Saturday, June 30, 2007

Ample choice for buyers

Ample choice for buyers

By THE EDGE

The growing supply of new homes in Johor Baru is putting pressure on the values of houses on the secondary market. According to latest government data, as at end-2006, the existing supply of residential homes in Johor stood at 607,497 units (350,438 located in JB). In the same period, the state's incoming supply numbered 72,190 units (46,685 in JB) while planned supply totalled 133,316 units (91,710 in JB).

The secondary market for houses in JB has not been very exciting over the last year and this is reflected in the sampling for The Edge/KGV Lambert Smith Hampton JB Housing Property Monitor. The sampling shows that secondary housing property prices have not improved since 2001. In fact, in some of the areas sampled, values have dipped by as much as 26% in the last six years. Apart from houses on the Kempas Corridor, property prices elsewhere are rather flattish, observes Samuel Tan, director of KGV Lambert Smith Hampton JB.

He attributed this to the ample choice before buyers. The new houses are competitively priced, come with better designs and added freebies, says Tan when presenting The Edge/KGV Lambert Smith Hampton JB Housing Property Monitor for January–March 2007.
Sampling for the monitor shows prices for standard 1-storey terraced houses in Taman Daya have dropped by 24.3% and 26.5% in Taman Johor Jaya over the last six years. Meanwhile, 2-storey terraced homes in Taman Perling and Taman Daya dipped by 25% for the same period. Other areas that saw a significant drop in prices include 1-storey terraced houses in Taman Sutera (18.3%) and Bandar Baru Permas Jaya, which recorded a drop of 18.9% for 1-storey terraced houses and 19.2% for 2-storey terraced houses. The rental market also exhibited similar trends.

On the primary market, Tan says JB will be the place to watch over the next few years, with projects expected under the Ninth Malaysia Plan (9MP) and the Iskandar Development Region (IDR). He adds however that many quarters remain cautiously positive over the initiatives. He feels that any impact by the IDR and 9MP will only be gradually felt from the second quarter onwards.

Even though the secondary market is bound to be affected at first glance, Tan says the ready houses in older schemes may serve as an advantage as well. "JB city should see an increase in population, with people coming in to work in industries spurred by the IDR. Some of these people will be looking for ready housing. If homes in older schemes can find tenants, then they will become more tradable again," he offers.

Although the latest National Property Information Centre (Napic) Property Market Status Report (for 4Q2006) shows Johor having the highest number of surplus units in the country — 8,215 units or 32% of the nationwide market share — some developers remain upbeat about JB. Among them, notes Tan, are Scientex Bhd and SP Setia Bhd. The former has acquired about 250 acres in Sedenak, while the latter purchased 949 acres near Bandar Nusajaya. Scientex is planning a mixed housing development that will be launched early next year, while SP Setia has entered into a joint venture with Topasia Projects Sdn Bhd to develop an eco-themed township.
Based on Napic's report, the value of unsold units in Johor stands at RM1.43 billion, with the district of Johor Baru itself accounting for 77.5% (6,366 units) of the unsold units in the state. Most of these units (87.5%) had been on the market for more than 24 months. Two to 3-terraced and 1-storey terraced units formed the bulk of the overhang, with each type contributing 36% (2,957 units) and 16.5% (1,359 units), respectively.

Tan says developers are taking steps to avoid any overhang, by going for small launches with reasonable pricing. "Developers try to find their own niche market by targeting different segments that include upgraders, first-time house buyers or those looking for gated and guarded living."

He adds that in recent years, property development in JB has turned into a playground for the "bigger" developers. These are those who have the financial capacity to withstand slower sales and by default, enter into a "build-then-sell" arrangement.

So who's buying?

With so many new offerings, who and where are the buyers coming from? Tan observes that they are mostly buyers who appreciate contemporary designs and well-planned environments. "Many are Malaysians working in Singapore. The other group is made up of purchasers who want to improve their lifestyle by upgrading to a larger house," he notes.

The incentives and support packages (ISP) for investment in the IDR are expected to draw foreign investors into the state. A significant increase in interest from investors has been noted since the launching of the IDR last November, says Tan. The inflow of investment, especially in the industrial sector, will generate employment opportunities and in turn demand for housing. Tan says developers, especially those without any presence in the IDR, have shown interest in acquiring landbank to capitalise on the potential of this region.

On infrastructure, Tan points out that the government has approved the construction of the Eastern Dispersal Link. This highway will connect the present North-South Expressway (NSE) Interchange at Pandan to the new customs, immigration and quarantine complex (CIQ). It will run along Sungei Tebrau towards Kampung Bakar Batu and thereafter link to the CIQ along Jalan Pasir Pelangi. When completed, the highway will reduce travelling time from the NSE to the city centre, promoting the development potential of lands along the highway. Among the beneficiaries would be Tebrau Teguh Bhd and other land owners in the region.

"The 'feel-good' factor generated from the stock market will also trickle down to the property market. Since November last year, the stock market has been moving northwards. Many could have reaped profits and reinvested them in the property market," observes Tan.

New offerings

One of the more interesting launches in the JB market is Horizon Hills in Bandar Nusajaya, says Tan. The project was launched in March after months of publicity. A joint venture between UEM Land Sdn Bhd and Gamuda Bhd, the 1,200-acre freehold tract will offer mixed housing coupled with an 18-hole, 200-acre golf course. The design concept is based on clusters or precincts with 12 design themes that will incorporate lakes with islands and a 2km canal system.

Under its maiden launch, the developer offered for sale 250 units comprising 2-storey terraced homes, 2 and 2½-storey cluster homes and semidees. Built-ups start at 1,845 sq ft onwards, with tags starting from RM245,000 or an average of RM132 psf. Tan expects the project's marketability to be enhanced once the proposed western coastal highway linking Danga Bay to the new administrative centre is completed as this runs along the southern boundary of the project.

Travelling time to the city centre will then be shortened considerably.
Another new launch nearby is Taman Amyra located on a 35-acre site adjacent to Taman Perling. The gated project comprises 210 units of 2-storey semidees and 17 bungalows. Built-ups start from 2,850 sq ft and prices from RM403,800 for the semidees. For the bungalows with built-ups of 4,800 sq ft onwards, these are priced from RM798,000.

Over at the Kempas Corridor, Johor Land Bhd unveiled the 1,400-acre Bandar Dato' Onn. The initial launch in February saw several types of terraced houses launched. Built-ups start from 1,608 sq ft and these are priced from RM209,000. The construction of a link road connecting the Kempas Highway to the project has enhanced its accessibility. The opening of the link has also benefited other housing schemes such as Taman Sri Austin, Taman Adda Heights, Taman Daya and Taman Setia Indah. Tan says all the schemes reported better performance since the opening of the link.

In Taman Adda Heights, the developer reported a pick-up in sales, especially in March. At press time, only 11 out of 172 units of 2-storey cluster houses remain unsold. Prices range from RM278,000 to RM298,000 for the units with built-ups of between 2,048 and 2,200 sq ft. According to Tan, the developer is considering the build-then-sell concept for future launches.

Another scheme that reported good performance for the quarter under review was SP Setia's Taman Setia Tropika. A new interchange from the Kempas Highway costing RM18 million was completed during the period. The developer increased the prices for residential units by RM5,000 to RM7,000 per unit, while shopoffices by RM10,000 to RM30,000 each. The sale rate is about 80%, says Tan.

On Feb 14, SP Setia announced that Aeon will open its flagship shopping centre in Taman Bukit Indah. The mall, sitting on 37 acres of commercial land, is expected to be operational by end-2008. The convenience of shopping and entertainment brought by this mall will have a positive impact on demand for houses in the region. Apart from Taman Bukit Indah, the other schemes that will enjoy a spillover effect from this development are Taman Perling, Taman Nusa Bestari, Taman Nusa Indah and Taman Nusa Idaman, says Tan.

Over in Taman Nusa Idaman, 224 houses were launched with prices starting from RM149,000 for 1-storey terraced houses, RM239,000 for 2-storey terraced houses and RM397,000 onwards for semidees. In Taman Molek, the Berinda Group launched 26 units of super 2-storey semidees with a land area of 50ft by 100ft and built-up of 3,900 sq ft. Prices start from RM868,000. More than 30% of these units were reportedly sold since their launch in January. A stronger take-up rate was noted towards the end of March, says Tan.

Taman Austin Perdana by Mah Sing Group relaunched its 2-storey deluxe terraced houses priced at between RM277,556 and RM317,556. The developer has reported an average take-up rate of 70% since the initial launch in end-2004.

Country View project to gain from IDR

Country View project to gain from IDR


By THE STAR


JOHOR BARU: Country View Bhd sees the Iskandar Development Region (IDR) creating a chain of economic opportunities for many businesses, including property developers.

Marketing manager Andrew Tan said the opportunities would come from the multi-billion ringgit development activities expected to take place up to 2025.

Tan said the property market would benefit from the IDR with demand for residential and commercial properties in the area likely to go up in the next few years.

The IDR covers 2,217 sq km from Senai-Kulai in the north, Gelang Patah-Pontian in the south-west and Pasir Gudang-Tanjung Langsat in the south-east of the state.


Andrew Tan
“Nusajaya is the key element in the IDR and in fact, in the last nine years developers had already started projects within the development circle despite the uncertainty over whether the IDR would take off,” Tan told StarBiz recently.

Tan said the company was currently developing its Nusa Indah property project in Nusajaya, comprising some 1,000 units of double-storey terrace houses and double-storey shop houses on 120 acres.

“The take-up rate for the project is good, including from Singaporeans due to its close proximity to the second link crossing,” he said.

Tan said visitors going to the State New Administrative Centre in Nusajaya would have to pass through Nusa Indah via a new linkroad, adding that the on-going housing projects by more than 10 developers in the area would further boost demand for properties there.

The company will be launching its 12 high-end bungalow houses on two acres in Jalan Straits View by the end of the year.

He said the project, billed as the last piece of residential development located on a prime land in Johor Baru, is about 3 km from the city centre and the causeway.

Tan said the company was also looking at the possibility of buying land for industrial development as demand for industrial properties within the IDR was expected to grow.

Malaysian tycoons in talks to invest in Iskandar region

Malaysian tycoons in talks to invest in Iskandar region


By BUSINESS TIMES


A GROUP of local tycoons are in talks with Khazanah Nasional Bhd to develop a large piece of land in the Iskandar Development Region (IDR), a special economic zone in Johor.

Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) president, Tan Sri Williem Cheng, said a consortium has been formed to negotiate the development plan for a proposed project.


According to Cheng, Khazanah will allocate some 405 to 810 hectares of landbank to the consortium.


The group will then decide on the project, which may comprise service apartments and houses, shopping centres, hospitals, universities, schools, and a logistics hub.


"It will take six months to finalise the development plan and we expect the project to kick off early next year," Cheng told reporters after attending the Golden Bull Award 2007 ceremony in Petaling Jaya yesterday.


The IDR, an area almost three times the size of Singapore, is being promoted as a special economic zone in south Johor, and set to attract billions of ringgit in fresh investments.


Cheng said a group of investors from the Middle East and a consortium from Europe had been recently invited by the Government to invest in the IDR.


"Khazanah has allocated up to 810 hectares of landbank to each group to develop a project. They are currently negotiating the development plan," Cheng said.


He said the two groups are planning to build properties in the education, medical and logistics centre of the IDR and are expected to commence work early next year.


Cheng said the local consortium could buy the land from the State Government, or it may buy it from the private sector or the IDR's main developer.


The ACCCIM is also encouraging investors from Hong Kong, China, Taiwan and Singapore to participate in the development of the IDR.


Cheng said several groups of investors have expressed interest and may likely form a consortium soon to start negotiations with Khazanah.

Interest in IDR gaining momentum, says adviser

Interest in IDR gaining momentum, says adviser

By THE STAR

KUALA LUMPUR: Interest in the Iskandar Development Region (IDR) is gaining momentum among foreign investors, going by the rising number of visits to the region and talks being held with potential investors.

IDR adviser Tun Musa Hitam told reporters yesterday after the AGM of British Malaysian Chamber of Commerce (BMCC), of which he is co-patron, that talks on investment opportunities were currently being held with “certain Chinese parties”.

Investors from different countries, including 200 potential investors from Singapore, had visited the site, he said, but declined to give specific names.

Musa said various investors had also expressed interest in different aspects of the IDR.

BMCC chairman Peter Wentworth said British companies had a very positive view of the IDR as well.

“It’s a very natural extension of what Singapore and Malaysia could be doing.

“And most companies, particularly those in construction, would be interested to have a part in that region,” he told a press conference later.

Two-way trade between Malaysia and Britain hit RM2.5bil this year. Wentworth believes there is still an upside to this in the near future. The country is the third largest foreign investor in Malaysia.

Sculpting Horizon Hills' star attraction

Sculpting Horizon Hills' star attraction

By THE EDGE

Golf courses are akin to fine red wine — they improve with age. A great golf course flows, challenges, teases and rewards. It will not hesitate to punish too.

Ross Watson would concur. Ross Watson who? Think golf course design. Closer to home, he is behind the design of the award-winning Kota Permai Golf & Country Resort in Shah Alam, the A' Formosa Golf Resort in Melaka, Petaling Jaya's Tropicana Golf & Country Club and Valencia Golf Club in Selangor, to name a few.

Watson has been designing golf courses the last 25 years and he is back in Malaysia to sculpture what is one of the star attractions of Horizon Hills, a resort lifestyle development located within Nusajaya, which is the country's latest integrated hub within the highly publicised 2,217 sq km Iskandar Development Region in Johor.

It is full steam ahead for his team and him as they work relentlessly to have the 18-hole golf course playable by April next year, as promised to the prime minister.

Gamuda Land's managing director Chow Chee Wah says when fully developed, the course would appear as if it were carved out of a forest. The lakes and ponds, he says, have drainage and other site functions. These are strategically integrated into the layout of the course to provide challenge. Still, there are adequate bail-out areas for the average player.

What goes on behind the scenes to, for instance, put in place dog-leg fairways and bunkers? I decided to check it out.

What greets me at the unfinished Horizon Hills golf course one blistering afternoon is an undulating sea of brown, dotted with men wearing Phua Chu Kang-type of boots; these are in black though. My untrained eyes cannot make any sense of what they are labouring at except that each seems to be working independently. In reality, as I am told later, they are working very much in sync, putting together simultaneously and from all corners the pieces of a very big puzzle called the golf course.

As the Aussie designer explains, the challenge was to get the right team, one that could transfer idea to reality. Clad in long sleeves and a hat — just before entering the work site, Watson whips out his sun block and smears on the stuff to protect himself from the blazing sun — he draws my attention to mounds that seem nothing more than heaps of red soil. "A golf course is an art form. There must be a natural balance about it; the vegetation; the land form..." he offers.

Watson started his own golf course architecture business back in 1979. His earliest commissioned jobs were the Clifton Golf Course near Toowoomba and the Gold Coast Burleigh Golf Course. His design philosophy is to create unique courses using the existing environment and natural terrain to stimulate design. To him, a golf course is only deemed great if it can "sing" to him.

"Not only that, when I stand there, it has to sit properly…" he says, nodding for emphasis.
His view is that no two holes should offer a similar playing experience. Each must be remembered for its uniqueness, he says, pointing to the 200-acre championship course coming up in Horizon Hills. It is going to be big and bold yet subtle. A lot of strategic thought is required, given the terrain of the course and the wind. It is going to be more challenging than Kota Permai, a course that has received rave reviews, Watson promises.

Lest the social golfer feels intimidated, Watson gives the assurance that there will be "plenty of room" for the average golfer in Horizon Hills. "Some may wish to take the easy way to the hole. However, those who take risks and succeed will be rewarded," he says.

In short, Watson is applying the "risk reward" design principle to the layout, which preserves the natural terrain of the land and is accompanied by lots of waterways. Do expect many "heroic" holes, featuring dramatic changes in elevation from tee to green. Watch out for Hole 17 with its green perched on an island.

The unique features of the golf course will include classical bunkering with sweeping sand faces. The valley floor follows natural waterways including ponds, stony creeks and cascading waterfalls.

Working alongside turf superintendent Mark Ecott and key shaper-cum-construction manager Gary Cox, Watson is raising a series of bunkers to give the land a charismatic profile. "I want each hole to be remembered for itself," he says.

Watch out for its opening, along with a 150,000 sq ft clubhouse designed by Argentine Ernesto Bedmar of Singapore-based interior design firm Bedmar & Shi Designers.

KSL replicates Mid Valley concept

KSL replicates Mid Valley concept

By THE EDGE

KSL Holdings Bhd is developing a hotel and shopping centre project in Johor Bahru that replicates the Mid Valley Megamall concept and will have a gross development value (GDV) of RM180 million.

The project, called KSL City, is expected to contribute up to 30% to KSL's annual revenue upon completion in 2010, executive director Ku Tien Sek said.

The Johor-based property is at present identifying suitable operators to manage the proposed 600-room hotel and anchor tenants for the five-storey shopping centre.

Speaking to analysts and fund managers here last Friday, Ku said the company was confident the development would draw tourists visiting Singapore's integrated resort and theme park as it offered a much more affordable hotel stay and shopping experience.

"Hotel rates in Singapore in 2010 could be in the region of S$400 to S$500 (RM898 to RM1,123) per night. Our two-block hotel, on the other hand, is divided into three-star and budget rooms, priced around RM150 and RM100 per night respectively.

"We will also offer shuttle services for our guests who wish to travel to the island resort and theme park in Singapore, which makes the stay at our hotel worthwhile for budget travellers and families," he said.

Ku said the company expected to cater to foreign and domestic tourists with its reasonably priced hotel rooms and the convenience of shopping at the mall, based on the successful Mid Valley business model.

On KSL's property development business, Ku said it would continue to launch commercial and residential properties this year and in 2008, and was targeting a 10% growth in net profit from property sales this year.

He said the company was targeting some RM110 million in net profit this year, including RM40 million from the extraordinary gains from the compensation for the compulsory government acquisition of part of its Taman Bestari Indah project for the Senai-Desaru Highway.

"We are also targeting a 10% growth in net profit from sales in 2008, meaning a 10% improvement from RM70 million this year," Ku said.

The government acquired 28ha from KSL for the highway, and the total compensation of RM77.4 million covers lost sales and construction cost.

KSL now has three flagship projects, namely, Taman Nusa Bestari in Skudai, and Taman Bestari Indah and Taman Kempas Indah, both in Tebrau, with a combined GDV of RM3 billion.

It is launching its Pandan Commercial Centre which has a GDV of RM31 million in the fourth quarter of this year, and will hand over the Giant Hypermarket situated at Pusat Perdagangan Muar (PPM) to the hypermart operator on a 15-year RM60 million lease next month.

"We bought the land at PPM at around RM3 per sq ft (psf), and the current market value (including the building) is around RM100psf. It makes more sense to lease out the building as over 15 years it translates into higher rental value," he said, adding that the PPM project launched earlier this year had a remaining GDV of RM390 million.

Going forward, KSL is banking on the potential of the Iskandar Development Region (IDR) where it has about 405ha, which is about half of its total landbank in Johor.

Ku said the company was also optimistic that sales for its residential and commercial properties would pick up this year after a sluggish 2006, especially with the buzz over the IDR and the waiver of real property gains tax that took effect in April this year.

For the financial year ended Dec 31, 2006, KSL posted a lower net profit of RM67.75 million compared with RM76.23 million the previous year due to lower sales. Ku said sales have started picking since early this.

While KSL's 1Q2007 net profit surged almost 200% year-on-year to RM54.9 million on the back of RM103.3 million revenue, this included the RM58 million compensation received from the government.

IJM Prop eyes 50pc of Larut Leisure

IJM Prop eyes 50pc of Larut Leisure

By BUSINESS TIMES

IJM Corp Bhd's subsidiary, IJM Properties Sdn Bhd (IJMP), plans to buy a 50 per cent stake in Larut Leisure Enterprise (Hong Kong) Ltd (LLE) from Talam Group for HK$1 (HK$100 = RM44.40). The deal will also see IJMP assuming a loan of RM25.63 million from the Talam group to LLE. LLE owns a 60 per cent interest in Jilin Dingtai Enterprise Development Co Ltd, which owns a partially completed "Yin Hai Complex" in Jilin Province, China. The gross sales value of the proposed 35-storey commercial cum residential complex is estimated at RM340 million. LLE is a wholly-owned subsidiary of Larut Overseas Ventures Sdn Bhd, which is a wholly-owned subsidiary of Talam.

Buying properties abroad helps hedge investments

Buying properties abroad helps hedge investments


By THE STAR

MOST Malaysian property buyers are a discerning and sophisticated lot nowadays, with the more affluent ones casting their sights on properties overseas.

S.K. Brothers Realty chief executive officer Charlie Chan sees Australia, Singapore and Britain as popular countries for Malaysians investing in properties overseas.


Elvin Fernandez
“With the growing affluence of Malaysians, investing in properties overseas is one way to hedge their investments. They want to put their eggs in different baskets,” he said.

Chan said those who had invested in properties in Britain years ago would be enjoying capital appreciation and foreign exchange gains, thus encouraging them to invest further.

Australia is also a favourite place – especially Melbourne, Sydney, Perth and Gold Coast – for Malaysians to buy property as many have children who are studying there.

“I don't see these investments affecting our local property market. People are still buying properties here to stay and invest in.

“We are also attracting foreign buyers into our market, especially after the recently introduced policies such as the abolition of the real property gains tax,” Chan said.

He believes these cross-border property investments are good for the country.

“People are looking for security and good returns on their investments,” he said.


Charlie Chan
General manager Chan Ai Cheng said investors were always on the lookout for new opportunities.

“Land investment in Britain is also something worth considering. Investors can expect a return of 300% to 700% over a five to 10-year period,” she said.

Strategic land investment involves buying land with agricultural status or brownfield land which would be converted into residential, commercial or industrial land in future.

The strategy is simple – buy an undeveloped piece of land, wait until its price goes up (with planning permission) and then sell.

When the land is sold, a capital gain is made, but since the British government only taxes people who live or work in Britain, Malaysians will not pay this tax.

“We have clinched a deal worth over RM500,000 from a single investor before,” Ai Cheng said.

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez noted that one of the hottest sectors in the property market in Asean was the high-end luxurious condominium in Singapore.

“That market has been hot for the past one year. International buyers including Malaysians – high net worth individuals – are buying into the sector for capital appreciation and rental income,” he said.

Some high-end luxury condos are said to be selling at about S$3,000 per sq ft.

Elvin pointed out the need for good rental returns for a well-supported luxury high-end condo market.

“We will need a strong expatriate market to push up rental income for Malaysia so that the local luxury high-end condo can benefit from the spillover effect from Singapore,” he said.

He added that there could be more foreign workers in the country with projects from the Ninth Malaysia Plan rolling in and this would strengthen the luxury high-end condo market, as they would be looking to rent the condos.

Colliers International Property Consultants Sdn Bhd deputy managing director Lee Vun-Tsir reckoned the prices of luxury high-end condos in Singapore had doubled in the last eight months.

Lee expects a bigger expat workforce in Singapore, especially with the construction of Genting Inter- national's Sentosa integrated resort, which will have the region's first Universal Studios theme park and a casino.

He said this would help boost the property market there and make it even more attractive for foreign investors.

“Indonesia, especially Bali, is also one of the places Malaysians invest in – cash-rich individuals looking to buy resort developments, private villas and other such properties.

“Bali's resort developments are a favourite as they are relatively cheaper compared with the other resorts in the region – for example, it is one third the price of resort properties in Phuket. We also speak a similar language,” he said.

Lee said the company was not aggressively moving into the overseas property market but rather catered to a niche market with resort properties such as the Angsana Resort and Spa in Bali.

Be cautious and selective, companies advised

Be cautious and selective, companies advised

By THE STAR

WHILE pursuing the many opportunities in the offshore property market has many advantages, developers have been cautioned to do the necessary homework and check the project's viability carefully before taking the plunge. They must be careful to balance the risks and rewards.

Sunway City Bhd (SunCity) senior managing director Datuk C.K. Wong advised Malaysian companies to remain cautious and selective because of the volatile nature of overseas property markets.

“Avoid mega residential and commercial developments initially. Residential developments should be the starting point, and only later the opportunities to develop mixed and commercial projects,” he added.

Wong said a strong equity partnership with an established and reputable local partner was advisable.

“SunCity requires a higher rate of return from its overseas property developments to manage and mitigate the additional risks.”

Mah Sing Group Bhd president and group chief executive Datuk Leong Hoy Kum concurred on the need to be cautious.

Having been approached by some foreign parties to pursue developments overseas, Mah Sing is currently conducting in-depth studies on several opportunities and evaluating the risks and returns.

“We are not in a hurry as there are still a lot of opportunities in Malaysia. Being a prudent developer, we are careful in ensuring that we face minimum risk by putting out minimum capital outlay.

“We also need to do a thorough research on the demand before embarking on any of the projects,” Leong said.

Should the company decide to venture overseas, it is likely to do it via a joint venture with an established local party so that it needs minimum capital payout.

“We need to take into account a whole range of factors and among the most important criteria we are looking for is that our joint-venture partner should be a reputable local party with extensive knowledge of the local market,” he said.

“If we can have that in place, we can concentrate on what we do best and introduce our lifestyle concepts and our branding in their market.”

MALAYSIAN Resources Corp Bhd (MRCB) plans to launch a billion-ringgit real estate investment trust (REIT) made up of commercial properties at KL Sentr

MALAYSIAN Resources Corp Bhd (MRCB) plans to launch a billion-ringgit real estate investment trust (REIT) made up of commercial properties at KL Sentral in five years.

"A REIT will happen when our properties mature. It takes about three years for the buildings to come up and rentals to roll in," MRCB group managing director Shahril Ridza Ridzuan told Business Times after the company's annual and extraordinary general meetings in Kuala Lumpur yesterday.

Assets that may be injected into the REIT include Plaza Sentral 1 & 2 and office towers.

Shahril said the RM8.3 billion KL Sentral is expected to contribute some 50 per cent to the group's revenue this year.

The company is on track to achieving net profit of RM60 million and revenue of more than RM800 million for its financial year ending December 31 2007, up 83 per cent and 51 per cent respectively over last year's.

The results will represent MRCB's third straight year of more than 50 per cent growth following the rollout of the Ninth Malaysia Plan (9MP) and rising demand for its high-end property developments.

"Our overseas operations in Dubai and Bangladesh will contribute less than 10 per cent to revenue as most of the projects commenced only this year," he said.

On the Penang monorail project, Shahril said MRCB is waiting for the Government to finalise the specifications, routing and alignment before finalising the project cost.

"We have put in our papers and started work. The cost will be decided when the structure is finalised," he said.

Shahril told reporters earlier that MRCB was eyeing new markets in the Middle East to replicate its Malaysian businesses like building urban transportation hubs and working on engineering and infrastructure projects.

He said the group's next venture overseas will be in Saudi Arabia where it has begun talks with the locals to provide solutions in its area of expertise.

"We are also bidding for power transmission jobs, transportation hub development and toll highway concessions in Malaysia and overseas to expand our current order book of RM2.5 billion," he added.

Shahril also said that MRCB is still waiting for a final decision by the Government to provide a transmission solution for power to be generated at the Bakun Dam.

He, however, declined to comment if MRCB would take a 70 per cent stake in Peninsular Metroworks Sdn Bhd, which has the concession for the Penang Outer Ring Road project.

"On our side, we are not willing to comment about details on any particular projects. We do view Penang as a big area for our involvement, and we are always looking for opportunities to expand our businesses. Hopefully, in the near future, we will see some of our strategies coming into action," Shahril said.

TA plans RM1.2bil REIT on SGX

TA plans RM1.2bil REIT on SGX

By THE STAR

TA Enterprise Bhd will list its real estate investment trust (REIT) in Singapore by year-end with an initial fund size of around RM1.2bil.

Executive chairman Datin Alicia Tiah said the group was currently working on the listing of its REIT on Singapore Exchange Ltd (SGX).

“We have been talking with our merchant banks and relevant parties for the listing exercise. Hopefully we will be able list our REIT by year-end. It is just a matter of timing,” Tiah said in an interview.

She said this would be a very good time to go for a listing with the current bull market. She added that REIT would be a good way for the company to unlock its property value.

“We believe Singapore is the best location for our listing exercise as the Singaporean market provides better valuations. The REITs listed on the SGX are doing very well, and the approval period from the regulators is shorter,” she explained.

Tiah said more properties could be injected into its REIT, but TA Enterprise would begin with three properties.

The REIT would include The Radisson Hotel in Sydney, its commercial building in downtown Vancouver in Canada as well as Menara TA One in Kuala Lumpur.

“We will have a good combination of REIT because we will have a hotel as well as commercial buildings. I think investors will like it,” Tiah said.

She said the cash raised through the REIT would go towards the funding of its ongoing development projects as well as upcoming projects.

TA Enterprise expects to unlock more than RM500mil and would use the money generated to buy more properties in China and Vietnam or enlarge its landbank locally.

On its overseas expansion, Tiah said TA Enterprise was currently conducting feasibility studies for ventures into Vietnam and China.

“Vietnam and China will offer good opportunities. We have been discussing with some potential partners in Vietnam, but it is still at the preliminary stage,” she said.

She added that TA Enterprise would like to tap the stock broking and property market in Vietnam.

TA Enterprise is expected to use Hong Kong, in which it already has a presence, a stepping stone to penetrate the huge Chinese market.

“We will venture into the property market in China for the moment before deciding to tap into the Chinese stockbroking industry.

“We will take it one step at a time. We'd rather be safe than lose any money,” Tiah said.

TA Enterprise plans to introduce new services in Malaysia in the second half of 2007 and is currently waiting for licences from the local authorities.

The stockbroking company will introduce services such as corporate advisory work and issue-structured products such as call warrants and exchange-traded funds, as well as go into venture capital lending.

According to Tiah, the company is currently preparing for the launch of Idaman Bintang, a residential and commercial development.

The project, which has a gross development value of RM1bil, sits on a three-acre freehold site at the intersection of Jalan Imbi and Jalan Bukit Bintang.

“Idaman Bintang will have three towers. We will be selling two towers and keep one to generate recurring income,” she said.

However, she did not specify other details like the built-up areas and timing of the project.

“The project (Idaman Bintang) has attracted a lot of interest even before the plan is approved,” Tiah said, adding that she believed that TA had a competitive advantage.

She said the company was also planning to build another two towers - TA Three (60 storeys) and TA Four (35 storeys) – on the land adjacent to the existing Menara TA One at Jalan P. Ramlee, Kuala Lumpur.

The towers are just across the road from Kuala Lumpur City Centre.

Tiah said the project would consist of about 300 units of 6-star hotel service apartments, offices and retail spaces.

On the company's financial performance, Tiah said she expected all its business segments to turn in a better performance for the current financial year ending Jan 31, 2008.

“Barring unforeseen circumstances, the company is expected to perform better this year due to the positive sentiment of the stock market as well as the property sector,” she said.

“Although we have not announced our first quarter results, I can assure you that they'll be very commendable results.”

Tiah added that TA Enterprise would also adopt its first ever dividend policy to pay its shareholders consistent yearly dividends of between 40% and 60% of the group's net profit.

For the financial year (FY) ended Jan 31, 2007, TA Enterprise posted a net profit of RM133.7mil on revenue of RM354.5mil, compared with RM80.7mil and RM312.8mil respectively in FY06.

To a question, Tiah said it did think about privatising the company when its share price was trading way below its net tangible assets (NTA) level.

“TA Enterprise was trading at 88 sen early of the year and the thought of privatisation came because the trading price then was not attractive,” she said, adding that its share price was still trading below its NTA level.

Tiah said she might consider a privatisation if the share price go below its “intrinsic value”.

TA Enterprise's share price has gained over 110% from a low of 77.5 sen on Jan 11, closing at RM1.63 last Friday. The counter was the most heavily traded counter that day with 29.3 million shares changing hands.

MAAKL REIT to focus on Asia-Pacific

MAAKL REIT to focus on Asia-Pacific

By BUSINESS TIMES

MAAKL Mutual has launched its first real estate investment trust (REIT) fund, focusing on REITs and infrastructure funds/trusts listed in Asia Pacific markets.

The MAAKL Asia Pacific REIT Fund (MAPREIT), a fund-of-funds investment, will focus on 13 countries - India, China, Hong Kong, Indonesia, South Korea, the Philippines, Singapore, Taiwan, Thailand, Australia, Japan, New Zealand and Malaysia.

Some 200 million units priced at 25 sen per unit will be offered beginning yesterday to June 27 2007. The minimum initial investment is RM1,000 while the minimum additional investment is RM100.

"Beside REITs, MAPREIT will also invest in infrastructure funds/trusts, focusing primarily on utilities, transportation or logistics and communication," MAAKL Mutual chief executive officer Wong Boon Choy said in a statement.

MAPREIT will invest up to a maximum of 98 per cent of its net asset value in Asia Pacific REIT's and infrastructure funds/ trusts. A minimum of 50 per cent must be invested in Asia Pacific REITs at all times while the balance can be invested in infrastructure funds/ trusts.

Quill Capital to buy Wisma Technip, Plaza Mont' Kiara

Quill Capital to buy Wisma Technip, Plaza Mont' Kiara


By BUSINESS TIMES

QUILL Capital Management Sdn Bhd (QCM), the manager of Quill Capital Trust (QCT), plans to buy Wisma Technip and Plaza Mont' Kiara for RM215 million.

The company will buy Wisma Technip from Aragorn ABS Bhd for RM125 million, and Plaza Mont' Kiara commercial shops and car park lots from Sunrise Bhd for RM90 million.


Mayban Trustees Bhd, as trustee of QCT, yesterday signed separate conditional agreements with the respective parties.


The acquisitions are expected to be completed by the fourth quarter of this year.


"Within six months from listing, we are adding to our portfolio two yield-accretive assets with high occupancy and long term tenancies. QCT will also achieve better geographical diversification with this latest foothold in the Klang Valley," QCM chief executive officer Chan Say Yeong said in a statement yesterday.


He said the acquisition is in line with the group's strategy to doubling QCT's asset size to RM560 million by end-2007.


QCT currently holds four buildings in Cyberjaya.


Wisma Technip is a fully occupied office building with a net lettable area of 233,021 sq ft while Plaza Mont' Kiara has a a net lettable area of 73,408 sq ft and is 94.9 per cent occupied.


QCM has also announced a proposed placement of new units in QCT to raise gross proceeds of up to RM377.2 million to finance the proposed acquisitions and other requirements.


The proposed placement of not exceeding 251.4 million units will be to institutional and other investors as well as to the two substantial unitholders.


Capital Commercial Trust (CCT) and the Quill Group may subscribe for new units such that their proportionate unitholdings of 30 per cent in QCT is maintained.


The proposed placement will increase QCT's fund size to up to 490.1 million units from 238.7 million units.


HwangDBS Investment Bank Bhd and Aseambankers Malaysia Bhd are joint placement agents for the exercise.

Bandar Raya plans RM1b REIT

Bandar Raya plans RM1b REIT


By BUSINESS TIMES

BANDAR Raya Developments Bhd (BRDB) may set up a property trust with assets worth more than RM1 billion in three years.

The real estate investment trust (REIT) will feature commercial properties in Kuala Lumpur and Johor, chief executive officer Datuk Jaganath Sabapathy said.

"The REIT will enable us to unlock the value of our assets. By 2009, we will have a million sq ft of prime commercial space. If we decide to launch a REIT, it would be in 2010," he told Business Times after a media briefing on the development of CapSquare in Kuala Lumpur yesterday.

Jaganath said the REIT will include assets such as the Bangsar Shopping Centre (BSC), properties at CapSquare, commercial components in The Troika and Permas Jaya Mall in Johor.

He also said that BRDB expects to post better earnings this year, driven by sales at CapSquare, The Troika and One Menerung. The latter two are luxury condominiums in Kuala Lumpur.

CapSquare, sprawled over 6ha, comprises two 40-storey office towers; two high-rise condominium blocks; four signature office buildings and a four-storey retail centre; two eight-storey office towers; and an entertainment, fitness and food village, known as e.centre.

The estimated gross development value (GDV) of the project is around RM2 billion, and it is expected to be completed by 2010.

Jaganath said the gross development cost of the project is expected to be around RM1.5 billion due to an eight-year delay to finish the job.

CapSquare was stalled in 1997 because of the financial crisis and other issues.

It was relaunched in 2005. BRDB has a 70 per cent stake in the project, with the rest held by UDA Holdings Bhd.

"We plan to build a hotel in CapSquare in five years. Next year, we will launch two luxury condominium projects in Bangsar with an expected GDV of RM1.2 billion," Jaganath said.

Homebuyers in Malaysia

Homebuyers in Malaysia
Traditionally overseas homebuyers in Malaysia have originated from the US, China and Japan. Today, however, as competition amongst other emerging property markets gathers steam, Malaysia is making sure it does not miss the boat and today actively encourages all forms of foreign investment to its shores.

As a result of a successful growth in economy and a competitive foreign exchange status, Malaysia attracts an exciting new influx of foreign investment in industry and real estate. Residential and holiday home purchasers are confidently buying into the very beginnings of a property boom in Malaysia, safe in the knowledge that prices are relatively low and growth figures remain high.

Malaysia is an attractive destination for high net worth foreigners looking to set up home. Now that the government has introduced changes in the Foreign Investment Committee (FIC) guidelines for foreign property purchase and restrictions have been lifted regarding the usage and number of units that can be purchased by foreigners, real estate in Malaysia has become far more accessible.

Malaysia Property Hotspots
As is often the case in emerging markets, city centre property investment can yield some high returns and Kuala Lumpur is no exception. With an ever increasing expatriate worker presence, a requirement has emerged for commercial premises, top-end accommodation, off-plan properties and buy-to-let options which are particularly attractive to investors. Alternatively, due to a sharp increase in tourist figures in Malaysia, property purchasers are finding some excellent opportunities in coastal areas such as Port Dickson, namely the sea-front Legend Water Chalets and the Banyun Curve Water Chalets, which are proving highly popular amongst many discerning property buyers.

Malaysia Property Investment

Malaysia Property Investment
Property investors in Malaysia are profiting from some lucrative off-plan investments in and around the capital city as well as within the coastal tourist resorts and both markets are experiencing high growth rates. Residential property prices have generally risen by between 15 and 30% over the past five years and rental yields in Kuala Lumpur stand at a respectable 7.4 to 8.7%, while corresponding figures remain just a little lower within the tourist resorts. Holiday rentals are big business, particularly in areas in and around Port Dickson, as is the holiday home market which continues to attract visitors to this interesting and exotic holiday destination.

While property investment in Malaysia remains a firm favourite amongst Asian and US investors, we are witnessing a current European trend for worldwide property investment and Malaysia is now catching the eye of all discerning property investors with worldwide vision for a shrewd investment.

Malaysian property prices remain low by international standards and the local currency, the Malaysian ringgit (RM) is very cheap versus the sterling, making investment in carefully selected Malaysian property a highly lucrative option.

Reasons why property in Malaysia is a good investment
Government legislation is actively encouraging foreign property investment through a number of tax incentives and the relaxation of laws governing real estate purchase by foreigners.
Through its Ninth Plan, the government of Malaysia aims to improve the infrastructure and general economic development of the country. Analysts believe this will have a positive impact on the Malaysian real estate market.
Malaysia boasts a stable economy and government. It already has a world-class infrastructure, industry and support, along with a modern and cosmopolitan lifestyle.
English is widely spoken by a multi-lingual, experienced and qualified workforce.
The value of the local currency, the ringgit, is far below the euro, dollar and pound sterling, allowing foreign investors to buy a lot more for their money in Malaysia.
Property prices per square metre in all major Malaysian towns and cities are a fraction of the cost of similar investments in London and New York.
There is high demand for quality new real estate is high from an affluent expatriate market.
Malaysia is also among the top three countries for the greatest number of tourist arrivals among the 53 Commonwealth countries, according to the World Tourism Organisation.
Tourist arrivals in Malaysia rose by more than 160% between 2000 and 2005 - an astonishing achievement for tourism.
Malaysia is located near the Equator, hence its year-round tropical climate, ideal for tourism.
Malaysia does not suffer from any natural disasters such as earthquakes, volcanoes or tornados.
Extensive white sandy beaches continue to draw holidaymakers. Port Dickson resorts which have long been a favourite amongst visitors from Kuala Lumpur and other neighbouring towns who seek an escape from hectic life.
Buying costs are very low in Malaysia at between 3.4 to 6.75% of the property value, including 2.75% agent’s commission (for first MYR 500,000).
IPIN (International Property Investment Network) assists investors of all levels to find the best and most current investment opportunities. The network carefully vets all recommended investment locations, therefore maximising members´ chances of achieving the best return on investment from their property purchases in Malaysia.

Malaysian Property Market Overview

Malaysian Property Market Overview
Current trends in property purchase in Malaysia are characterized by investment either in the capital city of Kuala Lumpur or within the new coastal resorts. City investment is growing in line with increased direct foreign investment from China, the US and Japan. A surge in economic activity (predicted increase in worker numbers of 27.9% by 2013 over 10 years) has brought with it a high demand for quality commercial and residential real estate lettings to serve an ever growing expatriate community employed in and around the city. Off-plan properties are being sold to international property developers with impressive guaranteed rental yields of between six and ten percent.

Meanwhile, growth in the tourism sector has prompted the birth of new resorts, particularly in coastal areas just south of Kuala Lumpur around Port Dickson. Boosted by a strong tourist industry, property purchasers are experiencing impressive returns on their buy-to-let and off-plan investments. These holiday resorts also offer great potential for second home buyers seeking an exotic overseas home in the sun.

The Malaysian government has recently relaxed home ownership rules for foreigners and introduced tax incentives which contribute to make this property market an easier and more beneficial option for foreign ownership. Further details are available on www.imi.gov.my.

Singapore exchange launches Reits in Malaysian property

Singapore exchange launches Reits in Malaysian property
The Singapore exchange is believed to be seeking real estate investment trust (Reits) listings for products that could include Malaysian properties.

According to the Times, the Singapore Reit market has grown to be worth approximately £7 billion in recent years....

International Property Forum
The Singapore exchange is believed to be seeking real estate investment trust (Reits) listings for products that could include Malaysian properties.

According to the Times, the Singapore Reit market has grown to be worth approximately £7 billion in recent years.

Alastair Gillespie, co-head of Asian real estate research at UBS, told the newspaper that the "liquidity" within the country's Reits market could see Singapore become an important investment centre.

"It could quite quickly begin to attract Reits where the underlying assets are based in India, Indonesia, Vietnam, Malaysia and China," he said.

In related news, Christopher Boyd, executive chairman of Regroup Associates, recently said that Malaysia's rapid economic growth would be able to sustain its property market, the Edge Daily reports.

Additionally, the government removed capital gains tax earlier in the year, a move which could attract a greater number of foreign property investors.

Services Sector To Do Better This Year

Services Sector To Do Better This Year




KUALA LUMPUR, June 29 (Bernama) -- The deficit in the country's services trade is expected to see further improvement this year with increased focus on services development and enhanced domestic capacity, the Ministry of International Trade and Industry (MITI) says.

"The Visit Malaysia Year 2007, greater outsourcing opportunities, increasing port throughput and higher revenue from Islamic financial services expansion would enhance exports of services," MITI said in the Malaysia International Trade and Industry Report 2006 released here Friday.

Under the Third Industrial Master Plan (IMP3) two national councils -- Malaysian Services Development Council and the Malaysian Logistics Council have been established to coordinate the promotion and development of the targeted services sector.

Enhance domestic capacity would reduce import growth to some extent, it said.

The services sector account for the largest share of Malaysia's Gross Domestic Product (GDP) with 51.8 percent contribution last year, with a growth rate of 7.2 percent.

It was estimated that about 5.7 million workers or 51.3 percent of the workforce were employed in the services sector. Non-government services were estimated to account for 44.7 percent of GDP and 41.8 percent of the total employment last year.

Last year, the finance, insurance, real estate and business services maintained their position as the leading sub-sectors, contributing an estimated 14.8 percent or RM70.2 billion to GDP.

This was followed by wholesale and retail trade, hotels and restaurants with RM65.2 billion or 13.7 percent, and transport, storage and communications RM34.8 billion or 7.3 percent.

-- BERNAMA

Friday, June 29, 2007

Real EstatePhilippine Star Online - Within the next

Real EstatePhilippine Star Online - Within the next
Real Estate
Philippine Star Online - Within the next five years, over 9,000 residential condominium units spread in at least 28 high-rise buildings will become available in Bonifacio Global City indicating the status of the 240 hectare business district as a fast-rising urban center. In
Source: www.philstar.com
Denver commercial real estate market on solid ground
Rocky Mountain News - The booming Denver commercial real estate is "as good as it gets," Sherman Miller, head of Cushman & Wakefield's Denver office said today, before brokers discussed investment, industrial, office, apartment and california estate fresno real retail markets. The industrial market
Source: www.rockymountainnews.com
Singapore poised to take lead Reits role
Times Online - Singapore is positioning itself as a global centre for trading in real estate investment trusts (Reits), tapping the Asian appetite for property risk. In its attempts to outclass Tokyo and california estate fresno real Hong Kong, the Singapore exchange is expected to pursue
Source: business.timesonline.co.uk
Limited Ownership Opportunities Newly Available at Raffles St. Lucia
Forbes - ST. LUCIA, West Indies, June 28 /PRNewswire/ -- Globally renowned Raffles Hotels & Resorts has announced the introduction of a limited Founder's Program at its newest Caribbean resort: Raffles St. Lucia, West Indies. Elegantly appointed estate
Source: www.forbes.com
In Pictures: Most Resilient U.S. Real Estate Markets
Forbes - When it comes to real estate, the questions on everyone's lips are: How low is low, and california estate fresno real when's the perfect time to buy back in? Of the largest metros still experiencing a slowdown, these are projections of when and california estate fresno real how those areas will recover. Data
Source: www.forbes.com
Free Mortgage Pre-Approval Letter For Victorville Real Estate Buyers
PR Inside - 2007-06-28 16:17:58 - Your search for Victorville CA real estate should start by obtaining a free mortgage loan pre-approval letter. California realtors treat you as a qualified buyer and california estate fresno real you know your maximum home loan amount Your Victorville CA
Source: www.pr-inside.com
Fitch Rates Resource Real Estate Funding CDO 2007-1, Ltd./LLC
Forbes - Fitch assigns the following ratings to Resource Real Estate Funding CDO 2007-1, Ltd. and california estate fresno real Resource Real Estate Funding CDO 2007-1, LLC (collectively, the co-issuers): --$180,000,000 class A-1 floating-rate secured notes due 2046 'AAA'; --$50,000,000
Source: www.forbes.com
BIZ WIZ'S $1.6M IN UNREAL ESTATE
New York Post - She promised to flip them a house. Instead, Manhattan prosecutors say, she flipped them the bird. Jennifer Wilkov, a former financial adviser for American Express, pleaded not guilty yesterday to allegedly tricking some two dozen New York-area
Source: www.nypost.com
L. Merion estate to be kept intact
Philadelphia Inquirer - Under its current zoning, Glenmede could have been the site of as many as 13 houses. The seller, Bryn Mawr College, has been using the site for student housing, but it's too far from campus. Fast action by the conservation community has spared a Main
Source: www.philly.com

China's Economy May Grow at Fastest Pace in 12 Years (Update6)

China's Economy May Grow at Fastest Pace in 12 Years (Update6)

By Josephine Lau


A Chinese flag flies over the People's Bank of China June 29 (Bloomberg) -- China's economy may expand at the fastest pace in 12 years in 2007 and inflation will exceed the central bank's target, according to a report by economists at the People's Bank of China research department.

Gross domestic product may grow 10.8 percent, said the report published in the Beijing-based China Securities Journal today. Consumer prices may rise 3.2 percent, the fastest pace since 2004 and more than the central bank's 3 percent cap.

Stocks fell as the report added to speculation China will raise interest rates for a third time this year. Premier Wen Jiabao called for ``moderate tightening'' this month after inflation jumped to a 27-month high, factory spending accelerated and the stock market drew warnings of a bubble.

``The Chinese economy's still firing on all cylinders,'' said Tai Hui, an economist at Standard Chartered Bank Plc in Hong Kong. ``These numbers suggest that real interest rates may be even lower than expected, highlighting the need for higher rates.''

The CSI 300 Index fell 2.5 percent and posted its first monthly decline in almost a year. The benchmark has soared 84 percent this year after more than doubling in 2006.

Two interest-rate increases this year have failed to slow the economy's expansion. The benchmark one-year lending rate stands at 6.57 percent and the deposit rate is 3.06 percent.

Overtaking Germany?

China's economy is drawing closer to replacing Germany as the world's third-largest after expanding by at least 10 percent for each of the past four years. China last year reported gross domestic product of 20.9 trillion yuan ($2.6 trillion). That compared with Germany's $2.9 trillion, Japan's $4.5 trillion, and the U.S.'s $13.3 trillion.

The World Bank and the Organization for Economic Co- operation and Development expect China's economy to grow 10.4 percent in 2007. The International Monetary Fund and the Asian Development Bank forecast a 10 percent expansion.

Inflation has outpaced returns on bank deposits, encouraging households to shift money into shares. China's legislature today passed a law allowing the cabinet to scrap or reduce a 20 percent tax on interest income to try to cool the stock market, state news agency Xinhua reported.

Prices face ``potential pressure,'' the central bank said today in a separate statement on financial stability.

China's economy grew 11.1 percent in the first quarter and the government is due to report second-quarter figures in mid- July. Officials are concerned that an investment boom in stocks, factories and real estate could end in an abrupt economic slump.

Credit Growth

Record trade surpluses are spurring the expansion and pumping cash into the financial system, fueling growth in investment. The central bank has ordered lenders to set aside larger reserves five times this year to restrain credit.

The China Banking Regulatory Commission today urged small and medium-sized banks to adhere to a government policy of curbing loans to industries that have too much investment.

Wen signaled on June 14 that the central bank needed to raise interest rates or further curb bank lending. Consumer prices rose 3.4 percent in May from a year earlier because of soaring food costs. Factory investment rose 25.9 percent in the first five months.

The government in February announced an 8 percent growth target for 2007.

That was ``only a signal by the government that it didn't want further acceleration in investment and economic growth,'' said Huang Yiping, an economist with Citigroup Inc. in Hong Kong. ``Everybody knew it would be higher than that.''

China's economy expanded 10.7 percent in 2006 while consumer prices rose 1.5 percent. Gross domestic product grew by 10.9 percent in 1995.

To contact the reporters on this story: Josephine Lau in Beijing at jlau22@bloomberg.net

Hong Kong's shopping spree surges on, and on

Hong Kong's shopping spree surges on, and on
by Claire Cozens
Send by e-mail Save Print Just west of Hong Kong's bustling Tsim Sha Tsui tourist district, bamboo scaffolding stretches like a web over a swathe of reclaimed land surrounded by tower blocks.

It's a seemingly unpromising piece of real estate, but by the end of this year should be home to a massive new complex devoted to Hong Kong's favourite obsession -- shopping.

A decade ago when Britain was handing the territory back to China, sceptics predicted an end to its decades-long shopping spree with a wealth exodus from communist Chinese rule.

It didn't happen. In fact, although its international reputation is often centred on global finance, Hong Kong's economy is actually driven by consumer spending.

Lots of it.

Last year, residents and tourists spent 219 billion Hong Kong dollars (28 billion US dollars) in the city's shops, principally on retail goods.

Consumer power pulled Hong Kong from a seven-year recession sparked by the Asian financial crisis, and the subsequent economic boom has combined with an influx of bargain-hunting tourists from the Chinese mainland to keep the tills ringing.

In an indication of the city's cachet, Louis Vuitton has opened six stores here since the handover, more than it has in Paris or New York.

MTR Corporation, the company running Hong Kong's underground rail network, is hoping to cash in on the boom with a giant shopping centre beside Tsim Sha Tsui, to be called Elements.

It will provide the retail portion of a sprawling new development that will also include the city's tallest building, the International Commerce Centre.

Elements was designed by the architects behind Britain's Bluewater shopping centre. All but two of the spaces have been let, principally to international retailers including high-end British brands Mulberry and Pringle.

It will also house a 12-screen cinema with VIP suites and a martini bar, a 700,000-square-foot (16-acre) roof-top garden and a branch of trendy New York restaurant Megu.

"Shopping is almost Hong Kong's national pastime," said Betty Leong, MTR's chief retail development manager, who is confident there is room for another mall despite concern that traditional market stalls are being squeezed out in the rush for bigger, better and glitzier outlets.

"Hong Kong people are very stressed out, they are time-poor but cash-rich," she told AFP.

"Hong Kong is so condensed, people live in very small spaces and there are not a lot of places to go. This is the third place, somewhere away from office and home where they can go to relax."

The centre is on a direct rail link to Hong Kong's busy airport, making it easily accessible to the hordes of tourists -- 28 million last year -- lured here every year by tax-free shopping.

"The main purpose of most visits is to shop and eat," said Paul Husband, a Hong Kong-based consultant who advises on retail opportunities.

Far from sceptics' forecasts of an end to the consumer high-life, Husband said its continued allure could be attributed partly to Beijing.

"China has made huge efforts to ensure Hong Kong remains successful, for example by ensuring Chinese can have individual visas to visit the city, and allowing Hong Kong companies access to the mainland, rather than trying to clamp down on the city's success," he said.

Around 13.5 million Chinese tourists visited last year spending 27 billion dollars -- more than the rest of the world combined.

The bulk went on clothes, jewellery, watches and cosmetics, and despite a scandal earlier this year over the sale of fake jewellery to mainland buyers, their enthusiasm appears undimmed.

During China's early May holiday week, railings had to be erected outside a Louis Vuitton store to control the queues.

According to Chanel, far from losing significance, Hong Kong is seen more and more by international luxury names as "the trend-setting city for the rest of China."

"The luxury market in Hong Kong is large and it is a window to the region, particularly China," said Boris de Vroomen, managing director of Moet Hennessy Diageo Hong Kong, whose brands include Moet et Chandon and Veuve Clicquot.

Proof of the central role of shopping in Hong Kong came when the visiting French president Jacques Chirac lent the city a huge Picasso, the first time the work had been shown in Asia.

Instead of being displayed in a gallery, the work was given pride of place in a downtown shopping mall.

Hong Kong changed us

Hong Kong changed us
Real Estate By Charlie Smith
Publish Date: June 28, 2007
Vancouver architect Ron Yuen will never forget those heady days following Expo 86 when he helped redesign the north side of False Creek. Yuen was part of a team hired by Concord Pacific to create a new neighbourhood of high-rise residential towers after Hong Kong billionaire Li Ka-shing’s purchase of the former Expo site.

“I can still remember how amazed I was when the first tower started to go up, and the lineups were around the block,” Yuen recalled in an interview with the Georgia Straight. “There were a lot of Chinese immigrants, Hong Kong immigrants mainly, because of Li Ka-shing and his name.”

Tens of thousands of people moved from Hong Kong to Vancouver in the late 1980s and early ’90s, concerned about the future of the then-British colony, which was going to be returned to China on July 1, 1997. In the late ’80s, there was also an investment boom from Hong Kong, triggered by concerns about what would become of the colony’s capitalist business culture after it reverted to China.

Yuen explained that the exodus from Hong Kong has had a big impact on the Vancouver real-estate industry, noting that prior to Expo 86 there were never lineups to buy property. He said the Hong Kong immigrants also brought with them a strong sense of the economic value of land, a sense that has since been developed by local residents who buy condo units before buildings are constructed. “The Chinese immigrants have said, ‘We keep real estate for the long term. We keep it for generations,’” Yuen remarked.

On June 26, the Chinese Canadian Historical Society of British Columbia organized a forum at UBC’s C.K. Choi Building for the Institute of Asian Research to commemorate the 10th anniversary of Hong Kong’s return to China. One of the speakers, Vancouver multicultural social planner Baldwin Wong, cited three factors that came together to transform Vancouver: the above-mentioned influx from Hong Kong in the late ’80s; the city’s interest in densifying the downtown core; and the combination of developers’ expertise and the injection of new capital into the market.

“Vancouver’s downtown waterfront area was forever changed, more so than any other North American city within such a short time,” Wong said, emphasizing that he was speaking personally and not as a city representative.

Wong, a Hong Kong native, moved to Vancouver in the middle of the 1970s. He explained that by the late ’90s, the Hong Kong style of preselling condos and living in high-rises had become a standard way of investing in real estate in this city. “The practice has now spread to many parts of the Lower Mainland,” he said.

Wong noted that between 1971 and 1986, the city of Vancouver’s Chinese population increased from 25,000 to 70,000. Between 1986 and 1996, it doubled again to 140,000, out of an overall population of 420,000. Much of this increase was fuelled by immigration from Hong Kong.

However, he said, after the British ceded control over its colony in 1997, immigration from Hong Kong fell off sharply. “Chinese immigration continues to grow, now from a different source [China],” Wong said. “One can say that the Hong Kong immigrants more or less have paved the way for other Chinese immigrants or have consolidated the reputation of Vancouver as being an immigrant- and possibly a Chinese-friendly place.”

According to Yuen, one indication of the importance of Hong Kong real-estate buyers has been the avoidance of using the number four when labelling the floors of many buildings. In Cantonese, that number sounds similar to the Cantonese word for death, and so someone from Hong Kong might have an aversion to living on the fourth floor, just as North Americans might not want to live on the 13th.

At the June 26 forum, UBC historian Henry Yu noted that the legacy of Vancouver’s 1907 race riots was that Chinese people were permitted to live only in specific parts of the city. For many years afterward, the only persons of Chinese origin allowed to reside in Shaughnessy and Kerrisdale were servants.

“Then the Hong Kong Chinese came with their money and the entitlement of thinking, ‘I can live anywhere I want,’” Yu said. “That is a major, major change in this city. We need to remember this and to think about it. It changed the city for the better. Chinese can now live anywhere.”

Hu Avoids Talk of Democracy As Hong Kong Marks Handoff

Hu Avoids Talk of Democracy As Hong Kong Marks Handoff
Associated Press
Word Count: 642
HONG KONG -- Chinese leader Hu Jintao avoided the touchy issue of democracy Friday as he began his first presidential trip to Hong Kong to celebrate the 10th anniversary of the former British colony's return to China.

After stepping off the plane on a rain-soaked tarmac, Mr. Hu walked past a line of flag-waving children and told reporters he was happy with Hong Kong's progress in the last decade. "I'm even more confident about Hong Kong's future," he added in a brief speech.

Security was tight for Mr. Hu's three-day trip, with the leader expected to face protests from activists ...

Hong Kong's New Groove:

Hong Kong's New Groove:
Ferraris, Hot Chefs, IPOs
Ten years after the handover, the city is thriving -- even as mainland China looms
By PETER STEIN
June 29, 2007; Page P1

HONG KONG -- At the recent launch of a hip new Japanese restaurant here called Zuma, a cross-section of high society sampled pink cocktails and teriyaki beef hors d'oeuvres. American investment bankers mingled with the fashionable daughters of old Hong Kong money as well as new faces, including the granddaughter of the chairman of China's National People's Congress.


See a timeline of major events in Hong Kong since the takeover. Plus, take a look at Hong Kong, 10 years on.
The scene captured much of what makes Hong Kong thrive these days, nearly 10 years after Hong Kong's July 1, 1997, handover from British to Chinese sovereignty: a legacy of wealth and sophistication, an international character with links to the world of global trade and finance, and an infusion of new money, opportunity and human capital from the new China.

That combination of factors has never guaranteed Hong Kong's prospects under Chinese rule. Beijing agreed to preserve Hong Kong's autonomy and way of life when it signed a handover deal with London in 1984. However, China's desire for political control has sometimes crimped freedoms here, and Hong Kong's push for more democracy remains a point of friction. The growing development of Shanghai and Beijing still threatens to detract from Hong Kong's pull as a center for business and finance.

But Hong Kong's ability to defy skeptics, maintain a leading role in China's economic growth and prosper as one of the world's great cities says much about the former colony's resilience.

Much of the past decade has been a story of adversity here. Almost immediately after the 1997 handover, a financial crisis spread throughout Asia, sinking Hong Kong and its nearly seven million residents into a six-year deflationary spiral. Many businesses collapsed, and home prices fell by as much as 75%. Four years ago, an outbreak of the SARS virus killed nearly 300 people in the city, bringing life here to a near standstill.


Today, demand from wealthy mainland Chinese buyers is driving prices in Hong Kong's luxury-housing market to records. Last December, a piece of land on picturesque Victoria Peak sold at auction for the equivalent of about US$5,400 a square foot, making it some of the most expensive real estate in the world, property agents say.

Hong Kong's ability to bounce back also says something about the "stickiness" of its competitive advantages: a reliable legal system, sound business regulation and a sophistication in financial, retail and travel services that is so far unmatched elsewhere in China.

"Your water glass is never empty in a restaurant," says Jennifer Woo, who runs Lane Crawford, a Hong Kong-based luxury and fashion retailer.

These days, the economy is purring. Last year, gross domestic product grew 6.9%, and growth is expected to remain strong this year. Unemployment is at a nine-year low of 4.3%. Consumer spending is up -- and conspicuous consumption is, too. Last year, Hong Kongers bought 96 Ferraris, compared with 28 in 2003. Zuma is only the latest chichi restaurant to set up a base here: Celebrity chefs Nobu Matsuhisa, Joel Robuchon and Alain Ducasse have all opened Hong Kong restaurants in the past few years.

For much of the colony's long history since the British took possession of it in 1842, Hong Kong was a haven of stability and safety that contrasted with upheaval elsewhere in China. Many of its business leaders today are the children of refugees who fled here in search of a better life. Under British rule, those people turned Hong Kong first into a manufacturing and trading center, then a services and logistics hub with a growing role in global finance.


That role has made Hong Kong, not Shanghai, China's premier financial center today. Last year, thanks to share sales by two of China's biggest banks, Hong Kong's stock exchange raised $42.7 billion in initial public offerings -- more money than the stock exchanges in New York, London or Tokyo. Hong Kong is China's only exchange where foreigners can freely trade shares in the country's biggest listed companies.

The financial action and Hong Kong's quality of life are attracting an infusion of new talent from China, including people like Neil Shen. A 39-year-old entrepreneur from Shanghai, Mr. Shen co-founded one of China's biggest online travel companies and a Chinese hotel chain. He now runs a venture-capital firm and keeps his primary home here in Hong Kong, in the exclusive neighborhood atop Victoria Peak.

When he first worked in Hong Kong as an investment banker 10 years ago, mainland Chinese professionals like him were a rarity, and people from the North were sometimes looked down upon by Hong Kong Chinese. Speaking Mandarin, not the local Cantonese dialect, immediately set him apart. People knew: "You're not a Hongkie," he says.

Today, though, "I feel I'm part of Hong Kong -- Hong Kong is my home," he says. Mr. Shen's two daughters attend Hong Kong schools, and he is a local member of the Young Presidents Organization, a networking group for businesspeople. "This is a place for people who are open-minded, willing to learn, willing to mingle," he says. "It's easy. And it's sophisticated, compared to Shanghai and Beijing."

For Allan Bu, an investment banker with Canadian Imperial Bank of Commerce in Hong Kong and native of northern China's Shandong province, Hong Kong is a happy middle ground between China and the West. Working for a Chinese investment bank, he spent several weeks in New York once, but knew that life there wasn't for him. Here, he says, "you have an overseas flavor, but you're part of China." One catch: He laments that the high cost of housing makes it difficult to live in a decent-size apartment, "unless you're super-rich."



In the decade since the Chinese handover, Hong Kong has seen massive protests against a planned antitreason law, top, and the 2003 SARS crisis, above, which killed nearly 300 people there.
China's super-rich appear to like Hong Kong, too. A number have bought homes in some of the city's most elite neighborhoods. Li Ning, a former Olympic gymnast who now runs China's biggest domestic sportswear brand, last year bought a 540-square-meter villa on the south side of Hong Kong Island for about US$19 million. One of his neighbors, the head of a mainland Chinese tobacco and liquor empire, paid about US$21.5 million for his home.

Hong Kong hit what many feel was its rock-bottom moment in 2003, during the outbreak of severe acute respiratory syndrome.

"SARS was the turning point," says Allan Zeman, a Canadian-born entrepreneur and longtime Hong Kong resident whose early investments in bars and restaurants helped establish one of the city's main nightlife districts, Lan Kwai Fong. "Hong Kong was really on its knees. Somebody needed to light the match to get the confidence burning."

It was also a time of huge political unease in Hong Kong. That summer, half a million people marched in the streets to protest then chief-executive Tung Chee Hwa's government and its policies, including plans to enact an unpopular antitreason law. (The law wasn't enacted.)

So China intervened to help Hong Kong's economy. It signed a trade pact with Hong Kong that gave the city's businesses certain investment privileges in China. And it loosened restrictions on individual travelers to Hong Kong from the rest of the country, goosing both the travel and retail industries.

Suddenly, those businesses began catering to the flood of mainlanders. Mr. Zeman recalls how restaurants in Lan Kwai Fong, a magnet for many expatriates, for the first time began printing their menus in the simplified Chinese characters used by China, rather than Hong Kong's traditional script.

Today, Mr. Zeman runs a successful aquatic theme park that pulls in more than five million visitors a year, just under half from mainland China. On July 1, he will be on hand to celebrate the park's newest attractions, Le Le and Ying Ying -- two baby pandas donated by China's central government to help celebrate the handover anniversary.

"It just shows how important Hong Kong is to China, and how important China is to Hong Kong," says Mr. Zeman of the pandas.

Visitors from China like Charlotte Zhao are now the key clientele for many of Hong Kong's swankiest boutiques. "Of course Hong Kong is the best place to go shopping," says Ms. Zhao, a 23-year old from Beijing whose fingernails are each painted with a different color of polish. She has just bought a watch at the Christian Dior boutique in a Hong Kong shopping mall. "I come to Hong Kong all the time whenever I'm bored at shopping in Beijing," she says.

Not everyone here feels the wealth effect. Many Hong Kong people still live in cramped homes stacked in densely packed housing estates. Some workers struggle to get by, and haven't adapted to the service economy that now dominates after low-cost Chinese labor north of border siphoned off most manufacturing work here.

Nor is Hong Kong out of the danger zone. Its stock market faces new challenges amid efforts by Chinese regulators to build up the Shanghai exchange after a long moratorium on domestic IPOs ended last year. The city's closer ties to the rest of China also mean any economic problems there will reverberate here as well.

And despite those closer ties, politics remains a sticking point. Ten years ago, China took over Hong Kong only after undoing Britain's last-minute attempts to expand the vote and dividing many people here on the subject of democracy. Seven years later, the unpopular Mr. Tung stepped down after more street protests at which democracy was a rallying cry.

Today, his more popular successor, Donald Tsang, a former civil servant under British rule, runs the city amid a calmer political climate. But the political system remains undemocratic -- he was chosen by a group of about 800 electors, not the wider Hong Kong electorate, and Beijing's support made his selection a mostly foregone conclusion. Mr. Tsang's toughest challenge may be mapping out a road toward a more open system, as he has promised to do.

Still, differing political views and the willingness to vent them are a good sign, says Eden Woon, a senior executive with Starbucks Corp. in China who used to run Hong Kong's chamber of commerce.

"The diversity is still there," he says. "There's still people complaining."

--Juying Qin contributed to this article.

Write to Peter Stein at peter.stein@wsj.com

Asia grabs spotlight in global wealth

Asia grabs spotlight in global wealth

BS Reporter / Mumbai June 29, 2007



India sees second highest rise in high net worth individuals.

Strong economic growth has made Asia home to some of the fastest-growing markets in terms of high net worth individuals (HNWI), occupying five of the top 10 spots globally.

India, with a 20.5 per cent increase in the number of HNWIs to 100,015, recorded the second-highest growth rate in HNWIs globally, said the annual World Wealth Report by Merrill Lynch and Capgemini.

India trailed only Singapore, where the increase in HNWIs grew by 21.2 per cent. Indonesia saw its HNWI population rise 16.0 per cent while those of South Korea and Hong Kong rose 14.1 per cent and 12.2 per cent, respectively.

Double-digit growth was also recorded in Russia, the UAE, South Africa, Israel and the Czech Republic and together, these emerging economies made up the top 10 fastest-growing markets globally for HNWI population.

China, with a gross domestic product growth of 10.5 per cent in 2006, saw a 7.8 per cent increase in HNWIs.

Driven by a strong global economy, the wealth of the world’s HNWIs increased 11.4 per cent to $37.2 trillion in 2006. The number of HNWIs in the world increased by 8.3 per cent in 2006 to 9.5 million and the number of ultra high net worth individuals grew 11.3 per cent to 94,970.

In the Asia-Pacific, HNWIs increased to 2.6 million in 2006, an 8.6 per cent gain from the year before. These HNWIs’ combined wealth increased 10.5 per cent to $8.4 trillion.

In 2006, HNWIs’ investment portfolios also saw a shift to real estate. Globally, HNWIs shifted more money into real estate, at times liquidating some of their alternative investments for this.

This trend was most dramatic in the Asia Pacific, where 29 per cent of HNWI assets was held in real estate, up from 16 per cent in 2005. Globally, HNWIs held 24 per cent of their assets in real estate compared with 16 per cent in 2005.

Asia Pacific HNWIs also had the lowest exposure to fixed income securities, with only 15 per cent of assets in this category compared with 21 per cent for HNWIs globally. Equities made up 24 per cent of Asian HNWI investments, below the 31 per cent global average.

In 2006, Europe regained its position as the second most popular destination, after North America, for HNWI investments, accounting for 25 per cent of total HNWI assets. Asia accounted for 21 per cent of HNWI assets.

The report expects the growth rates of Asia and Latin America to ease as global demand slows. It says the combined global HNWI wealth is expected to grow 6.8 per cent annually between 2006 and 2011 to $51.6 trillion.

Cool savings

Cool savings
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PANASONIC is introducing its latest range of refrigerators incorporating the Intelligent Inverter or i-INVERTER technology developed specifically to lower the running cost, thus giving consumers savings of up to 20% in terms of power consumption.

The NR-B402V model is priced at RM2349
This latest range of refrigerators comes in four new models with two, four and six doors to cater to every household needs and is also equipped with multi-hygienic functions that eliminate unpleasant odour and inactivate moulds and bacteria.

“At Panasonic, we are concerned with the rising power cost and environmental damages associated with power producing methods. Hence, our i-INVERTER technology is the result of dedicated R&D and Panasonic is the first company in the world to develop and market an inverter-controlled refrigerator,” says Panasonic Malaysia Sdn Bhd managing director Hiroshi Nakamura.

“Our i-INVERTER technology has an intelligent sensor that can cleverly detect the changes in temperature due to the door opening and closing or the amount of food stored by simply adjusting the temperature inside the fridge to a more efficient and stable level which saves energy.

“The 20% energy consumption savings is certainly a major amount considering that the refrigerator is ranked second behind an air-conditioner in terms of power consumption among all household appliances.

“It too represents a small but significant step towards reducing global warming, thereby creating a healthier and sustainable ecological environment,” added Nakamura.

The i-INVERTER series of refrigerators is available at all authorised Panasonic dealers nationwide at an affordable price from RM2,049 to RM6,999.

A good choice in flooring

A good choice in flooring
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Made from European technologies and raw material from Asia, Floor Depot has a stable structure
HOME improvement is fast catching on in our country. Promising a traditional yet natural appeal, wood flooring is an all-time favourite, when it comes to renovation or home d├ęcor.

Wood is a floor furnishing material that is soft to the touch, elegant in appeal and comfortable too.

Different kinds of living areas demand different types of flooring.

All wooden flooring from Floor Depot is designed with the aim of meeting the same fundamental requirements, which are the perfect combination of beautiful styling, textures and colours that meet every individual’s expectation.

Made from European technologies and raw material from Asia, it has a stable structure that can withstand extreme/local weather conditions.

Through the wide variety of wood flooring, Floor Depot can meet all requirements – from simpler options to floors with unique qualities in terms of appearance and advanced technology.

Couple that with the choices of wood flooring, Floor Depot offers a comprehensive range of accessories with 100% perfectly matched colour skirting and moulding to address the specific needs of every home.

Three suitors for TA Enterprise REIT

Three suitors for TA Enterprise REIT
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KUALA LUMPUR: TA Enterprise Bhd, which is aiming to list its real estate investment trust (REIT) by early next year, is being courted by three stock exchanges, executive chairman Datin Alicia Tan Kuay Fong said.

The properties to be injected into the REITs are Terasen Centre in Vancouver, Canada, Radisson Plaza Hotel in Sydney and Menara TA One in Malaysia.

Together, the properties have a market value of RM1.2bil.

Tan said TA Enterprise had been approached by the stock exchanges of Malaysia, Singapore and Australia to list the REITs on their boards.

Currently, the Singapore Stock Exchange seems more attractive compared with the other two stock markets for products like REITs, she said.

But nothing had been finalised yet, and advisors for the REITs were also yet to be appointed, she said after the company AGM yesterday. – Bernama

Majuperak plans project in Penang

Majuperak plans project in Penang
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KUALA LUMPUR: Perak state-owned Majuperak Holdings Bhd plans to launch a 17.9-acre commercial development in Seberang Prai, Penang, by early next year.

Majuperak, which yesterday began trading on the main board after taking over from United Chemical Industries Bhd (UCI) of the second board, has submitted the application to the Penang Government.

The application includes conversion of the land, on which UCI's factories are sited, to commercial use from industrial.

Chairman Datuk Seri Megat Najmuddin Megat Khas told a press conference that Majuperak, which has 4,000 acres, planned to develop 1,000 acres in Perak.

“We are looking at a township model, while our other smaller parcels mainly would be housing projects,” he said.

Datuk Seri Mohamad Tajol Rosli Ghazali signing the ceremonial plaque as Datuk Seri Megat Najmuddin Megat Khas looks on.
Planned in Simpang Pulai, the lake-fronting township would be targeted at buyers within and outside the state, he said.

Majuperak is currently also developing the 800-acre Bandar Tasek Idaman residential project in Batu Gajah, Perak. About 100 acres have been developed since the project was launched about three years ago.

On whether there were plans to list other state arms, Mentri Besar Datuk Seri Mohamad Tajol Rosli Ghazali said the State Government still had two such units – Perbadanan Pembangunan Pertanian Negeri Perak and the Perak Water Board – that were financially strong.

The Perak Water Board, which declared profits of RM54mil for 2005, is targeting annual profits of RM100mil by 2010. The board might be privatised, he said.

For the financial year ended Dec 31, 2006, Majuperak posted a net profit of RM12mil on revenue of RM37.9mil.

In its first-day trading, Majuperak opened at 80 sen but closed at 69 sen, down one sen from its issue price of 70 sen.

YNH joint venture with CapitaLand called off

YNH joint venture with CapitaLand called off
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By ANGIE NG

PETALING JAYA: YNH Property Bhd's share price has fallen 50 sen over the past three days on reports that a proposed joint-venture agreement with Singapore's CapitaLand Ltd has lapsed, which was confirmed by the latter yesterday.

However, YNH is confident the development of Menara YNH in Jalan Sultan Ismail, Kuala Lumpur, will proceed as scheduled despite the exit of CapitaLand.

According to YNH chief financial officer Y.M. Chan, the company will launch the project this year and expects it to be completed in 2011.

The approvals from the authorities are expected in the next two to three months.

Last December, YNH's wholly-owned unit Kar Sin Bhd entered into a memorandum of understanding (MoU) with CapitaLand Commercial and Integrated Development Ltd to jointly develop the commercial project beside the Shangri-La Hotel.

YNH was to have a 60% stake in the joint venture.

In a joint statement on the deal, the two companies had said further details would follow approval from the authorities.

But, in a statement yesterday, CapitaLand said the joint development with YNH had been called off. It said the MoU to build an office tower in the Golden Triangle of Kuala Lumpur “has lapsed due to non-fulfilment of the conditions precedent”.

In an announcement to Bursa Malaysia, YNH said the deal was off and it would develop the project on its own.

It is understood the dispute was over the value of the 133,000-sq-ft land of the project.

According to Chan, a few other potential partners had shown interest in the project and that the company would consider their proposals.

“Based on our strong cash position, and with the support of financial institutions, we may decide to undertake the project on our own,” he said.

He said a number of global real estate and private equity funds had shown interest in buying the building en bloc.

“Going by the strong interest and the high expected yield of 7% per annum, we have raised the price of the building to RM1.5bil from RM1bil,” Chan said.

The office tower with a net lettable space of 1.1 million sq ft – of which 10% is retail space – will cost RM500mil and provide an expected gross margin of 38% to YNH.

To ensure top quality and premium value, Chan said a reputable contractor, preferably from Japan, would be engaged to work alongside YNH's in-house construction arm to undertake the project.

YNH shares ended yesterday 15 sen lower at RM2.80.

Landmarks to sell assets

Landmarks to sell assets
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KUALA LUMPUR: Landmarks Bhd is finalising plans which may involve disposing of certain non-core assets and signing joint-venture agreements.

Chairman Oh Teik Tatt declined to furnish details at the company AGM yesterday but said everything was going as planned, and announcements to Bursa Malaysia would be made accordingly.

“We expect to finalise the masterplan on Bintan (Treasure Bay), our project in Indonesia, around the fourth quarter. We will talk about it when everything is ready,” he said.

He said Landmarks' focus was to hive off certain non-strategic assets and de-gear its balance sheet.

This was to place the company in a better footing for opportunities that might crop up in its mainstay – resorts, hospitality and wellness business, he added.

Among the assets which may be divested are its 20% stake in Teknologi Tenaga Perlis Consortium Sdn Bhd, an independent power producer undertaking the development and operation of a 650MW power plant in Perlis, and a 26.6% stake in Shangri-La Hotels (M) Bhd.

Oh added that Landmarks was exploring several possibilities and would make a firm decision after considering all avenues.

The company recently concluded the sale of wholly-owned unit Sungei Wang Plaza Sdn Bhd for RM284.8mil.

Much of Landmarks' plans are focused on developing a RM4bil resort on Bintan Island, via the acquisition of 64.5% in Bintan Treasure Bay Pte Ltd from Bold Impact Enterprises Ltd and Complete Win Group Ltd for some RM355mil.

This project is expected to start contributing to Landmarks' bottomline as early as next year.

“It will be developed over seven to eight years and expected to be funded through various means, including joint ventures, turnkey contracts, pre-selling of some plots and internal funds,” Oh said.

Landmarks' board believed this investment would be the main catalyst for its next phase of growth.

The company posted a net profit of RM15.9mil on RM36.4mil in sales for the first three months ended March, down 23% and 22% respectively from the previous corresponding period.

For the period under review, the company has RM245.4mil long-term liabilities while its shareholders' fund stood at about RM500mil.

Landmarks' shares closed at RM1.95 yesterday.

Sime UEP to launch USJ Heights

Sime UEP to launch USJ Heights
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By LOONG TSE MIN

PETALING JAYA: Sime UEP Properties Bhd plans to launch the first two phases of its mixed residential development, USJ Heights, next month.

“The development is a gated and guarded concept blended in six distinct precincts.

“Each precinct is held together with a themed garden,” Sime UEP managing director Jauhari Hamidi told StarBiz.

The six precincts will be themed Malay, Balinese, Zen, English, Mediterranean and Highland gardens.

Artist's impression of some of the properties to be developed at USJ Heights
The two phases – USH2A and USH2B – in the Kayangan precinct will consist of units with land areas of 26ft by 80ft and 24ft by 80ft respectively.

The total gross development value (GDV) of the two phases is estimated at RM157mil.

The entire project, comprising 750 residential units in the Subang Jaya conurbation, has a GDV of about RM616mil.

USJ Heights is expected to have generally low to medium density of 5.5 grounded units per acre
“The development is highly accessible and serviced by planned major roads and transport system,” Jauhari said.

It also forms part of the highly marketable housing zone of the Klang Valley and is “exclusively isolated”.

At present, the site has direct access to the west of USJ and the north of the Federal Highway.

Physical concept of the development included “selective land use and intensity” with residential units having dominant land use, Jauhari said.

The USJ Heights development is expected to have generally low to medium density of 5.5 grounded units per acre.

Special consideration has also been given to orientation, location and distribution of the units.

The designs of the properties were modern contemporary with decorated facade and oversized windows to maximise natural lighting as well as spaciousness with large built-up areas, Jauhari said.

Future phases of the development will include bungalows and more designer homes.

The full development of USJ Heights is expected in 2010