value project is targeted to be fully complete by the first quarter of 2016. - Bernama (19 July 2013)

New lease of life for ageing buildings

There are a few things you can do to an ageing building: abandon it, live with it, knock it down or redevelop it to adapt to the times.
In space-hungry cities, the first option is rarely the solution. On the contrary, the scramble for a central location means that developers are willing to buy old buildings and rebuild it higher.
As developers build taller structures, should they also be building to last?
Ranhill Bersekutu mechanical services deputy director Arvind Menon notes the importance of building adaptability.
In his presentation at the Veritas Design Group seminar on tall buildings recently, he speaks of the need for foresight, to build for future use rather than only current needs.
“A building can stand indefinitely if it is maintained and or rebuilt as required,” he tells StarBizWeek. “Iconic towers such as the Chrysler building, over 83 years old, have remained functional.”
In a building’s life span, he says, the way it is used, viewed aesthetically and its adaptability towards technology ensures its survival.
“Great buildings and iconic structures can revive its surroundings when they are upgraded,” he says.
He gives a local example of the old Empire Tower which is now the landmark Intermark.
Arvind believes that all buildings regardless of usage should consider the provision to adapt for the future, although this is more so for commercial developments.
“Adaptability would be more important in commercial high rise than residential as residential developments have a fixed usage with residential amenities. Commercial building are usually built with higher floor-to-floor heights, which allows them to be converted to residential if necessary,” he says.
That said, there is no denying that the cost to maintain a building will also eventually exceed its functional value. However, a well-designed building with sufficient room for expansion would delay this eventuality.
Arvind points out that there have been few buildings in Malaysia that have “lived out” their life expectancy, unable to cater to the needs of the current times. The Pekeliling Flats and Wisma Angkasaraya are some examples.
“Both have been demolished to bring forth new development, but similarly there are also buildings, like the Empire Tower, which have had a new lease of life through new technology and risers,” he shares.
Under Ranhill’s portfolio, Arvind notes that its recently completed project, Menara Binjai, has provision for vertical and horizontal services expansion, “allowing the building to meet its tenant needs now and in the near future” as a land-scarce city continues to expand upwards.
As Veritas CEO David Mizan Hashim puts it: “We should embrace this evolving urban paradigm (building higher) that offers humanity the promise of an energy-efficient ecosystem wherein populations have migrated to dense and tall cities.”
The Star July, 13

Sime Darby's City of Elmina sees near 100% take up

KUALA LUMPUR: Sime Darby Property’s latest development, City of Elmina saw a near 100% take up during its soft launch which involved 255 units of double-storey link houses valued at RM188.18mil.
Chief operating officer Datuk Wahab Maskan said the township provided buyers with a balanced lifestyle where it boasts a 300-acre parkland that is an extension of the existing 2,700-acre forest reserve adjacent to the township.
“The township will also feature, amongst others, a 70-kilometer cycling track, a well-marked marathon-distance (42km) jogging track and a wellness cluster of retail shops, facilities and amenities centered on health and well-being.
“In addition, safety and security of our residents will also be a priority and have been incorporated from the design stage of this township,” he added.
Sime Darby said the industrial component within City of Elmina had also been well received where the group recently saw all 51 vacant lots amounting to 95.46 acres with a sales value of RM370.07mil being completely taken up.
The group added it is planning to unveil the next phase of homes in the existing township in the fourth quarter of 2013.
The township is a part of the Selangor Vision City, where the entire Guthrie Corridor is set to be the growth center and catalyst within Greater Kuala Lumpur and Klang Valley.
(The Star, July 10)

Mah Sing CIMB’s top property pick, drawing interest abroad

KUALA LUMPUR: CIMB has singled out the Mah Sing Groupas its top property pick, rating it Outperform while maintaining a target price of RM3.48 (the stock opened at RM2.49 on Wednesday, July 10).
It said the group’s strong earnings growth, new sales and landbanking efforts should provide re-rating catalysts, advising investors to continue to accumulate Mah Sing because “the group offers the best exposure to a pure Malaysian property play, backed by an excellent track record for execution and aggressive growth”.
CIMB reported that it had taken Mah Sing’s management on a “non-deal road show” to London, Edinburgh and Paris the week before to meet with investors keen to the latest in the Malaysian property market.
“There were no major surprises from the meetings as we have followed Mah Sing's progress closely. We believe investors were impressed with Mah Sing's strong performance over the years and its lofty ambitions which are tempered by carefully calculated moves,” it said.
Explaining that the group started as a plastic injection moulding company that expanded into the property business, it said Mah Sing retained one aspect of its original manufacturing culture – a relatively asset-light and quick-turnaround business model.
Mah Sing, in its meetings with the prospective investors, said it was most optimistic about the Klang Valley in light of the major infrastructure projects like the MRT and high-speed rail which will improve accessibility.
It said it was a bit more cautious about the prospects forIskandar Malaysia and was worried about a situation of potential oversupply several years down the road, especially when some high-end condos come onstream.
The group acquired four parcels of land this year, including two in Kuala Lumpur and Iskandar Malaysia, Johor for RM438.35 million, and is eyeing more landbank in the Klang Valley, with sizes ranging from 100-700 acres for township-oriented landbank.
“It is one of the few developers with exposure to all major property markets in Malaysia, i.e. the Klang Valley, Johor, Penang and Sabah. We share management's positive view on the Klang Valley in light of the Greater Kuala Lumpur Transformation Programme.
“We are more optimistic than Mah Sing on the longer-term potential of Iskandar Malaysia. We like Penang for its heritage status and the imminent completion of the second Penang Bridge, while Sabah can no longer be ignored as it has enjoyed some of the strongest residential price appreciation over the past 10 years. Mah Sing remains our top pick in the property sector,” CIMB concluded.
(The Star, July 10)

Buyers snap up Sunway Geo Phase 2

KUALA LUMPUR: Sunway Integrated Properties reported an overwhelming response to the soft launch of Phase 2 of its Sunway Geo development last week, recording a take-up rate of 70%.
Phase 2 which makes up a gross development value (GDV) of RM452mil of the RM1.5bil total GDV, comprising almost six acres of the entire 23.4 acre Sunway Geo integrated development, consists of 46 units of retail shops and 228 flexi suites.
The enthusiastic response follows the successful launch last year of Phase 1, now fully sold. The entire Sunway Geo development consists of shops, flexi suites, urban suites and residences.
Sarena Cheah, joint managing director of the property development division, Sunway Berhad, said the seamless connectivity to Sunway Resort City (SRC) was one of the reasons for its success.  
“Sunway Geo is well-positioned along the education and healthcare precincts while being seamlessly connected through the other five components of the SRC, namely retail, residences, offices, hospitality and leisure through canopied walkways and the elevated Bus Rapid Transit-Sunway Line.
The development also enjoys great accessibility to and from the rest of Klang Valley by a comprehensive network of road and rail. Also the ready catchment of 500,000 population within Bandar Sunway and Subang Jaya including 50,000 students coupled with the 40 million visitations per annum attests to the success of the development,” she said. 
The BRT-Sunway Line, lauded for its potential to transform the landscape of the SRC and boost of property values in the area, will have a stop right in front of the development. The BRT Sunway Line connects SRC to the Setia Jaya KTM Komuter station and the upcoming light rail transit (LRT) station at USJ, Subang Jay
(The Star, 9 July 2013)

Sunday 7 July 2013

BNM Implements Measures To Curb Rising Household Debt

KUALA LUMPUR, July 5 (Bernama) -- Bank Negara Malaysia (BNM) is implementing a set of measures, effective immediately, to curb the rising trend of household indebtedness and to reinforce responsible lending practices by key credit providers.


Governor Tan Sri Dr Zeti Akhtar Aziz said the measures were limiting maximum tenure of personal loans to 10 years and properties financing to 35 years, and prohibition on the offering of pre-approved personal financing products.

Also included was the setting of prudent debt service ratio that allowed sufficient buffer to deal with income volatility and other costs, she said.

Zeti said as of March this year, the ratio of household debt to gross domestic product (GDP) in Malaysia grew by 13 per cent to 83 per cent from 70 per cent in 2009, the highest level for developing countries in Asia.

"Given that the economy is now growing in the range of four to six per cent, we believe this level of indebtedness is not sustainable and that is why we are introducing these measures," she told a media briefing here Friday.

She said compared household debt to GDP in other developing Asian countries, Thailand stood at 30 per cent, Indonesia 15.8 per cent, Hong Kong 58 per cent, Taiwan 82 per cent, Japan 75 per cent and Singapore 67 per cent.

Zeti said the countries that have higher household debt to GDP were the US at 91.7 per cent, Australia 113 per cent, New Zealand 91 per cent, UK 114 per cent and South Korea 91 per cent.

The governor said central bank was putting in place responsible borrowing lending practices and prudent borrowing behaviour by the household sector.

She said the measures were aimed at ensuring a more sustainable household sector over the medium term, and gave an assurance that the sector contribute to growth of Malaysian economy in a sustainable manner.

"We decided to focus on household sector for these measures, so that there will be no confusion in the outcome that we want to achieve, which is sustainability of the household sector because it is such an important driver to our economy," she said.

Zeti said one of the factors contributing to the higher pace of household debt was the rising trend of personal loans which increased at an annual average rate of 20 per cent.

She said the rising role of non-bank financial institutions, which were supplying nearly 60 per cent of the personal financing to the households, was also a contributing factor.

"Of the total financing, 16.9 per cent are personal financing. In terms of growth rate of personal financing by non-bank financial institutions, last year it grew 29 per cent compared to the banks which grew 9.1 per cent.

"Aggressive competition in personal financing market has also contributed to lower financing rate that are not reflective of the associated risk," she said.

On the lengthy loan period, she said, while the longer tenure might reduce the monthly repayment, in the long run it will increase the overall debt burden of households.

Using housing loans as example, she said: "The tenure of housing financing has been lengthened to 45 years, though the monthly installment might be lower, but in the end it will cost 20 per cent more."

She added that such a practice encouraged excessive debt accumulation by households and increased the vulnerability of the sector.

Zeti said BNM has also urged financial institutions to give greater emphasise on affordability assessment as compared to repayment history and collateral which largely dominated the lending decision even when affordability assessment indicated potential future vulnerability.

"The affordability assessment is still not as robust as what we want to see.

"Our recent supervisory review of financial institutions' compliance with the guidelines are falling short of expectations, in a number of respect, resulting in lending decisions that are inconsistent with the obligation to ensure that financial products offered are affordable," she said.

Complementing the responsible lending guideline which was issued last year, the new measures applied to all financial institutions regulated by BNM, credit cooperatives regulated by the Suruhanjaya Koperasi Malaysia, Malaysia Building Society Bhd and Aeon Credit Services (M) Bhd, she said.

She said the limits on financing tenure will not affect applications made before today.

Extracted from BERNAMA, July 5, 2013