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.

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.