Friday, 28 June 2013

UOA buys Jln Ipoh land for RM130mil for mixed development project

PETALING JAYA: UOA Development Bhd has bought six parcels of land or 11.1 acres at Jalan Ipoh in Kuala Lumpur for RM130.3mil, with plans for an integrated mixed development. With the acquisition, the company said in a filing that it would collectively own approximately 28 acres of prime land in the said location, and was expected to commence development of the land next year.
However, development cost for the project have yet to be ascertained, pending the finalisation of detailed development plans.
It said the development will be highly accessible via major highways such as Duta-Ulu Klang Expressway (Duke) and Jalan Kuching.
In addition, it said the location was surrounded by densely populated residential areas such as Taman Kok Lian, Taman Impian, Taman Sri Kuching and Taman Rainbow.
The company said the transaction was done via its unit Tiarawoods Sdn Bhd with vendor Ng Kim Khin@Ng Beh Leow.
The land totalling 483,322 square feet is free from encumbrances except for some tenants who are currently occupying Lot 950 and Lot 4052.
To deliver the land to UOA, Tiarawoods will eject the squatters on Lot 950 and terminate a use of way.
Source The Star, June 27, 2013

Analyst: DIBS curb would have little effect on banks

y Maybank Investment Bank Research
It has been speculated that Bank Negara is studying the risks arising from DIBS with a view of potentially imposing curbs on it.
ASSUMING the developer interest bearing scheme (DIBS) is curbed, we estimate the worst case scenario to be a marginal 0.7 percentage points (ppt) shave off our 2014 industry loan growth forecast of 10.5% to 9.8%.
We believe domestic banks have been more tempered in their exposure to the mortgage segment and channel checks point to limited exposure at this stage. We maintain our industry loan and earnings forecasts for the individual banks for now.
Speculation has it that Bank Negara is looking to curb the DIBS. General guidance is that such loans have made up 15%-20% of new mortgage loans over the past few years and thus some dampening effect is to be expected.
Nevertheless, we believe the impact is likely to be contained by the fact that housing loan growth of the Big 6 banks has been measured and such loans account for less than 5% of total residential loans for the big banks.
Assuming DIBS loans account for 20% of new mortgage loans, we estimate the worst case impact to be a marginal 0.7-ppt decline in our 2014 industry loan growth forecast to 9.8% from 10.5%.
While industry housing loan growth rose 13% year-on-year (y-o-y) in 2011 and 2012 respectively, housing loan growth for the Big 6 banks rose 14% y-o-y in 2011 and at a more measured pace of 10% y-o-y in 2012, with foreign banks picking up the slack in 2012.
Public Bank continues to be the most aggressive in the market, with growth of 17% y-o-y in 2012, but with stringent controls, we understand that DIBS loans make up less than 2% of its mortgage book and that it has been very selective about which developers it ties up with for this scheme.
Based on our channel checks, AMMB (2-year housing loan compounded annual growth rate of 6%) has shied away from the property sector for several years while DIBS loans account for about 1%, 2% and 5% of CIMB’s, Maybank’s and RHB Cap’s mortgage books respectively.
Any move to curb the DIBS would be aimed primarily at further curbing speculative activity in the property market. To be fair, measures to date such as the raising of the loan-to-value (LTV) ratio in 2010 and a hike in real property gains tax in January 2013 have had some success.
Bank Negara had highlighted in its 2012 Financial Stability and Payment Systems Report that ever since the imposition of a LTV ratio of 70% on individuals with more than two housing loans, the annual growth in lending to such individuals had declined sharply to 14.5% y-o-y in November 2010 to 1.9% y-o-y in December 2012.
Individuals with multiple housing loans made up less than 3% of total housing loan borrowers and their borrowings accounted for 13.7% of outstanding housing loans.
Source : Maybank Investment Research, June 27, 2013

Selangor Properties delayed launches but earned from land acquisition

PETALING JAYA: Selangor Properties Bhd’s net profit for the second quarter ended April 30, 2013 fell almost 40% to RM6.83mil from RM11.3mil in the same quarter last year.
However, it said in its filing to Bursa Malaysia that revenue for the quarter improved marginally to RM60.76mil from RM59.33mil a year ago.
In the group’s property investment holding segment, it achieved a higher profit compared with a year ago amounting to RM5.7mil, due to profit from compulsory land acquisition.
Meanwhile, the delay in new property development launches resulted in lower revenue and has incurred some losses.
The education segment also reported lower revenue and profits due to a decrease in classes conducted during the festive and holiday period, as well as lower enrolment by international students.
However, the group’s Australian operations posted a profit of RM17.7mil compared with a loss of RM1.4mil a year ago. “Higher gain in the current quarter was due to a revaluation surplus of RM19.8mil from Claremont Quarters.
The main income is from the rental of Claremont Quarters and its current occupancy remains high at 98.5%,” it said in a statement.
The group expects the property investment and education segments to remain stable and continue to contribute positively to the group.
Source The Star, 28 June 2013