Saturday, September 1, 2007

URA launches tender for Sin Ming light industrial site

URA launches tender for Sin Ming light industrial site

SOILBUILD Group Holdings has bought the freehold Margate Mansion off Meyer Road for $58 million through a collective sale.

Recognising potential: Soilbuild factored in a 20% rise in DC rates in the Margate Mansion deal
The deal reflects a unit land price of $882 psf per plot ratio including an estimated $6.5 million development charge (DC) based on July 18, 2007 DC rates. Provisional permission for a new development has not been obtained, so the $6.5 million estimated DC quantum has not been locked in.

Soilbuild will have to pay DC based on Sept 1, 2007 rates, which most market watchers say will shoot up in tandem with sharp gains in residential land values over the past six months.

Asked why Soilbuild announced a deal just a day before the latest DC rates are announced, the group’s executive director Low Soon Sim said: ‘We have factored in a 20 per cent rise in DC rates for the area come Sept 1, and we see the potential of the area. This is a District 15 site located in the much sought-after Meyer Road residential enclave.’

Margate Mansion’s collective sale, which is subject to approval by the Strata Titles Board, was brokered by CB Richard Ellis.

The 34,804 sq ft site has a 2.1 plot ratio - the ratio of maximum potential gross floor area to land area. Assuming an average size of 1,500 sq ft per unit, the site can be redeveloped into a new project up to 24 storeys high, with a total of 48 units, Soilbuild said in a statement yesterday.

The project may be launched towards the end of next year.

Separately, the Urban Redevelopment Authority launched a tender yesterday for a 5.13-hectare industrial site in Sin Ming Lane. The land has a 2.5 plot ratio and is being sold on 60-year leasehold tenure. Colliers International director (industrial) Tan Boon Leong reckons the top bid is likely to be in the $60 psf per plot ratio range. This would translate to a breakeven cost of $230-250 psf for the completed development.

‘If a developer wants to maximise profit, he will build a ramp-up development,’ Mr Tan said.

The site is zoned for Business 1 use and can be used for clean and light industrial use. It is within the established Sin Ming Industrial Estate.

The tender for the site, which is on the confirmed list of the Government Industrial Land Sale Programme, closes on Oct 24
Source : Business Times - 31 Aug 2007

Project off Raffles Boulevard will take 9 months to complete

Project off Raffles Boulevard will take 9 months to complete
(SINGAPORE) The first infrastructure project for next year’s Formula One race was flagged off yesterday by Minister for Trade and Industry Lim Hng Kiang, at a groundbreaking ceremony.
Sporting milestone: Artist’s impression of the 350-metre-long F1 pit building. The 3-storey structure will house the 36 garages for the 12 F1 teams, race control facilities, winners’ podium and hospitality lounges for 4,000 guests.
The pit building for the inaugural Singapore F1 Grand Prix on Sept 28, 2008, will cost $33 million and take nine months to complete.

The three-storey building will house the 36 garages for the 12 F1 teams, race control facilities, winners’ podium and hospitality lounges for 4,000 guests.

It is situated off Raffles Boulevard, close to the Singapore Flyer ferris wheel.

Race promoter Singapore GP Pte Ltd is developing the 350-metre-long building, which will have a gross floor area of about 18,000 sq m.

At yesterday’s groundbreaking ceremony, Mr Lim called F1 the world’s third most-watched event after the Olympics and the World Cup.
The race promoter and government agencies ‘face the daunting task of building 20 per cent of the circuit and this pit building from ground up’, he said. ‘But Singapore is a city of possibilities, so I have full confidence we will be ready for the Sept 28, 2008, race date.’

The pit building is described as having a ’simple yet modern’ design that is environmentally sustainable and meets the Building and Construction Authority’s Green Mark standard.

The world governing body for motorsports, FIA, is expected to confirm the final circuit layout of Singapore’s 5.1 km track this month, Singapore Tourism Board chief executive Lim Neo Chian said yesterday.

When that happens, the Land Transport Authority will start work on constructing and widening roads that will form the street circuit.

‘FIA will also confirm soon whether Singapore will stage a race at night, and in so doing, become the first venue in the F1 calendar to do so,’ said STB’s Mr Lim.

Mr Lim Hng Kiang and STB’s Mr Lim took part in the groundbreaking with Minister of State for Trade and Industry S Iswaran and race promoter and property tycoon Ong Beng Seng.

‘The pit building that will rise from this piece of land we now stand on will be one significant milestone that all will watch closely,’ said Mr Lim Hng Kiang.

‘But besides the infrastructure, what will also be watched closely will be the softer aspects - how Singapore plays host to this international event.’

F1 is part of the government’s efforts to grow tourism into a significant contributor to the economy, he said.

Visitor arrival figures are already breaking records every month. In July there were 951,000 visitors - an increase of 4 per cent from a year earlier.

‘This is the highest number of visitors we have ever received in any single month,’ the minister said. ‘From January to July, a total of 5.883 million people visited Singapore - a 5 per cent increase over the same period last year.’
Source : Business Times - 01 sept 2007

Payouts will be in 3 parts: a lump sum, instalments and insurance

Payouts will be in 3 parts: a lump sum, instalments and insurance
By Tan Hui Yee, Housing Correspondent

THE new HDB lease buyback scheme, which allows flatowners to sell back a portion of their lease, could mean as many as 25,000 elderly folk cashing in.
That number - an initial estimate - will increase over the years, revealed National Development Minister Mah Bow Tan last night.

The scheme, announced by Prime Minister Lee Hsien Loong last month, will be open to people at least 62 years old who own a two- or three-room unit and who have had only one HDB subsidy.

It is is designed to supplement the retirement savings of older, low-income owners while allowing them to continue living in their own homes.

Under the plan, the Government will shorten a lease to 30 years and pay the owner for the amount of time that has been deducted.

Take a 99-year leasehold flat with 50 years left to run. That 50-year balance would be shortened to 30 and the owner compensated when the HDB buys back the 20-year portion.

New vision for estates
SOME cutting-edge proposals for HDB estates are on show at the HDB Hub in Toa Payoh as part of a Housing Board exhibition. Here are some of the concepts:

The actual amount ‘unlocked’ by the buyback will depend on each flat’s market value, said Mr Mah, who opened an exhibition showcasing future public housing projects last night.

But the Government will give owners a subsidy on top of the market value as a way of encouraging people to sign up for the scheme.

The payout will be divided into three parts. The first is an initial lump sum, followed by monthly instalments over a fixed number of years.

If the owner dies during that period, the unpaid amount will go to his family.

The third portion of the payment, said Mr Mah, will go to an insurance plan that will give owners an income for life after the first two payment batches run out.

Mr Mah said his ministry and the HDB are still working out the details of this ’safety net’ with agencies like the Central Provident Fund Board, which is looking into a way to ensure people have enough savings to get by.

Mr Mah also guaranteed home owners who join the buyback scheme that they will still have a roof over their heads if they outlive the 30-year lease. But some may not be able to continue living in their own flats.

The full details of the plan are expected to be ready by next year’s Budget.

Mr Mah also unveiled a wide range of proposals for housing in Punggol, Yishun and the Dawson estate in Queenstown last night.

On display were designs by three leading architectural firms - Surbana International Consultants, WOHA Architects and SCDA Architects. They conceptualised 3,000 cutting-edge homes in three housing precincts in Dawson Estate in Queenstown.

The new generation of public housing will give buyers more choices of homes and landscaped community spaces while bringing greenery and waterscapes to their doorstep, said Mr Mah.

Punggol, for example, will get a 4.2km waterway that will link two future reservoirs and become a centrepiece for housing.

But, Mr Mah cautioned: ‘All these plans…are really premised on continued growth.

‘That is unspoken, but that must be so. If there is another major crisis or slowdown, it’s not just a matter of building it - who’s going to buy it?’

The exhibition will be at the HDB Hub in Toa Payoh until Sept 8 and then moves to various estates.

The HDB will gather feedback before proceeding with the plans.

Source : Business Times - 01 sept 2007

951,000 visitors - the most in a month, beating the previous high of last July by four per cent.

951,000 visitors - the most in a month, beating the previous high of last July by four per cent.

They stayed longer too - 3.6 million days in all, 11 per cent more than last July’s record.

Travellers from the United States, Australia and Vietnam set records of their own for arrivals from the three countries.

Plus $168.3 million in hotel room revenue - 27.5 per cent over last July.

Trade and Industry Minister Lim Hng Kiang is confident that the industry will continue to grow.

‘The tourism sector has been riding a new wave in the last few years,’ he said during the ground-breaking of the Pit Building for next year’s Formula 1 Singapore Grand Prix.

With 5,883,000 tourists visiting Singapore shores in seven months, the industry is well on its way to its ‘10.2 million visitors’ target for the year which, if fulfilled, will be another record.

July has traditionally been a strong month for tourism, said National Association of Travel Agents Singapore (Natas) chief executive Robert Khoo.

Australian tourists head here during their winter season while Americans and Europeans arrive on summer holiday.

Another lure: the Great Singapore Sale.

Visitors from Down Under made a strong showing in July, with their 76,000 visitors making them Singapore’s third largest group of tourists, after Indonesians (192,000) and Chinese nationals (109,000).

Natas’ chairman of the inbound committee Allen Tsang noted that several business events added to visitor numbers.

In July, the likes of Herbalife Asia Pacific Extravaganza 2007, the World Glaucoma Congress 2007 and the 18th Wonca World Conference on Family Medicine were held in Singapore.

Such business events drew close to 25,000 visitors and contributed at least $40 million in tourism receipts.

Whether tourist or business traveller, it did not matter for hotels here.

A spokesman for the Grand Copthorne Waterfront said: ‘The back to back conventions in July contributed to the increase of revenue.

‘We had to turn more than 3,100 room nights away. We also had to stop taking reservations as early as one month before the peak period.’

Hotel cashiers were working overtime, going by the latest Singapore Tourism Board numbers. Nine in 10 hotel rooms were booked up and average room rates hit $185 per night - a record for the month of July.

Just two years ago, room rates were averaging $136.

It was also a bumper month for Changi Airport. In July, 3.16 million passengers passed through Changi’s aerobridges, the highest ever in a single month this year and 3.5 per cent more compared to the same month last year.

While hoteliers and retailers enjoyed the boom, travel agents have raised the alarm about Singapore literally running out of rooms. Natas’ Mr Tsang said the pace at which new hotels are being opened is not keeping up with the growth in visitor arrivals.

And more tourists are expected with Changi Airport’s Terminal 3 opening its doors in January, especially given new attractions next year like the Formula 1 and the Singapore Flyer ferris wheel in the Marina Bay area.

The F1 alone is anticipated to bring in 80,000 tourists.

Weighing in on the issue yesterday, Minister Lim said: ‘We recognise that our demand is greater than supply. We have not been building sufficient hotel rooms during the difficult years from 1998 to 2003 partly because hotel rates were low and hotel developers and investors did not see the yield and the returns to hotel investments.’

In fact, Singapore will need to double the number of rooms here given that it had ‘practically doubled visitor arrivals’, he added.

There are 36,000 rooms here now and Mr Khoo estimates that 5,000 more rooms will be available by 2010, with the integrated resorts contributing half of the total.

The industry is also exploring novel accommodation ideas such as floating hotels, homestays and converting existing buildings to hotels to ease the tight room supply.

Mr Lim said that the Government is releasing many sites to put up new hotels and the ball is now in the developers’ court.

Since August last year, contracts for nine hotel sites, which should yield about 3,100 rooms, have been awarded. Another 10 sites are available, with eight on the reserve list.

He said: ‘They know hotel rates have gone up and will continue to go up at a measured pace.

‘We hope they will tender sensibly for the land price and be in the position to build the supply that we need.’

Source : Straits Times - 01 sept 2007

Demand for Link Hotel rooms even before official opening highlights room crunch

Demand for Link Hotel rooms even before official opening highlights room crunch
By Tania Tan

IT IS barely finished, but already, nine in 10 rooms at the Link Hotel have been taken.
There is still some way to go before its official opening next month and the second block is still being refurbished, but the hotel’s guests are just glad to have rooms to lay down their heads at night.

Of the 150 rooms now available in the Tiong Bahru Road hotel, converted from the old Singapore Improvement Trust flats, 130 have been let out.

The demand for these rooms, priced at between $260 and $600 a night, kicked in even before the hotel’s soft opening in mid-July, and it has consistently filled its rooms since then.

This thirst for rooms is just a sign of the boom times for hotels.

The hotel’s executive assistant manager James Ting said travel agents were already calling him in June to secure rooms for their clients.

‘There was definitely a big demand. The travel agents needed rooms,’ he said.

And no wonder. July saw a record-breaking 951,000 visitors vying for the just over 36,000 hotel rooms available here.

Mr Ting, noting an increasing number of guests from India and China, said: ‘They travel within Asia because it’s familiar territory, and cheaper than Europe or America, so there’s bigger demand now.’

Industry players have already been warning of a room crunch.

Mr Robert Khoo, who heads the National Association of Travel Agents Singapore, has in fact gone as far as to say that the shortage in rooms could put a dampener on growth in tourist arrivals.

The Singapore Tourism Board has said it is working with the Urban Redevelopment Authority to monitor the supply of hotel rooms.

Since last August, contracts for nine hotel sites, which should yield about 3,100 rooms, have been awarded, among them, the Link Hotel.

And with next year’s Formula One races expected to draw some 80,000 to 90,000 more revellers here, the room shortage situation is beginning to look acute.

Yesterday, the Minister of Trade & Industry Lim Hng Kiang said that the Government was aware of the situation and was ‘looking at it’.

The agencies would release land, and with room rates going up, there would be more interest from developers, he said.

Source : Straits Times - 01 sept 2007

Cutting-edge HDB designs on display

Cutting-edge HDB designs on display

Ideas include ‘granny flats’, pick-your-own unit facades and ’sky villages’
By Tan Hui Yee, Housing Correspondent
EXTENDED families could live side by side, in separate but specially designed flats, while other home buyers could pick the specific facade they want for their unit.
These are some of the new faces of public housing and will soon be found first in Queenstown and then across the country.

These cutting-edge proposals were on show last night at the HDB Hub as part of a Housing Board exhibition. If the public backs them, work will start in three to four years.

Dawson Estate, highlighted by Prime Minister Lee Hsien Loong in his National Day Rally speech last month, will be the testbed for such ideas.

Residents will eventually have their pick of more than 3,000 homes in three developments designed by award-winning Singapore architecture firms - Surbana International Consultants, Woha Architects and SCDA Architects.

The companies were told to design estates with spaces for neighbours to linger and chat while retaining the area’s heritage.

‘They have more than fulfilled this brief,’ said National Development Minister Mah Bow Tan last night as he opened the exhibition, which also showcased plans for Punggol and Yishun.

SCDA’s housing blocks, for example, will be more than 40 storeys high, comprising flats with lofts that could be joined to smaller adjacent units if extended families choose to live together.

If built, they will mark a return of the HDB’s multi-generation flats, or ‘granny flats’, which were introduced in 1987 for extended families.

They comprised a four- or five-room flat with an adjoining studio apartment with a separate entrance. A total of 367 units were built before they were scrapped due to poor demand.

Another idea, put forward by Woha, allows buyers to pick from a range of facades for their flats - which include balconies, monsoon windows, planter boxes and bay windows.

Woha also mooted the idea of ’sky villages’ - common high-rise spaces shared by every 10 floors - to encourage interaction.

There are also plans to retain the now defunct market along Commonwealth Avenue and integrate it with new developments, which would include a new plaza for community events.

Longtime Queenstown resident Hu Nguk Mee, 57, looks forward to the return of the district’s former bustle. It was one of the first new towns to be built by the HDB and used to teem with banks, eateries and entertainment outlets.

‘The new designs look really beautiful,’ said Madam Hu.

Singapore Institute of Architects president Tai Lee Siang said giving residents more flexibility in flat design and configuration will allow them to stay longer even as their household needs change over time. This will help foster a stronger sense of community spirit.

Source : Straits Times - 01 sept 2007

Steep hikes of as much as 112% in some areas take industry by surprise

Steep hikes of as much as 112% in some areas take industry by surprise
By Fiona Chan & Joyce Teo

PROPERTY developers will now have to pay a much bigger fee if they want to buy and redevelop a site to enhance its use, such as in a collective sale.
The charges they must pay were raised sharply by the Government yesterday, in what is believed to be the steepest round of hikes ever.

The record increases - which come into effect today - are likely to put a dampener on the collective sale frenzy, property consultants said.

The main impact of higher development charges is that they make it more costly for developers to acquire sites for redevelopment.

Although the half-yearly revision of these development charges is a routine affair, the extent that they rose by yesterday caught market watchers by surprise.

The charges even doubled in some areas, which consultants said has never happened before.

These rises come on top of an unexpected round of hikes in July, which pushed up all development charges by 40 per cent across the board.

Development charges, which can amount to millions of dollars, are based on recent land and property values.

They are revised in March and September every year to keep them up to date with current market values.

Their dramatic rise yesterday was mostly due to the unusually steep climb in property and land prices over the last six months, and particularly because of the record- breaking run of collective sales recently.

The charges are divided by sector - including commercial, hotel and residential - and into 118 locations.

The biggest rises this time round were for non-landed residential sites in the Spottiswoode/Cantonment area, the River Valley/Kay Poh Road/Kellock Road area, and the Newton/Surrey/Lincoln roads area.

Charges in these areas rose by between 108 per cent and 112 per cent, an unprecedented jump.

They may have been boosted by recent deals such as the collective sale of Lincoln Lodge in Newton, which set a benchmark for the area.

In general, charges for non-landed residential land rose by up to 85 per cent in the downtown area, up to 100 per cent in Orchard and 89 per cent in Sentosa.

Islandwide, they rose by 58 per cent on average - the highest increase among the different sectors. Up to last week, consultants were predicting an average rise of 25 per cent at most.

Charges for commercial land, which includes shops and offices, went up by 42 per cent on average.

The largest hikes were for land in the Telok Ayer/Amoy Street area and the Anson Road area. Charges in these locations grew by 105 per cent.

In other sectors, the average hike for hospital and hotel land was 23 per cent, and 11 per cent for landed residential sites. Industrial land saw charges go up by 2 per cent on average.

Given the July rises, some consultants were surprised that yesterday’s hikes were so high.

The ‘double whammy’ of rises in July and yesterday, coming at a time when global credit is tightening, could dampen the collective sale market, said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

The hikes are ‘likely to lead to more cautious bidding by developers and more realistic price expectations by sellers’, she said.

At the same time, Ms Tay added, the supply of collective sale sites could also take a beating as upcoming changes in legislation make it more difficult for estates to go en bloc.

But most developers have already acquired significant land banks and are likely to have locked in lower development charges, noted Mr Nicholas Mak, director of research and consultancy at Knight Frank. He added that another result of the hikes could be a shift in collective sale activity to the suburban areas.

‘The rates are significantly steeper now for prime areas, so suburban areas such as Bedok and Buona Vista may look more attractive to developers,’ said Mr Mak.
Source : Straits Times - 01 sept 2007

Singapore’s bid to host Formula One’s first night race has entered the final straight, with only a few more obstacles to be overcome.

Singapore’s bid to host Formula One’s first night race has entered the final straight, with only a few more obstacles to be overcome.

Recent trials of night-time racing in France were a success, and two more all-important trials - one in Singapore and one overseas - are expected to be held soon.

Approval for a night race must be given from motorsports’ governing body, the Federation Internationale de l’Automobile (FIA).

A decision is expected to be taken after the trials, which are to be held within the next few weeks.

Yesterday, Trade and Industry Minister Lim Hng Kiang expressed optimism that the green light will be given soon.
‘The various tests and various assessments have been going on track, so we’re fairly confident,’ he said at a ground-breaking ceremony for the pit building - where the cars will be refuelled and have their tyres changed during the race - along Raffles Boulevard.

F1 boss Bernie Ecclestone is pushing for several night races on the calendar - especially in Asia - to increase television viewership figures in North America and Europe.

But teams and drivers have given mixed responses to the idea.

Many are apprehensive about the safety aspects. Race cars, which can hit speeds of more than 300kmh, cannot be fitted with headlights - they affect aerodynamics, which are all-important in a sport where a tenth of a second makes a major difference.

They also add weight to cars, slowing them down.

Track lighting, therefore, will have to replicate daytime conditions, and this is difficult and costly to do.

But Mr Lim added that the Republic would go all out to assure the FIA and drivers that a night event would be safe.

‘We’re very committed to the idea of a night race and we will do whatever is in our powers to facilitate it,’ he said.

Singapore’s first F1 race will be held at the Marina Bay area on Sept 28 next year. Testing and qualifying is expected to begin on Sept 26.

The race - along with several new attractions, such as the Singapore Flyer - is expected to further boost tourism in Singapore, which hit record levels in July.

Yesterday, Mr Lim revealed that 951,000 visitors arrived in Singapore that month, an increase of 103,000 over June.

Many were drawn by a new tourism programme that started on July 23 to draw visitors here on weekends.

On the F1 front, Singapore Tourism Board (STB) deputy chairman and chief executive Lim Neo Chian said the country hit a ‘milestone’ yesterday with the ground-breaking ceremony for the pit building, which will be the nerve centre for the race.

The three-storey, $33 million facility, parallel to the Marina Bay waterfront, will house key infrastructure such as the exclusive Paddock Club and 36 garages for the 12 F1 teams.

The building’s glass facade will also offer high-end guests views of the track’s starting straight and pit-lane action.

It will also house race-control facilities, commentary booths, a media centre, the winners’ podium and a rooftop terrace.

In non-race months, it is likely to be used for hosting corporate functions. Its environmentally-sustainable design also meets Green Mark certification.

Said STB’s Mr Lim: ‘Over the next few months, more pieces will gradually come together as we plan the biggest leisure event Singapore has ever hosted.

‘There is still a lot more work to be done.

‘But we can all look forward with some excitement that, in a little over a year, we can come back to this same spot to witness the crowning of the Singapore GP’s first champion.’

Source : Straits Times - 01 sept 2007

Gamuda vying for big name in Vietnam

Gamuda vying for big name in Vietnam
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GAMUDA Bhd, which has made a name for itself in various infrastructure projects in Malaysia, the Middle East and Indo-China, is keen to make inroads in the booming construction, property and infrastructure markets in the region.

The group has set its sights on potential markets such as Vietnam and the Middle East.

Gamuda is actively pursuing RM15bil worth of new jobs locally and in other countries and the group is confident of clinching a few billion ringgit of new contracts by the end of the year.

Group managing director Datuk Lin Yun Ling is bullish on Gamuda's foray in Vietnam.

Datuk Lin Yun Ling
“We want to channel our expertise in building large infrastructure and property projects to other developing countries.

“We see our involvement in our maiden project in Hanoi as the start of our long-term participation in Vietnam's growth,” Lin told StarBiz.

Gamuda has teamed up with the Hanoi People's Committee to undertake the Yen So Park integrated development on 500 acres in the south of Hanoi.

Lin said the Vietnam project would provide “two bites of the cherry” for Gamuda – the construction bite was worth RM1.5bil in the first three years while the development portion of RM8bil would be over the next eight years.

The whole project involves setting up sewerage facilities, cleaning up the Yen So lake system, building a world-class public park and other supporting infrastructure costing RM1.5bil in exchange for the 500 acres of land for property development.

The Yen So Park project, which is Gamuda's first in Vietnam, is a prelude to more things to come for Gamuda in the country.

“Vietnam is short of roads, water, power, bridges and sewerage facilities. We believe that once Gamuda delivers the first three construction jobs – park development, relocation of electrical transmission towers and sewerage treatment works in Hanoi – there will be a platform for us to clinch other projects,” Lin told StarBiz.

Construction of the sewerage and park facilities would begin soon while property launches are expected from early next year.

The 500-acre site will be transformed into a new fully integrated central business district in Hanoi comprising high-rise office towers, 4- and 5-star international hotels, a convention centre, shop offices and residential components within a lake and park setting.

“It is like a big blank canvas for us to paint on – we will be creative and design products that will add value to the place.

“Our property development project will transform South Hanoi into a vibrant and modern hub, with clean and pristine lakefronts and lush green parks. It will also help to develop the neighbouring Hoang Mai and Thanh Tri districts,” Lin said.

The priority is to build up the park and the lake to attract attention to the place. The new park will be ready by 2010, in time for Hanoi's centennial celebrations.

“We expect Vietnam's tourism sector to take off strongly and there is a need for more international standard products and destinations. In this context, Yen So Park is a most timely project to add value to the country's tourism landscape,” Lin said.

He said the main challenge in pursuing more property projects in Vietnam was to locate the right land and partners as foreigners were not allowed to buy land for development but could lease the land user rights from state organisations with an average limited holding of 50 years.

Another way is to form a Vietnamese partnership in which a business partner contributes the land rights as a form of capital to the joint-venture company.

An analyst with a local brokerage said Gamuda might participate in two to three more property ventures collectively worth around RM6bil in gross development value in Ho Chi Minh.

“The next exciting project could be a new development in Long An that could generate a gross development value (GDV) of RM5bil,” he added.

Besides Vietnam, Gamuda has been pre-qualified for RM5bil worth of jobs in the Middle East.

In Qatar and Bahrain, it has an outstanding construction order book of RM1.6bil while contracts in Laos and Vietnam are worth RM3.4bil. In Malaysia, it also has projects in hand worth RM6bil.

Currently, it is constructing the RM1.8bil New Doha International Airport and the RM770mil Dukhan Highway in Qatar. It has commenced works on the RM640mill New Sitra Causeway bridges in Bahrain and started preliminary works for the RM1.9bil Nam Theun 1 hydropower project in Laos.

With the increasing number of overseas projects, Gamuda can look forward to strong double-digit earnings growth in the coming years.

Analysts said the inclusion of the RM1.5bil new infrastructure jobs from Vietnam has raised Gamuda’s current outstanding order book of RM9.7bil to RM11.2bil – the highest in the local construction sector.

Meanwhile, the RM8bil GDV from the development of Yen So Park would provide a new stream of property earnings for Gamuda over, at least, the next five years.

Opportunities abound for foreign investors

Opportunities abound for foreign investors
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VIETNAM has become a magnet for many foreign investors keen to partake in its booming economic growth. From the construction firms to property developers and service industry players, opportunities abound for those looking to get on the “Vietnam economic bandwagon”.

Its membership in the World Trade Organisation on Jan 11 certainly bolstered its standing and marketability in the international arena and the country can look forward to more foreign direct investment (FDI) and expanding trade opportunities.

Vietnam's economy has enjoyed an annual growth of more than 7% since 2001 while its per capita income has doubled to about US$540 in the past decade. Its 8% economic growth last year was the second highest in East Asia, after China, while its annual FDI of over US$10bil, or 4% as a percentage of gross domestic product, is the highest in the region.

The demographics of Vietnam is equally promising – 60% of its population of 86 million are aged 35 and below, and this provides a ready source for the labour and bustling consumer market.

Steven Chu
Foreign investors are encouraged by the continuous improvements they see taking place in the regulatory environment for FDIs.

Gamuda Land Sdn Bhd chief operating officer Steven Chu said although most of the ongoing projects in Vietnam were financed by overseas development assistance facilities, the Vietnamese government was encouraging more private foreign investments.

“It is becoming increasingly easier to do business in Vietnam. In the property sector, we understand the government is looking into more liberalised measures to allow foreign ownership of properties,” he said.

Chu said Gamuda was serious in establishing a long-term business relationship in Vietnam and had set up offices in Hanoi and Ho Chi Minh City.

A significant part of Gamuda's target market for the Yen So Park project in Hanoi will be the expatriate community although they will be on long-term leases since foreigners are not yet allowed to buy property in Vietnam.

Chu said Gamuda would also be targeting the three million Viet Kieu community, or Vietnamese who had fled the country during the Vietnam War and had made good for themselves in their adopted countries, mostly in the US, Europe and Australia. The Viet Kieus are believed to repatriate some US$3bil to US$4bil a year back to Vietnam.

The property sector alone offers immense potential for Malaysian companies to export their expertise.

Rising urbanisation will create a growing demand for companies with expertise in township development and niche lifestyle projects.

The country's growing middle class also means that condominium living and gated and guarded housing will become increasingly popular.

Vietnam faces a severe shortage of quality residential products, Grade A office space, hotel rooms, shop offices and retail centres.

According to international property consultancy Chesterton Petty, the key drivers for the country's real estate market include overseas remittances of US$4bil a year, emerging condominium markets in key cities, conspicuous consumption and changing lifestyles, and the people's lack of access to international real estate investments.

The areas of opportunities include lifestyle residences, condominiums, offices and serviced apartments to cater to an expanding middle class and growing foreign investors and expatriates.

The price of residential properties in Vietnam has escalated to US$1,900 per sq m in Hanoi and US$2,900 in Ho Chi Minh City.

“The average price for luxury apartments is US$1,100 to US$1,900 per sq m and the occupancy rate in serviced apartments has stabilised at around 95%,” Chesterton said in a recent report on Vietnam.

A strong and stable demand for Grade A office space and a limited supply of such property have driven vacancy to less than 1%.

The retail and hotel sectors also offer good growth potential.

Rental for street-front stores in Hanoi are reaching US$120 per sq m with international branded tenants vying for space in high traffic areas.

The largest shopping centre is only 13,000 sq m with rent at US$88 per sq m. Meanwhile, supermarkets are still in short supply. The total retail sales in Vietnam have reached US$20bil last year, a 20.7% increase year-on-year.

Meanwhile, the hotel sector is also seeing much growing potential, going forward. According to the World Travel and Tourism Commission, Vietnam ranks fourth among the top 10 global tourist destinations and the number of tourists is expected to reach 25 million by 2010. – By ANGIE NG

Modern designs from recycled material

Modern designs from recycled material
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The oversized coffee table, made from mild steel and recycled merbau wood, fits comfortably with the cream-coloured sofa, armchairs, floor cushion, curtains and lampshade. Note the modern charcoal drawing by architect Peter Mohammad
Story & Photographs by Johnni Wong

Although architectural consultant Perry Tang, loves to work with recycled material like architectural salvage items, his own home is an exercise in modernity.

Despite growing up in Hong Kong and having lived 10 years in London, the designer has chosen to settle down in Penang with his wife and two daughters in a spacious apartment.

His Cantonment Court home spans 176.5sq m (1,900sq ft) and visitors will not fail to notice the expansive white marble flooring upon stepping through the front door aligned at an uncommon angle.

“I like Penang because of the island’s spaciousness … and its colonial architecture and of course, the food,” explains Tang, as I sounded incredulous at the word “spaciousness”.

Tang's workroom also reflects his preference for linearity
After graduating from the Architectural Association in London, Tang worked with the firm Foster & Partners for several years, both in London and Hong Kong.

Since living in Penang for the past eight years, Tang has dabbled in furniture design and retail.

However, his works proved a bit futuristic for the “conservative” Malaysian market, known for preferring cheap imports like pseudo Javanese Colonial furniture and Balinese design knock-offs.

He has also been commissioned for private projects including residential and commercial properties - of which, some owners have quirky ideas of their own.

The doorway to the kitchen has been widened. Note the strip of stainless steel floor covering that hides the exposed concrete
Says the 43-year-old consultant diplomatically: “I think any person who is devoted to design and has the training in design, should be willing to take up any kind of design projects.

"I take it as a challenge and I enjoy the process of designing.”

As for his own dwelling place, it is apparent that Tang has a good sense of proportion, an eye for soothing colours with a dash of drama and a feel for what’s innately stylish.

The two stainless steel cabinets were found in a scrap yard and promptly bought for about RM300 each
His 1990 spider-like Mesa Aracnida table by Spanish designer Pete Sans could only have been chosen by an artistic person.

“We didn’t do very much when we renovated,” says Tang modestly.

“Firstly, we knocked down the wall between the balcony and the kitchen and replaced it with a folding glass door.

"This is to let in more light and air into the kitchen.

“We also made the kitchen opening a lot wider.

"We replaced the old door with a giant sliding timber door to separate the dining area from the cooking area.

The apartment has two balconies with this one opening from the dining room and the other opening from the lounge

"The kitchen became a semi-open space.

“All the bathroom tiles have been replaced with 5cm by 5cm (2-inch x 2-inch) beige-coloured mosaic tiles to brighten them.

"All the bedroom floorings have been replaced with laminated flooring which is scratch-resistant.

“We tried to keep the budget within RM50,000.

"I think we saved a lot on the furniture.

"Most of the furniture were designed by myself and I used a lot of recyled material found in scrap yards.

“I would call my furniture design as ‘tropical contemporary’.

Close-up look at the timberand-glass folding doors

"For example, I designed a shoe rack with mild-steel legs matched with bamboo strips and recycled merbau wood.

“The coffee table also has mild-steel legs topped with solid planks of recycled merbau wood.

“The book shelves were designed with powder-coated mild-steel frame and MDF wooden boards.

"Even the bed is made from recycled teak floorboards.”

So, what kind of style would the London-trained designer regard his home?

“In the beginning, I didn't set up any particular style or theme for my own home.

"It was just a spontaneous response to the particular place at that particular moment.

The highly useful but inexpensive shelves made from powder-coated mild steel and MDF boards

“For design, I don't think there is a particular formula to achieve an end product like mathematics.

"The most important thing is whether you can capture the people's heart at the end.”

Feng shui

And being from Hong Kong, does he believe in feng shui or geomancy in his design philosophy?

“In my apartment, I did implement feng shui principles in my design.

“I think it is important to make feng shui blend with the design and not just dump in something that is totally out of place or alien to the scheme of things.”

The shoe rack designed by Tang with mild-steel matched with bamboo strips and recycled merbau wood
And who among the international design gurus does he most admire and hope to emulate?

“I admire architects like Alvaro Siza (Portuguese), Carlo Scarpa and Gio Ponti (both Italians).

"And of course, classic European architecture and modern designs."

What Tang’s ultimate dream house?

“ A caravan!” quips the designer, probably betraying his wanderlust personality or a Freudian slip on married life, perhaps.

Property stocks doing well

Property stocks doing well
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Property gains tax waiver, multi-billion ringgit project aid growth


PETALING JAYA: Property developers reported healthy growth for the period ended June 30, thanks to higher demand for assets in choice locations after the Government waived real property gains tax effective April 1 and launched an ambitious multi-billion ringgit redevelopment project in Johor.

Mah Sing Group Bhd and YNH Property Bhd churned out double-digit increases for the first half of their respective financial years, which met analysts’ already high expectation.

The upside surprise, however, came from smaller sized Plenitude Bhd.

The firm, which has a market value of RM400mil as at yesterday, capped off its sixth year of consecutive net profit rise with a strong performance in the last quarter.

For the year just ended (FY07), Plenitude reported a 7.8% rise in net profit to RM56.5mil, or 41.8 sen per share, on revenue of RM238.2mil.

RHB Research Institute yesterday upgraded its target price for Plenitude to RM5.08. It valued the company at 11 times to its revised profit projection in calendar year 2008.

Analysts also noted Plenitude’s solid balance sheet, backed by RM43mil cash, or 32 sen per share, as at end-June.

Recent land disposal in Johor would add RM56mil, or 41.4 sen per share, to its cash pile.

Plenitude’s Desa Tebrau project just outside Johor Baru is “the company’s juiciest story for growth,” OSK Investment bank said yesterday.

The recent entry of IKEA would add to the appeal of the township, which is already home to large retailers like Jusco and Tesco.

“The township offers the most commercial and investment sense in the Iskandar Development Region (IDR), in our view,” it said.

The 966-acre Desa Tebrau has an undeveloped landbank of 649 acres.

The stock was up 7 sen to RM2.95 yesterday.

Meanwhile, Mah Sing’s strong second quarter results continued to impress analysts. The counter was made even more attractive following the sharp price pullback in recent weeks.

“We continue to like Mah Sing in view of its unique business model, hands-on management and short turnover cycle,” SJ Securities said yesterday.

Five brokerages, including Macquarie Research and Deutsche Bank, put their fair value on the stock at between RM2.64 and RM3.15 in their latest updates.

Analysts predicted that Mah Sing’s earnings for the year ending Dec 31 (FY07) at around 15 sen per share and about 19 sen per share in FY08.

Shares in Mah Sing closed 2 sen lower at RM1.94 yesterday. It hit a record high of RM2.46 on July 31, post adjustment for bonus issue and share split exercises.

Another mid-sized player YNH Property saw its first half ended June 30 net profit jump to RM43.3mil versus RM34.6mil a year ago.

Consensus estimates projected that its full year net earnings would reach RM90mil, or about 25 sen per share.

At its closing price of RM2.48 yesterday, the stock was valued at 10 times its projected earnings for the year and a sharp discount to its revised net asset value of RM4.34.

For latest Bursa Malaysia indices, charts and other information click here
More goodies to boost property
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By Leong Hung Yee

PETALING JAYA: The Asian property industry, which has been somewhat sheltered from the effects of the US subprime debacle, has great potential to catch up with its global peers.

Analysts said investments in Asia's property market grew a healthy 40% in the three years up to 2006.

They said although the performance of the Asia-Pacific listed property developers had been on an uptrend, returns had slowed down recently.

“The Malaysian property market has been picking up over the past six months, buoyed by several government measures to spur economic growth,” an analyst said.

Another analyst at a bank-backed brokerage said: “Malaysia has a lot of plus factors as an investment destination. It has one of the best tax incentives in the region.”

A slew of incentives were introduced last December to boost the property market.

The Government's move earlier this year to waive real property gains tax (RPGT) and relax foreign ownership restrictions on residential properties priced over RM250,000 have benefited the high-end segment of residential properties, leading to the setting of new benchmark prices.

Analysts believe the low- to medium-priced property segment might be the next in line to receive a government boost in the form of incentives. They also foresee more tax incentives to revive interest in REITs (real estate investment trusts).

According to HwangDBS Vickers Research, among the possible incentives are a reduction of stamp duty and the further relaxation of foreign ownership of commercial properties.

It said property players were also expecting a revamp of the Employees Provident Fund (EPF) depositors' accounts to allow for more withdrawals and a reduction of withholding tax on distributions received from REITs.

“These incentives could improve the overall sentiment of the property sector,” the research house said in report.

HwangDBS Vickers Research added that with the relaxation of Foreign Investment Committee (FIC) requirements, removal of the cap on the number of loans foreigners could take up and the exemption from RPGT, Malaysian properties offered an attractive value proposition to investors and homeowners.

“Nowhere in Asia offers such affordable (properties) at low down-payments (5% compared with as high as 90% in Indonesia) to own properties than in Malaysia.

“We see the convergence of capital value of Malaysian properties with the regional peers after the liberal moves by the Government,” it said.

SJ Securities head of research Cheah King Yoong said potential incentives such as the temporary withdrawal of stamp duty and restructuring of EPF depositors' accounts to allow more withdrawals for property purchases could further boost the local property market.

He anticipates liberalisation to attract foreign participations to the commercial market and more incentives for the Malaysia My Second Home Programme to attract foreign retirees.

The launch of the Iskandar Development Region (IDR) blueprint in March has undoubtedly stirred up a fair bit of excitement, given the billions of ringgit that would be spent over the next few decades.

“Further incentives could be given to accelerate the developments in IDR and Northern Corridor Development Region,” Cheah said.

Hektar Asset Management Sdn Bhd chief financial officer Zalila Mohd Toon said the group believed the Government would continue to give more incentives to the overall property sector.

REITs safe investment in volatile market

REITs safe investment in volatile market


PETALING JAYA: The local property market is on an upswing, judging from the higher sales and profits achieved by a number of developers in the quarter ended June 30.

Companies like Plenitude Bhd and UM Land Bhd saw higher-than-expected earnings, while Mah Sing Group Bhd and IGB Corp Bhd posted solid growth that met analysts' already bullish forecast.

While the robust growth outlook for these companies would continue to support their share price performances, they remained susceptible to the volatility in the stock market.

For the risk-averse investor, an alternative exposure to the booming property sector can be found in real estate investment trusts (REITs).

“Given the current market volatility with rising risk premium, we are bullish on Malaysian REITs,'' RHB Research Institute said in a recent report.

Currently, there are 12 REITs listed on Bursa Malaysia with a combined market capitalisation of more than RM5bil.

Most of the assets under the REITs are commercial buildings in prime areas with strong occupancy rates.

Among the most active players is Quill Capita Trust, which recently acquired Wisma Technip and part of Plaza Mont Kiara to boost its portfolio.

Axis REIT had also announced a string of acquisitions in recent months.

Others, like Al-Hadharah Boustead REIT, offer an opportunity to invest in syariah-compliant plantation assets, while the Al-Aqar KPJ REIT was the first Islamic healthcare REIT in the world.

Analysts said the main features of local REITs are stable earnings and income growth, which make them an attractive defensive bet at times of uncertainties.

They said the downside risk for such instruments was supported by the value of their assets holdings, as well as the yields offered.

This provides the wary investor with some degree of capital protection.

According to RHB Research, most Malaysian REITs returned 90% of their distributable income as dividends to unitholders, translating into an average forecast yield of 5.3% this year, and would rise to 6.9% in 2008 and 7% in 2009.

At these rates, the REITs offer better returns compared with the average annual income from investing in 10-year government fixed-income instruments.

Local REITs' yields are also superior compared with their counterparts in Singapore, RHB Research noted, giving them a further potential for capital appreciation.

Another kicker for the sector was expected to come in the form of new incentives to be announced in the upcoming Budget 2008.

A lower withholding tax will help improve local REITs' competitiveness against their regional peers, while the industry has also asked to be allowed to invest in project developments.

Crescendo sets sights on Iskandar region

Crescendo sets sights on Iskandar region


JOHOR BARU: With the Government's plan to turn the Iskandar Development Region (IDR) into a commercial hub, Crescendo Corp Bhd will be busy in the next couple of years developing its industrial land.

Financial controller Chow Kok Hiang said demand for industrial properties in the south Johor economic zone was likely to increase soon as local and foreign manufacturers had shown interest to set up operations there since the launch of IDR in November last year.

“The company has 3,300 acres of undeveloped land in Johor, of which 2,000 acres are located within the IDR,” Chow told StarBiz.

He said in the IDR, 1,400 acres of Crescendo land had been slated for residential and 600 acres for industrial properties.

Chow said the company would give priority to developing industrial properties. This was because there was an oversupply of houses in the Johor Baru district and developers were quite cautious of launching new units, he said.

Chow Kok Hiang with a picture of one of Crescendo’s projects
He said in two to three years, the IDR and the two Integrated Resort projects in Singapore would show some progress, thus pushing up property prices in Johor Baru.

“Now is the best time to buy industrial land in the IDR as the rate is still low, even when compared with land in Shah Alam,” Chow said.

He added that with good economic performances on both sides of the Causeway, more parties would be willing to invest in manufacturing.

Chow said Crescendo was now developing its 500 acres of industrial land in Gelang Patah with an estimated gross development value of RM1.2bil.

He said its Nusa Cemerlang Industrial Park (NCIP) project in the Nusajaya township was part of the IDR and it would keep the company busy for 10 years.

So far, 25% of phase one – consisting of 146 factories – were already sold and, upon completion, NCIP would have 380 factories, Chow said.

“Singaporeans made up 60% of our buyers and we expect more small and medium companies from the republic to relocate to the Gelang Patah area,” he said.

Its proximity with Singapore and the Port of Tanjung Pelepas and easy access to the North-South Expressway make Gelang Patah attractive to investors, he added.

Singapore wants to discuss practical problems at IDR talks

Singapore wants to discuss practical problems at IDR talks

SINGAPORE: The island republic will bring up “some practical problems” with Malaysia when both sides sit down for their first joint ministerial committee meeting on the Iskandar Development Region.

Its Foreign Minister George Yeo said National Development Minister Mah Bow Tan and Transport Minister Raymond Lim will represent Singapore at the weekend meeting in Johor.

“I believe with the present spirit of cooperation and goodwill, we should be able to do something to promote easier flow between the two sides, which would be good for the IDR,” he said in a report carried by Channel NewsAsia.

“If there are no borders, then water will find its own level and a lot of the economic growth in Singapore will spill over into the IDR, which will lower our own costs.

“It will be good for Johor. It will be good for Singapore. Both sides will benefit,” Yeo added.

“The pie will grow faster and there will be plenty to be shared.

“But, of course, there is a border, there is a fence. So the water doesn't flow completely and there is a certain pressure difference, but to the extent that there is connectivity and ferocity, that is good for both sides.”

The joint ministerial committee was formed following a retreat between Malaysia Prime Minister Datuk Seri Abdullah Ahmad Badawi and Singapore Prime Minister Lee Hsien Loong in Langkawi in May.

Malaysia envisaged the IDR, a 2,217sq km area in south Johor, as a new growth area, complementing Singapore's growth, the way Shenzhen province in China complements Hong Kong. – Bernama

Get involved in growth corridors

Get involved in growth corridors

KUALA LUMPUR: The Government wants co-operatives to get involved in the country’s new growth corridors.

They should not be left out in these corridors, whether they are developed in Peninsular Malaysia or in Sabah and Sarawak, said Datuk Seri Abdullah Ahmad Badawi.

The Prime Minister said this in a speech read out by Entrepreneur Development and Cooperatives Minister Datuk Seri Mohamed Khaled Nordin at the launch of the National Cooperatives Day at the Putra World Trade Centre here yesterday.

Khaled also launched, on Abdullah’s behalf, four products to strengthen the country’s cooperative sector. They are:

·AMANAH Saham Mara for cooperatives, where cooperatives are recommended to invest in the Mara trust fund for better returns and lower risks;

·UDA cooperatives development scheme, which enables the Urban Development Authority to develop land belonging to the cooperatives in urban areas;

·BANK Rakyat representatives service, which allows the cooperatives to become agents to promote and sell the bank’s products and services and;

·A cooperatives administrative guidebook, which provides useful tips on effective management of cooperatives.

Abdullah said the Government had also upgraded the Cooperative Development Department to become the Cooperatives Commission of Malaysia, to ensure a more stable and systematic development of the cooperatives movement.

He advised cooperative leaders to not only look at cooperatives as a place to solve social problems or to increase its welfare but also as a venue to provide significant jobs.

“The cooperatives should continue to develop in order to keep up with changes and be competitive and innovative,” he said.

Speaking at a press conference later, Khaled said his ministry was paying serious attention to the development corridors.

He added that his ministry wanted to ensure that local entrepreneurs and cooperatives would be involved and benefit from the development corridors, such as the Iskandar Development Region and the Northern Corridor Economic Region.

IDR to be policed by land, air and sea

IDR to be policed by land, air and sea

JOHOR: The Iskandar Development Region will not only have state-of-the-art technology in place but will also be policed by land, air and sea.

Disclosing this, Inspector-General of Police Tan Sri Musa Hassan said a new marine base with two helicopters was being built in Tanjung Pelepas to protect the shores.

“We want to show our presence in the IDR, which will be complemented by an additional 400 policemen. The men would be deployed by October and we are also asking for more allocation to purchase additional patrol cars,” he told reporters after opening the new Sri Alam district police headquarters.

Sri Alam and Nusa Jaya are the two newly created police districts located in the IDR. It is learnt that the Johor police presently has 472 patrol cars, 220 of them in Johor Baru alone.

The IGP also said closed-circuit television cameras (CCTVs) would be installed in crime-prone areas in the IDR.

“The CCTVs will enable our men to trace and track down criminals who have committed crimes in any area in the region. All this will be in place soon. And I have instructed my men to ensure they live up to expectations.

“They must hit the streets and introduce themselves to the people and find out the problems they face in Sri Alam as well as in Nusa Jaya,” he said, adding that Johor would have a total of almost 7,000 policemen in the state by the end of the year.

Iskandar region to have 12 fire stations

Iskandar region to have 12 fire stations

JOHOR BARU: When the new fire station in Nusajaya is up, there will be a total of 12 fire stations in the Iskandar Development Region (IDR), making the area well covered in the event of fire and other emergencies.

Johor Fire and Rescue Department director Mohd Yusof Muhammad said they were in the midst of discussions with the developer on the station’s design.

“We have been allocated 10 acres (4 hectares) next to the police station. The developer is drafting the plan and we have given our input on what we need for the station,” he said.

Mohd Yusof added that the new state headquarters in Kangkar Tebrau, Johor Baru, is in the design stage.

“This one will sit on nine acres (3.6 hectares) of land,” he said, adding that new staff quarters in Kempas should be ready by the end of next year.

He also said the new fire station in Pontian had already been completed, and was scheduled to be handed over by the Public Works Department next Wednesday.

The Kota Tinggi fire station is under construction, while they are in the process of tendering for the construction of the fire station in Taman Universiti, Skudai.

Towns not under the IDR have not been left out either, with Bandar Putra, Segamat, and Timah Sari, Batu Pahat, getting new fire stations.

US$10b project in IDR

US$10b project in IDR

Mideast and Malaysian investors plan high-end integrated city


KUALA LUMPUR: A group of investors from Abu Dhabi, Kuwait, Saudi Arabia and Lebanon are expected to join Malaysian investors to develop 2,000 to 2,500 acres in the Iskandar Development Region (IDR) into a high-end integrated city.

While the initial investment in the development is projected to be more than RM3bil, the construction cost is estimated to be between US$10bil and US$12bil, according to sources.

The massive development, which will be spearheaded by investors that have transformed cities in the Middle East, is projected to be completed no later than 2015.

Sources said the land would be purchased from South Johor Investment Corp (SJIC), the developer of IDR, but jointly developed by the Middle Eastern parties and SJIC. An agreement could be inked between the parties on development, advisory services and contracting.

Mudabala Group of Abu Dhabi and the Abu Dhabi Investment Authority are said to be among the investors that would be building high-end properties in IDR. There is also talk that a big developer from Abu Dhabi would partner Putrajaya Perdana Bhd in executing part of the development.

Swan Symphony Sdn Bhd, a consortium comprising Middle Eastern, Malaysian and Singaporean investors, has proposed to buy a 50.6% stake in Putrajaya Perdana for RM390mil cash with the intention of transforming the Malaysian developer into a global construction company.

Swan Symphony is 51%-owned by the Abu Dhabi-Kuwait-Malaysia Investment Corp and 49% by Autron Investment.

Mudabala has wide-ranging investments in real estate, utilities, basic industries, energy, health and services. The investment agency owns a 5% stake in Italian carmaker Ferrari and 25% of SR Technics, one of the largest maintenance, repair and overhaul service providers in Europe.

The foreign investors are said to have a track record in getting things done fast and a penchant for glamorous projects.

Although details are sketchy, plans for the development in IDR by the Middle Eastern investors will feature high-end properties priced up to RM2,000 per sq ft.

Facilities like a high-end yacht club, high-end shopping centres and luxurious hotels are said to be on the blueprint.

An expansion of the Senai airport is also on the cards and the Government is expected to create a conducive environment for investment by foreigners.

The entire development is expected to be a tremendous boost for the local construction and building materials industry.

IDR draws US$1.2 billion investment from Middle East

IDR draws US$1.2 billion investment from Middle East

PUTRAJAYA: A group of Middle East investors inked pacts Wednesday to plow US$1.2 billion (euro880 million) into a new Malaysian economic hub, marking the first major foreign investment in the project.

The Iskandar Development Region, or IDR, in southern Johor state bordering Singapore was launched in November as a new regional growth center to woo foreign investors amid stiff competition from China and India.

Abu Dhabi state investment agency Mubadala Development Co., Kuwait Finance House and Dubai-based property developer Saraya Holdings Ltd. agreed to develop a total 2,230 acres (902 hectares) in the IDR, said state agency South Johor Investment Corp. or SJIC.

SJIC chairman Azman Mokhtar hailed the partnerships as a key catalyst to kickstart growth in the IDR zone.

Three times larger than neighboring Singapore, the zone is a major part of the government's plan to become a developed nation by 2020.

"This is a historic and strategic landmark transaction between our two regions,'' Azman said at the signing ceremony, adding that the total investment marked the single largest foreign property development in Malaysia.

The government targets an investment of US$105 billion (euro80 billion) over 20 years to develop the IDR, sprawled over 221,634 hectares (547,657 acres), into a regional business, entertainment and leisure hub.

"We are looking long term...there is tremendous potential (in Asia),'' said Mubadala Chief Executive Khaldoon Khalifa Al Mubarak.

"This will be a flagship development for the region, not just for Malaysia.''

Under the pact, Mubadala will invest US$520 million (euro380 million) to develop the lifestyle and leisure parcel comprising a golf village, an amusement bay, residential district and a medical center, SJIC said in a statement.

Al Nibras 2 Ltd., a fund managed by Kuwait Finance House, will put in US$330 million (euro241 million) to build a cultural village, it said.

Millennium International Dev. Co., a unit of Saraya, will invest US$325 million (euro237 million) in a financial hub to serve markets in Asia and for Islamic banking services, it said.

SJIC will hold 30 percent equity in the venture with each of the three groups, which are expected to make "further development investments of several multiples'' over their initial investment over a 20-year period, it added. - AP

IDR project holds huge potential

IDR project holds huge potential
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It would be a major world-class development

KUALA LUMPUR: ALDAR Properties PJSC, which is part of a consortium of Middle Eastern companies that will be investing billions of ringgit in Node 1 of the Iskandar Development Region (IDR), believes the project holds tremendous potential.

Ahmed Ali Al Sayegh, chairman of ALDAR Properties, which will act as the master planner for the development, said the IDR would be a major world-class development, given its location.

“The vision is very clear. This will be a world-class city, a place for hundreds of thousands of people to work, play and get old, get educated,'' he told a media conference yesterday.

Ahmed Ali Al Sayegh
“I think, more importantly, it will be a crossroads, a place where many cultures meet. That is clearly a Malaysian value and, hopefully, we can execute it well,'' Al Sayegh said.

Being a property development company, ALDAR Properties would bring its experience in development master planning and infrastructure design to Node 1, he said.

From participating in one of the biggest property boom markets in the world, Al Sayegh feels the IDR has the most important tenet in property.

“For real estate, it is location, location, location,'' he said.

He said following the requirement from the Malaysian Government, the project would be well planned and “will create a zone not only for working and logistics but for entertainment, education and health that will make the place very liveable”.

“We are pleased to be part of the Government's vision, a clear vision which is important for this thing to take place,'' he said.

The challenge in the IDR project would be the planning, he said, adding that what interested the consortium was sustainable development and not quick profit.

“We don't want a failure on our hands. The challenge is to look strategically and think what would be best for Malaysia, its neighbours and how we are best able to achieve it,'' he said.

Al Sayegh said local content in the project would be important as was confidence in the future.

“We are optimistic about the future, and when we calculate how much office space or residential unit we need, we forget about the normal growth. We have to plan ahead,'' he said.

As for returns, Al Sayegh said there was no set target for returns from this investment but thought it would be very rewarding in the long term.

“We believe there will be value appreciation of the land and this value will be relevant to our shareholders,'' he said.

Al Sayegh added that ALDAR Properties was looking to establish a base in this region and felt the whole region was a compelling growth story. He also said the goal of the project was not just building skyscrapers.

“We think the goal is sustainability. It means being able to roll the plan without destroying the resource base and being able to conserve energy,'' he said.

The participation of ALDAR Properties also opens avenues for further investment opportunities with Khazanah Nasional Bhd and it is looking for opportunities in this region.

“We are not in a hurry and we want to grow with our partners not only in Malaysia but the whole region,'' he said. Al Sayegh said the marketing plan for the IDR would target investors from across the world and the consortium would not ask for additional tax breaks.

“We are working within existing laws and regulations that are in place to develop the area,'' he said.

On the creation of a financial centre, he said it would complement that of Singapore’s with additional space and services especially in Islamic finance.

He added that Middle Eastern banks were looking for opportunities in Asia. So were some of the large foreign banks with expertise in Islamic banking.

Equine associate to build RM140m flyovers at PGCC

Equine associate to build RM140m flyovers at PGCC
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PENANG: Abad Naluri Sdn Bhd, an associate of Equine Capital Bhd, is spending about RM140mil to build two flyovers to connect the RM25bil Penang Global City Centre (PGCC) project with the Penang Outer Ring Road (PORR).

Equine holds a 25% stake in Abad Naluri, which is developing PGCC on the 260-site where the Penang Turf Club is now located.

Equine executive chairman Datuk Patrick Lim said the flyovers would come with underpasses.

“We are working with MHA (Malaysian Highway Authority) to determine how the flyovers, which are part of our traffic infrastructure project, could complement PORR and three other chain roads in smoothening traffic flow,” he told a media briefing.

Lim said construction work on the traffic infrastructure, which forms the first phase of PGCC, would start next year.

Datuk Patrick Lim with an artist impression of the Penang Global City Centre
“The phase will take about three years to complete,” he said, adding that its cost would be disclosed later.

Lim also said Abad Naluri would commit a substantial portion of the gross development value of PGCC for the creation of a green environment.

“About 40% of the project would be green and open spaces,” he said.

Abad Naluri would build facilities in PGCC to reduce carbon monoxide, recycle heat and treat waste, he said, adding: “These facilities will be put in place as we want to make PGCC a carbon-free city.”

Lim added that PGCC would be a “city of tomorrow”.

“We will not have the biggest or tallest tower in PGCC. We want PGCC to have good values and iconic buildings that will give it a unique identity.”

Scheduled for completion in 15 years, PGCC will have two five-star hotels, commercial and residential properties, and a state-of-the-art cultural centre.

Lim said the PGCC project would be officially launched on Sept 12.

MTM to build residential resort in Cherating

KUALA LUMPUR: The well-heeled crowd that frequently jet sets across the globe to exclusive holiday destinations can soon add Cherating to its list of playgrounds.

MTM Millennium Holdings Sdn Bhd is developing a freehold, residential resort on 2.5 acres at the seaside town that faces South China Sea.

Groundwork kicked off in mid-August and the company aims to complete the project between 20 and 24 months.

Named Casa Dal-Hanaa (loosely translated as the house of tranquillity), the gated community and low-density development comprises Mediterranean-flavoured villas (20 units) and apartment suites (49 units), with tropical landscaping.

Datuk Seri Mohamad T. Al-Ozeir with a model of the Casa Dal-Hanaa residential resort project
Executive chairman Datuk Seri Mohamad T. Al-Ozeir described the development concept as a boutique hotel catering to the niche market. Planning took two years and involved marketing research with various consultants.

“It is an opportunity for one to own a vacation or beach home, which is similar to properties in locations such as Bali, Capri and Cannes,” he told StarBiz.

The properties are targeted at young Malaysians who have studied or lived abroad and want to enjoy a certain lifestyle when they return. MTM also wants to woo foreign investors to purchase its real estate.

Casa Dal-Hanaa has a gross development value of up to RM90mil. The villas are priced RM500 to RM750 per sq ft, while the apartment suites are tagged RM400 to RM650 per sq ft.

It will offer facilities such as swimming pools, restaurants, a clubhouse and 24-hour security. MTM has sought permission from the state government to put up a marina near the project to facilitate water activities.

Pulau Ular, which is just across the residential resort, is expected to add value to the project.

Although a proper launch is only scheduled after the fasting month, Mohamad said the project had already attracted interest.

“An international company will manage and maintain the units at Casa Dal-Hanaa. We are talking with a few parties (those involved in hotel and residential management) from the US and Asia. We hope to finalise a deal before the launch,” he added.

As this is the company's maiden property development, Mohamad stressed that it wanted to create the right concept and management to attract purchasers. It is also planning a bigger project in Pahang.

LASALLE Investment Management (LIM) was the top bidder yesterday for a 99-year leasehold commercial plot next to International Plaza

LASALLE Investment Management (LIM) was the top bidder yesterday for a 99-year leasehold commercial plot next to International Plaza, with a bid of $237.2 million or $941 psf of potential gross floor area.

LIM, which bid on behalf of its LaSalle Asia Opportunity III Fund, is planning a 20-storey office development with about 200,000 sq ft net lettable area. ‘It’ll be a Grade A, ‘Gold Standard’ building,’ said LIM regional director Andrew Heithersay.

LIM managing director (Asia Pacific) Ian Mackie said: ‘We may or may not take a joint venture partner for the development.’ The office development, near Tanjong Pagar MRT station, will target occupiers looking for cheaper accommodation close to downtown, he added. The project may be completed around late 2009.

LIM’s top bid for the 27,281 sq ft plot was 7.8 per cent lower than the $1,021 psf per plot ratio that Mapletree Investments paid for a bigger site across the road last month. The price was lower as the latest site is ‘inferior in shape and size, resulting in an office development with a much smaller floor plate of around 12,000 sq ft - compared with 22,000 sq ft for the earlier site - as well as lower efficiency’, said an analyst.

A Mapletree unit was the second highest bidder at yesterday’s tender, at $800 psf ppr - 15 per cent below LIM’s price. The only other bidder, Wing Tai, offered $634 psf ppr.

CB Richard Ellis estimates that LIM’s bid reflects a break-even cost of $1,700-1,800 psf. ‘This would provide the successful bidder with a stabilised yield of around 4.5 to 5.0 per cent, based on a gross monthly rent of $9 to $10 psf,’ it said.

However, industry sources suggest LIM is looking at a $13 psf average monthly rent. The Anson Road site will be the maiden Singapore investment for the LaSalle Asia Opportunity III Fund, which is planning to make about US$12 billion worth of acquisitions over the next three to four years. ‘Singapore remains one of our primary target markets. We’re interested in all sectors - office, retail, industrial, residential and hotel,’ Mr Heithersay said.

Earlier acquisitions here by LIM for its other funds include the collective sale of Rainbow Gardens at Toh Tuck Road, and Swissotel Merchant Court hotel, as well as stakes in two hotels opening next year - Crowne Plaza Changi Airport and Ibis Bencoolen Street.

LIM, part of the Jones Lang LaSalle group and a leading real estate money management firm, yesterday also announced an A$738 million (S$926 million) acquisition, on behalf of Asia Property Fund, of a 50 per cent stake in the Westfield Doncaster mall development in Melbourne.

Urban Redevelopment Authority is offering small sub-divided landed housing plots for sale. It will auction 12 on 99-year leasehold tenure at Sembawang

FOR the first time in six years, the Urban Redevelopment Authority is offering small sub-divided landed housing plots for sale. It will auction 12 on 99-year leasehold tenure at Sembawang Road/Andrews Avenue on Oct 30.

The plots, in Phase 1 of a new landed housing estate called Sembawang Green, can be developed into a total of 57 homes - 42 terrace houses, 14 semi-detached homes and a bungalow. The sale is aimed at encouraging wider participation by smaller developers and even individuals wanting to build dream homes opposite Sembawang Park and near Sembawang Beach. The approach is similar to that taken by URA for Kew Drive in 1993-1994 and Eastwood Park in 1995-1996, both in the Bedok area, and Chuan Green in 1997-2001. The Sembawang plots range in area from 4,243 sq ft (for a two semi-detached house development), to 43,694 sq ft (for a 23 terrace-home project). All 12 plots can be developed up to three storeys.

Knight Frank director Nicholas Mak expects the terrace plots to fetch $220-250 psf of land area and the semi-detached and bungalow plots around $180-200 psf. These reflect breakeven costs of $870,000 to $930,000 per terrace house, $1.025 million to $1.1 million per semi-D and $1.5-1.6 million per bungalow.

CB Richard Ellis executive director (residential) Joseph Tan expects the terrace plots to fetch $220 to $250 psf of land area, the semi-D plots $240 to $270 psf and the sole bungalow site $260-$300 psf. Based on these bid ranges, the terrace houses could sell for about $1.0-1.1 million, the semi-Ds for $1.4-1.5 million and the bungalow for $2.6-2.8 million, according to Mr Tan.

The plots are next to the established landed housing estates of Straits Garden and Sembawang Straits Estate. URA has already put in infrastructure. A URA spokeswoman said the authority will decide on the number of phases for Sembawang Green and the number of homes in each phase after the auction of the Phase 1 plots.

Source : Business Times - 29 Aug 2007

GAMING and resorts operator Las Vegas Sands’ newly opened US$2.4 billion Venetian Macao in the Chinese territory may be the biggest single structure

GAMING and resorts operator Las Vegas Sands’ newly opened US$2.4 billion Venetian Macao in the Chinese territory may be the biggest single structure in Asia, and it may be the second biggest building in the world.

But its Marina Bay Sands (MBS) integrated resort in Singapore will be more expensive - especially now that costs could escalate by as much as 40 per cent to hit some S$5.2 billion, or about US$3.4 billion.

Speaking at a press conference here yesterday at the official opening of the Venetian Macao, Las Vegas Sands COO William Weid-ner said that it had been ’struggling to stay on budget’, but rising construction costs coupled with the refinement of design on the complicated curving structure of the hotel towers is likely to push up the overall cost of the Singapore project by between 20 and 40 per cent.

Sands beat three other bidders in a hard-fought campaign last year to clinch the licence for the Marina Bay integrated resort. The cost of MBS had previously been estimated at S$5.05 billion including S$1.3 billion for the land. Taking away the land value and factoring in a 40 per cent rise in project cost, the Marina Bay resort could come to about S$5.2 billion.

Mr Weidner was nevertheless optimistic about the opening date of the Singapore project. ‘If we keep our noses to the ground, we can open in late 2009,’ he said.

So far, Sands says it has awarded S$700 million in construction contracts for the Singapore project. A S$1 billion contract will soon be awarded to build the hotels.

Mr Weidner said that Sands was in discussions with the Singapore government on construction costs but did not disclose details. ‘The government knows where we stand,’ he said.

Unlike most casino business models, Sands will also depend on the meetings, incentives, conventions and exhibitions (Mice) business.

Giving an update, Mr Weidner said it has currently 20 major events booked at MBS up to the year 2013. For the Venetian Macao, 44 major events have been booked for the next two years, with the largest expected to attract 30,000 visitors.

But Mr Weidner does not expect the North Asia market to eat into the South Asia market. He added: ‘When they see what is available (at the Venetian Macao), it will be much easier to sell Singapore.’

Selling Macau as more than just a casino destination has not been tested in the Chinese territory but Sands hopes to attract visitors to extend their stay with attractions that include a 15,000-seat arena, a US$150 million Cirque du Soleil show and a one million sq ft mall with 350 shops.

The number of visitors to Macau has been increasing; up to 26 million people are estimated to visit the territory this year.

Indeed, demand for travel to Macau has become so intense that the Chinese government decided to place some travel restrictions on its nationals earlier this year.

Macau has benefited from a surge in mass market players from China and, interestingly, Sands’ first casino in Macau - the smaller Sands Macao - was targeted largely at this market. It was so successful that it recouped its investment within a year.

The much more expensive Venetian Macao will be targeted at the leisure and Mice segment. Although Mr Weidner would not say when it would break even, he said it expects a yield of over 20 per cent per year on its investment. He added that Sands could sell some of its assets, including the mall.

Sands will also be looking to grow its premium-play segment which currently makes up 60 per cent of its gaming revenue.

Another strategy is to expand within Asia.

Also speaking at the press conference, Sands CEO and chairman Sheldon Adelson said that it would open other integrated resorts in Asia if allowed. But he added: ‘This is not a race.’

Noting that China alone hosted 60 million Mice delegates in 2003, Mr Adelson said, ‘There are only so many events you can hold in one building.’

Property agents and owners of affected en bloc sites are eager to push pending sales

Ahead of proposed changes to the Land Titles (Strata) Act, property agents and owners of affected en bloc sites are eager to push pending sales as they may soon face bigger hurdles when the amendments become law.

Changes in en bloc sale legislation, expected to be passed in early October, are aimed at providing more transparency and safeguards to ensure all stakeholders get a fair deal.

But this means owners that want to sell en bloc will have to follow new rules, which could mean higher costs and a prolonged process.

Jones Lang LaSalle’s regional director and head of investments, Lui Seng Fatt, estimated there are some 50 en bloc sites already launched by tender or expression of interest in the market, with about half of these not having obtained consent from owners holding at least 80 per cent of share value. ‘They would have strong incentives to get through. Otherwise, if the new law kicks in… they would have higher hurdles to clear,’ Mr Lui said.

The amendment will mean that the majority consent is to be based on the area of the units in the development. This is in addition to the current requirement for consent from owners holding at least 80 per cent of share values for developments more than 10 years old, or 90 per cent for developments less than 10 years old.

En bloc deals that have not taken the area of units in the development in their definition of majority consent will have to redraft their collective sale agreement (CSA) if they fail to reach the market before the new legislation is passed. ‘If we don’t achieve the 80 per cent consent we’ll have to restart the exercise,’ said Jeremy Lake, executive director of investment properties CB Richard Ellis.

‘That’s extremely time-consuming, so it makes more sense to try to achieve the 80 per cent as quickly as possible. And for projects that are far away from it with no chance of achieving 80 per cent before the legislation sets in, we will have to review the situation.’ Mr Lake said the new legislation will encourage owners who have been ’sitting on the fence’ about selling en bloc to decide sooner rather than later.

CBRE has about five en bloc applications that have not passed the 80 per cent mark, with the level of consent obtained so far averaging 50 per cent. DTZ Debenham Tie Leung revealed that six of the en bloc deals it is handling are at various stages of signature collection, with some close to achieving 80 per cent consent.

Credo Real Estate has seven or eight projects that have not reached 80 per cent. These consultancies said that while the amendments to en bloc sale legislation will enhance clarity and transparency, they will add to costs and slow the pace of sales. For instance, owners will have to spend more hiring lawyers to witness the signing of CSAs and obtaining valuation reports, said Credo managing director Karamjit Singh.

These consultancies have received calls from concerned sellers who want to discuss the implications of the new legislation on existing en bloc procedure. DTZ director Shaun Poh said: ‘We would probably need to reassess the situation right now. For those close to the 80 per cent mark, I would advise them to hold a meeting with our lawyers to discuss the salient points of the new legislation and encourage them to push through the 80 per cent mark.’ For those far from achieving the minimum consent requirement, DTZ will meet sales committees to help them make informed decisions and redraft CSAs if need be.

While there could be a rush to collect signatures for en bloc sites ahead of the changes to the Land Titles Act, this could be followed by a lull as prospective sellers mull over the new en bloc requirements. ‘I think the bottle-neck will clear once this new legislation becomes standard operating procedure but I can see that temporarily, it will slow down the pipeline,’ Mr Lui of JLL said.

Source : Business Times - 29 Aug 2007

Proposed changes to the law will make the en bloc sale process more transparent and include safeguards to ensure that the various stakeholders

Proposed changes to the law will make the en bloc sale process more transparent and include safeguards to ensure that the various stakeholders get a fair deal.

Sales committees will have to be properly formed and elected. Collective sales agreements (CSAs) will be witnessed by lawyers who can clarify doubts and explain terms and liabilities. Even after they sign, potential sellers will have a five-day ‘cooling-off period’ during which they can change their minds. Even the definition of majority consent has been tweaked.

In the immediate future the changes, which are expected to become law in early October, could serve as a catalyst to speed up the signing of CSAs, says CB Richard Ellis executive director Jeremy Lake. ‘Otherwise it appears that everything may have to be unwound and the process restarted under the new law,’ he added.

But in the longer term, the pace at which en bloc sites have been galloping into the market may slow. This is largely because new rules and procedures - including how sales committees conduct their business - mean it could take a longer time to launch a site for sale. However, the pace of collective sale deals sealed will still depend largely on market conditions, reckons Credo Real Estate managing director Karamjit Singh, who welcomed the spirit of the changes that promote greater transparency.

Law firm Rodyk & Davidson’s partner Norman Ho said lawyers’ fees for collective sales, usually $3,000 to $4,000 per unit, could double or triple because of the extra work involved - primarily because lawyers will now be required to witness signatures and certify the monthly updates on the consent level. ‘This will also aggravate the current shortage of en bloc sale lawyers,’ Mr Ho reckons.

Agreeing, Credo’s Mr Singh said requiring lawyers to witness signatures will ‘create a bottleneck in the process’.

Like many in the industry, Mr Ho questioned the need to get lawyers to witness signatures, especially since a cooling-off period is also being introduced.

A key amendment is an additional requirement for the definition of majority consent for en bloc sale, to be based on the area of the units in the development.

The existing condition, that requires consent from owners controlling at least 80 or 90 per cent of a development’s share value - depending on whether it is more than 10 years old or less, respectively - will still apply. But a second condition will now require consent from owners of units that form 80 or 90 per cent of area in the development - again depending on its age.

This is different from the Ministry of Law’s earlier proposal in March, which had sought to peg the second condition of consent on 80 or 90 per cent of the number of units owned in the development. Feedback showed that basing the second requirement on area will mitigate bias against residential owners in a mixed development - who typically have lower share values. At the same time, the requirement would not work against commercial unit owners, especially those whose units have much larger floor areas.

Another big section in the Land Titles (Strata) (Amendment) Bill tabled for first reading in Parliament yesterday by Deputy Prime Minister and Law Minister Prof S Jayakumar governs the formation, composition, constitution and proceedings of en bloc sales committees.

A sales committee will have to be elected by more than 50 per cent of owners present at a general meeting of the management corporation before signing of the CSA may begin. Eligibility criteria of committee members are listed and the sales committee will have to convene general meetings to consider key issues such as the appointment of the property consultant and lawyer, apportionment of sales proceeds and the terms and conditions of the CSA.

The sales committee will also have to provide monthly updates - instead of every eight-weekly currently - of the consent level, to keep owners better informed.

Every launch for sale must be through a public exercise like a tender or auction. However, the sales committee can engage in follow-up negotiations with any bidder, especially if the tender/auction fails to achieve the desired price. But a sale by private treaty must be concluded within 10 weeks of the close of the tender/auction. Otherwise, the tender will have to be relaunched for sales efforts to resume.

Credo’s Mr Singh welcomed the 10-week deadline, saying it ‘instils discipline as the market has shown itself to be very dynamic’.

‘In fast-moving markets, private treaty negotiations do not give you comfort that you are dealing with the best buyer. But a tender does, because you are inviting more participants to the negotiating process rather than limiting yourself to one or two,’ he added.

A MinLaw spokesperson said: ‘The proposed amendments to the Land Titles (Strata) Act are to provide additional safeguards and to ensure more transparency for all owners, that is, the minority and majority owners, but in a way that does not make it unduly onerous to bring about an en bloc sale.’

Source : Business Times - 28 Aug 2007

A proposed amendment to the Land Titles (Strata) Act will extend en bloc sale by majority consent

A proposed amendment to the Land Titles (Strata) Act will extend en bloc sale by majority consent to five developments not covered by current legislation - Goldhill Plaza, Goldhill Shopping Centre, Katong Plaza, Roxy Square Shopping Centre and Bukit Timah Shopping Centre.

Strata title certificates were issued for the projects but the original landowner/developer retained the title certificates and instead gave long leases - at least 850 years - to buyers of units.

Owners of such units can only do an en bloc sale with unanimous consent - and the approval of the original developer, who owns the reversionary interest in the property.

But the ministry of law proposes to allow them to proceed with an en bloc sale by majority consent.

And the original developer’s consent will not be required, because if the Strata Titles Board approves an en bloc sale, he will lose all rights to the land.

DESPITE soaring property prices and good wage increases, inflation is expected to come in at between one and 2 per cent this year

DESPITE soaring property prices and good wage increases, inflation is expected to come in at between one and 2 per cent this year, Minister for Trade and Industry Lim Hng Kiang said yesterday in response to parliamentary questions on the Singapore economy.

While this expected inflation rate is an increase from the average annual rate of one per cent for the past three years, Mr Lim said that inflation is ’still very reasonable’ seeing that Singapore has been enjoying practically 16 quarters of growth.

‘The current cost pressures are reflective of our competitiveness and resultant strong economic growth,’ Mr Lim said, noting that the economy is projected to grow by 7 or 8 per cent this year. The growth has been apparent in both the manufacturing and services sectors. Overall unit labour cost increased by 5.8 per cent year-on-year in the first half of 2007 while unit business cost for manufacturing increased by 2.6 per cent.

Mr Lim also pointed out that the government had taken steps to combat immediate space constraints by introducing a supply of interim office space, along with HDB flats for rent. The ministry of national development has also published additional information on property prices and rents to keep the public and businesses better informed. More than 42,000 private residential units and 640,000 square metres of office space will be available by 2010, to help meet demand.

With regards to manpower, the minister explained that the government is planning to help more Singaporeans - like women and older workers - rejoin the workforce so as to benefit from the robust employment market. ‘Our focus is to create better jobs for Singaporeans and better opportunities to attract global talent,’ he said.

Mr Lim cited Singapore’s ranking this May by the World Competitiveness Yearbook as the second-most competitive economy overall among 55 countries, as showing that Singapore remains an attractive destination for investors, talent and tourists, even in the face of increased costs.

THE fourth listed industrial real estate investment trust (Reit) - MacarthurCook Industrial Reit - is extending its investments into offices

THE fourth listed industrial real estate investment trust (Reit) - MacarthurCook Industrial Reit - is extending its investments into offices and technology parks.

MI-Reit yesterday announced that it has agreed to buy Plot 4A, International Business Park from Eurochem Corporation (a member of Tolaram Group), for $91 million.

This is a 13-storey office park building with a basement car park located in Jurong East’s International Business Park.

MI-Reit’s first investment in offices or technology parks brings it a 20 per cent exposure to the sector.

According to Jones Lang LaSalle Research’s Asia-Pacific Property Digest for Q2 2007, business park rents grew 30 per cent in the quarter while capital values grew 8 per cent.

‘The strongest rental growth of all industrial sub-sectors will be in this sub-category, principally as a result of the tight office supply situation causing a spillover effect as Central Business District tenants relocate to suburban office parks such as the International Business Park,’ said Chris Calvert, CEO of MacarthurCook Investment Managers (Asia), which manages the Reit.

Under this sale and leaseback arrangement, Eurochem - a Singapore- based company in the petrochemical sector - will sign a head lease over the entire facility for 10 years, with an option to extend for another five years.

This will start from the date of completion, scheduled for December 2009.

Mr Calvert added that the acquisition will increase the size of the portfolio from the initial value of $316.2 million at the time of listing in April, to $407.2 million upon completion of the acquisition.

MI-Reit said the purchase will extend its average weighted lease expiry duration from 6.3 years to seven.

To be funded wholly by debt, other alternative funding sources will also be considered, said the manager.

MI-Reit’s gearing level will increase from its current 8.6 per cent to 29.1 per cent, assuming 100 per cent debt financing and that there are no other acquisitions between now and settlement of the property.

MI-Reit’s initial portfolio comprised 12 industrial assets across Singapore, the largest of which is UE Technology Park, which was acquired for $115 million.

At the date of listing, the initial properties in MI-Reit had a combined value of $316.2 million.

The Reit invests primarily in industrial real estate assets in Singapore, Japan, Hong Kong, Malaysia and China.

Last month, the Reit reported a distributable income of $3.9 million for its first quarter ended June 30 - 2.9 per cent higher than the forecast $3.8 million.

Distribution per unit (DPU) also beat expectations, coming to 1.52 cents, which was 3 per cent higher than the forecast DPU of 1.47 cents.