Abdul Ghani Confident More Investments Will Pour Into IDR
Taken from Bernama
18 Oct 07
Story By : Mohd Haikal Mohd Isa
JOHOR BAHARU, Oct 17 (Bernama) -- After successfully attracting investments of RM4.1 billion from four companies from the Gulf States in August, efforts are being continued by the Iskandar Regional Development Authority (IRDA) to attract more investors into the area.
Menteri Besar Johor Datuk Abdul Ghani Othman said the investment move by the four companies was proof of Iskandar Development Region's attraction as a major investment destination for multinational companies.
Abdul Ghani, who is co-chairman of the IDRA, the body entrusted with the development of the region, also expressed confidence that several ongoing negotiations with foreign investors will bring about more investors to the region.
Prime Minister Datuk Seri Abdullah Ahmad Badawi is the chairman of the IDRA.
"Negotiations are being carried out with several parties from Europe, US and Middle East on the possible investments in IDR. We would have to wait until end of this year or early next year for the conclusions.
"We are upbeat about the negotiations judging from the interest shown," Abdul Ghani nevertheless told Bernama in a recent interview.
On the investment amount being negotiated, he said it was significant and would complete the initial investment for IDR.
In August this year, Mubadala, Millennium International Company, a subsidiary company of Saraya Holdings, and Kuwait Finance House (KFH), all companies from the Gulf States signed an agreement with the coordinator of IDR, South Johor Investment Corporation Bhd (SJIC) to invest in the special economic development zone.
Another company from the Gulf States, Aldar Properties PJSC, will meanwhile manage the development of the IDR's first intergrated international city to be known as Node I.
Node 1 will encompass an area covering more than 892 hectares in Nusajaya.
Mubadala, KFH and Millennium, each representing their respective consortiums, have collectively invested more than US$1.2 billion on land and infrastructure for three development clusters covering a financial centre, lifestyle and entertainment zone and cultural zone in Node I.
The total of RM4.1 billion investment from the four Gulf State companies is the biggest single investment received by the IDR since it was launched in November last year. Of the invested amount, part would go for the development of infrastructure and another part to land acquisitions.
On September 24, MMC Corporation Bhd (MMC) meanwhile announced that it has signed a memorandum of understanding with Dubai World to explore the possibility of jointly developing the maritime centre.
The estimated cost for the project is RM16 bilion, which will include the petroleum zone and maritime industrial zone expected to cost RM9 billion while investments in the logistics, dry wharfs, and relevant real estate development will cost RM7 billion.
Abdul Ghani said among the incentives and support accorded to the areas to be developed include flexibility in tax for 10 years, flexibility in the conditions for equity ownership and foreign skilled workers.
He said all development plans under the investment are expected to be implemented in the next five years.
"We expect to see a diversity of investments in the various services sectors including hotels, restaurants, financial or logistics.
On Mubadala's investment in the IDR, Abdul Ghani said the company had wide experience in development projects in West Asia and Europe with its investment in the IDR being its only investment in South East Asia.
Mubadala, which is owned by the Abu Dhabi government, is involvd in various development projects in Abu Dhabi, the capital of United Arab Emirates (UAE).
When visiting Johor earlier this month, Deputy Prime MInister Datuk Seri Najib Tun Razak said the chief of Mubadala had informed him that the company had already selected an architect and chief planner to start off its project in the IDR.
Showing posts with label South Johor Economic Region (SJER). Show all posts
Showing posts with label South Johor Economic Region (SJER). Show all posts
Friday, October 19, 2007
Tuesday, May 1, 2007
Gamuda To Showcase best-of-the-best Property Devt In Johor's IDR
Gamuda To Showcase best-of-the-best Property Devt In Johor's IDR
By Jackson Sawatan
SINGAPORE, May 1 (Bernama) -- Gamuda Land, a leading property developer in Malaysia, will showcase in Singapore its "best-of-the-best" property development located in Nusajaya, a key area in Johor's Iskandar Development Region (IDR).
The development, called "Horizon Hills", will be showcased to Singaporeans at a public forum on "Real Estate Investment Forum on Malaysia's New Southern Region Growth Corridor: Introducing Horizon Hills @ Nusajaya, IDR" at the Suntec Singapore International Convention and Exhibition Centre on May 12.
The forum would be a platform to share and discuss about Malaysia's property investments, in particular residential development, with specific reference to Horizon Hills, the residential core and one of the seven signature developments of Nusajaya, Gamuda said in a statement.
"Horizon Hills is the-first-of-its-kind residential homes crafted to serve the residential needs of Nusajaya within the IDR as well as complementing Singapore's growth strategy, providing an "alternative quality of life" not readily found on the Island State."
Horizon Hills, launched on March 11, is a 1,200-acre (485ha) of freehold development, comprising about 6,000 units of residential properties with an estimated gross development value of RM2.6 billion, to be completed over the next eight to 10 years.
It is developed by Arapesona Development Sdn Bhd, a joint-venture development between Gamuda Land, the lead shareholder and UEM Land, the master developer of the 9,700ha Nusajaya.
Discussion topics will include an update on Malaysia's property market, in particular the outlook of residential properties in southern Johor and its investment opportunities given the recent relaxation of regulations and incentives for foreign purchase of properties in Malaysia, as well as the benefits of the "Malaysia, My Second Home" programme.
Nusajaya, where Horizon Hills is located, is a key flagship zone in the 2,200sq km IDR, a proposed growth region with key industrial, logistics and commercial centres in the new Southern Region Growth Corridor of Malaysia.
Admission to the forum is free. Reservation and registration can be obtained at telephone numbers 68208000 or 97390810 (Stuart Tan) in Singapore or 07-5112282 or 012-7183865 (Alex Leon) in Johor.
Also, there will be a preview of Horizon Hills at the same venue on May 13.
-- BERNAMA
By Jackson Sawatan
SINGAPORE, May 1 (Bernama) -- Gamuda Land, a leading property developer in Malaysia, will showcase in Singapore its "best-of-the-best" property development located in Nusajaya, a key area in Johor's Iskandar Development Region (IDR).
The development, called "Horizon Hills", will be showcased to Singaporeans at a public forum on "Real Estate Investment Forum on Malaysia's New Southern Region Growth Corridor: Introducing Horizon Hills @ Nusajaya, IDR" at the Suntec Singapore International Convention and Exhibition Centre on May 12.
The forum would be a platform to share and discuss about Malaysia's property investments, in particular residential development, with specific reference to Horizon Hills, the residential core and one of the seven signature developments of Nusajaya, Gamuda said in a statement.
"Horizon Hills is the-first-of-its-kind residential homes crafted to serve the residential needs of Nusajaya within the IDR as well as complementing Singapore's growth strategy, providing an "alternative quality of life" not readily found on the Island State."
Horizon Hills, launched on March 11, is a 1,200-acre (485ha) of freehold development, comprising about 6,000 units of residential properties with an estimated gross development value of RM2.6 billion, to be completed over the next eight to 10 years.
It is developed by Arapesona Development Sdn Bhd, a joint-venture development between Gamuda Land, the lead shareholder and UEM Land, the master developer of the 9,700ha Nusajaya.
Discussion topics will include an update on Malaysia's property market, in particular the outlook of residential properties in southern Johor and its investment opportunities given the recent relaxation of regulations and incentives for foreign purchase of properties in Malaysia, as well as the benefits of the "Malaysia, My Second Home" programme.
Nusajaya, where Horizon Hills is located, is a key flagship zone in the 2,200sq km IDR, a proposed growth region with key industrial, logistics and commercial centres in the new Southern Region Growth Corridor of Malaysia.
Admission to the forum is free. Reservation and registration can be obtained at telephone numbers 68208000 or 97390810 (Stuart Tan) in Singapore or 07-5112282 or 012-7183865 (Alex Leon) in Johor.
Also, there will be a preview of Horizon Hills at the same venue on May 13.
-- BERNAMA
Monday, April 30, 2007
All eyes on eastern corridor
All eyes on eastern corridor
By ELAINE ANG
WITH the Iskandar Development Region (formerly the South Johor Economic Region) kicking off rather successfully, the spotlight is now on the Petroliam Nasional Bhd (Petronas)-led Eastern Corridor Economic Region.
The eastern corridor development blueprint, which is expected to be out this quarter at the earliest, is said to be focused on the socio-economic and industrial development of the region involving Kelantan, Terengganu and Pahang.
The development of the eastern corridor, together with the northern corridor spearheaded by Sime Darby Bhd and southern corridor (Khazanah Nasional Bhd) are part of the Ninth Malaysia Plan (9MP), which has the objective of spreading economic development throughout the country.
Aseambankers Malaysia Bhd said the eastern corridor offers big potential for certain industries, especially oil and gas (O&G) and tourism.
The research outfit believes the plan would be to focus on several industrial clusters such as tourism, infrastructure/transportation, education and agro-based sectors to be anchored by the O&G industry.
Billions are expected to be poured into the region – RM22.3bil from Government coffers under the 9MP (which is a big 56% jump from the 8MP) and about RM40bil from Petronas' investments in O&G projects there.
“We expect the modus operandi of the eastern corridor development to be similar to the Iskandar Development Region in terms of the setting up of special bodies and institutions akin to the Iskandar Regional Development Authority and South Johor Investment Corp.
“This is to ensure smooth implementation, active engagements and balanced representation among the private and public sectors, Petronas (as the lead agency in the project), the federal and State Governments,” Aseambankers said.
So, what's new that could emerge from the eastern corridor development? According to Aseambankers, a new fabrication facility could be established in Terengganu to support the upstream O&G activities there.
It said capacities at all the existing fabrication yards in the country were almost full and faced constraints in undertaking new projects.
“Setting up a shipyard in Terengganu’s backyard could also lead to greater economic activities, considering that there is a massive need for offshore marine vessels to support the O&G activities there.
“We also foresee further expansion at existing seaports and the centralised tankage facilities in Kertih,” Aseambankers said.
Kelantan offers ample opportunities in terms of new infrastructure requirements to support the increasing activities in the Malaysia-Thailand Joint Development Area and potential O&G discoveries offshore Kelantan.
“We favour the idea of setting up O&G infrastructure (supply base and petrochemical site) in Kelantan similar to that of Terengganu, as it is strategically located and could potentially become a regional base for Malaysia-Thailand-Vietnam O&G activities,” Aseambankers said.
It added that a new cracker plant could be built in the region as well.
Aseambankers views the proposal to develop the eastern corridor as encouraging, timely and justified from a socio-economic perspective.
Based on socio-economic indicators, the eastern corridor, especially Terengganu and Kelantan, lag behind the other states and regions.
The eastern corridor contributed only RM30.8bil, or 12%, of Malaysia’s real gross domestic product in 2005 versus 15.6% for Sabah and Sarawak, 20% for the Northern Corridor states and 54.5% for more developed states of Selangor, the Federal Territory, Penang and Johor.
Aseambankers expect the positive developments to augur well for O&G players such as Eastern Pacific Industrial Corp Bhd, Dialog Group Bhd and Petronas Gas Bhd. Nevertheless, challenges cited include politics (Kelantan is currently under the Opposition party), execution risks and the exhaustion of resources.
Ratings Agency Malaysia Bhd group chief economist Dr Yeah Kim Leng noted that Petronas and its foreign joint-venture partners had successfully established an integrated petroleum complex at the Gebeng-Kertih area – the Petronas Petroleum Industry Complex.
“The development of the eastern corridor as the country's petrochemical hub is now well underway.
“The challenge would be to spearhead its growth into a leading petrochemical and O&G hub in the region by catalysing an inflow of investments in related industrial, commercial and infrastructure development,” he said.
He believes further expansion and deepening of the petrochemical hub will be the eastern corridor's core economic foundation and strategy for growth and industrial development.
Yeah expects the potential size of the investments, together with Petronas' ongoing capital investment in O&G exploration, development and production activities to rival those in the other corridors.
“Given Petronas' strong profits in recent years, an assumed 10% to 20% re-investment rate of after tax profits would result in an internal financing capacity of RM5bil to RM10bil annually,” he said.
By ELAINE ANG
WITH the Iskandar Development Region (formerly the South Johor Economic Region) kicking off rather successfully, the spotlight is now on the Petroliam Nasional Bhd (Petronas)-led Eastern Corridor Economic Region.
The eastern corridor development blueprint, which is expected to be out this quarter at the earliest, is said to be focused on the socio-economic and industrial development of the region involving Kelantan, Terengganu and Pahang.
The development of the eastern corridor, together with the northern corridor spearheaded by Sime Darby Bhd and southern corridor (Khazanah Nasional Bhd) are part of the Ninth Malaysia Plan (9MP), which has the objective of spreading economic development throughout the country.
Aseambankers Malaysia Bhd said the eastern corridor offers big potential for certain industries, especially oil and gas (O&G) and tourism.
The research outfit believes the plan would be to focus on several industrial clusters such as tourism, infrastructure/transportation, education and agro-based sectors to be anchored by the O&G industry.
Billions are expected to be poured into the region – RM22.3bil from Government coffers under the 9MP (which is a big 56% jump from the 8MP) and about RM40bil from Petronas' investments in O&G projects there.
“We expect the modus operandi of the eastern corridor development to be similar to the Iskandar Development Region in terms of the setting up of special bodies and institutions akin to the Iskandar Regional Development Authority and South Johor Investment Corp.
“This is to ensure smooth implementation, active engagements and balanced representation among the private and public sectors, Petronas (as the lead agency in the project), the federal and State Governments,” Aseambankers said.
So, what's new that could emerge from the eastern corridor development? According to Aseambankers, a new fabrication facility could be established in Terengganu to support the upstream O&G activities there.
It said capacities at all the existing fabrication yards in the country were almost full and faced constraints in undertaking new projects.
“Setting up a shipyard in Terengganu’s backyard could also lead to greater economic activities, considering that there is a massive need for offshore marine vessels to support the O&G activities there.
“We also foresee further expansion at existing seaports and the centralised tankage facilities in Kertih,” Aseambankers said.
Kelantan offers ample opportunities in terms of new infrastructure requirements to support the increasing activities in the Malaysia-Thailand Joint Development Area and potential O&G discoveries offshore Kelantan.
“We favour the idea of setting up O&G infrastructure (supply base and petrochemical site) in Kelantan similar to that of Terengganu, as it is strategically located and could potentially become a regional base for Malaysia-Thailand-Vietnam O&G activities,” Aseambankers said.
It added that a new cracker plant could be built in the region as well.
Aseambankers views the proposal to develop the eastern corridor as encouraging, timely and justified from a socio-economic perspective.
Based on socio-economic indicators, the eastern corridor, especially Terengganu and Kelantan, lag behind the other states and regions.
The eastern corridor contributed only RM30.8bil, or 12%, of Malaysia’s real gross domestic product in 2005 versus 15.6% for Sabah and Sarawak, 20% for the Northern Corridor states and 54.5% for more developed states of Selangor, the Federal Territory, Penang and Johor.
Aseambankers expect the positive developments to augur well for O&G players such as Eastern Pacific Industrial Corp Bhd, Dialog Group Bhd and Petronas Gas Bhd. Nevertheless, challenges cited include politics (Kelantan is currently under the Opposition party), execution risks and the exhaustion of resources.
Ratings Agency Malaysia Bhd group chief economist Dr Yeah Kim Leng noted that Petronas and its foreign joint-venture partners had successfully established an integrated petroleum complex at the Gebeng-Kertih area – the Petronas Petroleum Industry Complex.
“The development of the eastern corridor as the country's petrochemical hub is now well underway.
“The challenge would be to spearhead its growth into a leading petrochemical and O&G hub in the region by catalysing an inflow of investments in related industrial, commercial and infrastructure development,” he said.
He believes further expansion and deepening of the petrochemical hub will be the eastern corridor's core economic foundation and strategy for growth and industrial development.
Yeah expects the potential size of the investments, together with Petronas' ongoing capital investment in O&G exploration, development and production activities to rival those in the other corridors.
“Given Petronas' strong profits in recent years, an assumed 10% to 20% re-investment rate of after tax profits would result in an internal financing capacity of RM5bil to RM10bil annually,” he said.
Saturday, April 14, 2007
South Johor Economic Region (SJER)
South Johor Economic Region
South Johor Economic Region (SJER) (Malay: Wilayah Pembangunan Ekonomi Selatan Johor) is the new main southern development corridor in Johor, Malaysia. The SJER was established on 30 July 2006. It is also known as Iskandar Development Region (IDR) (Malay: Wilayah Pembangunan Iskandar) after Sultan Iskandar of Johor.
It is against this backdrop that in July 2005, the Government of Malaysia had tasked Khazanah to conduct a feasibility study for the development of a special economic zone in South Johor in what was then referred to as the Southern Belt Economic Zone (SBEZ).
In October 2005, Khazanah presented a Conceptual Outline Plan for the proposed South Johor Economic Region (SJER) to the National SJER Planning Committee (NSPC) that concluded that there was a strong economic, social and developmental rationale for the proposed development of SJER. The NSPC was chaired together by the Prime Minister of Malaysia, Abdullah Ahmad Badawi and Chief Minister of Johor, Abdul Ghani Othman. Khazanah acts as the secretariat for the committee. The NSPC further tasked Khazanah to develop a detailed and comprehensive Master Plan for the development of SJER that aims to address socio-economic development in a holistic and sustainable fashion.
In March 2006, the Ninth Malaysia Plan covering the period 2006 to 2010 was launched by the Prime Minister and inter alia. It identified SJER as one of the catalyst and high-impact developments under the Plan. This was further reinforced when in November 2006, the Prime Minister, Chief Minister of Johor and Khazanah announced further details on SJER on the following Comprehensive Development Plan (CDP):
Physical Development Strategies
Bay of Johor Bahru
Enlarge
Bay of Johor Bahru
SJER area covers 221,634.1 hectares (2,216.3 sq. km) of land area within the southern most part of Johor. The development region encompasses an area about 2 times the size of Singapore and 48 times the size of Putrajaya. SJER covers the entire district of Johor Bahru (including the island within the district), Mukim Jerang Batu, Mukim Sungai Karang, Mukim Serkat, and Kukup Island in Mukim Ayer Masin, all within the district of Pontian.
The Planning Area falls under the jurisdiction of five local planning authorities, namely: Majlis Bandaraya Johor Bahru (Johor Bahru City Council). Majlis Perbandaran Johor Bahru Tengah (Johor Bahru Tengah Municipal Council). Pihak Berkuasa Tempatan Pasir Gudang (Pasir Gudang Local Authority). Majlis Perbandaran Kulai (Kulai Municipal Council). Majlis Daerah Pontian (Pontian District Council)
Five Flagship Zones are proposed as key focal points for developments in the SJER. Four of the focal points will be located in the Nusajaya-Johor Bahru-Pasir Gudang corridor also known as the Special Economic Corridor (SEC) The flagship zones listed below are envisaged to both strengthen further existing economic clusters as well as to diversify and develop targeted growth factors.
Flagship Zone A – Johor Bahru City Centre
* Service and business district
* Free Access Zone
Flagship Zone B - Nusajaya
* Johor state administrative centre
* New financial and business district
* Multimedia Super Corridor Cyber city and Nusajaya Cyber park
* Education hub
Flagship Zone C - Western Gate Development
* Port of Tanjung Pelepas (PTP)
* RAMSAR Sites
* Second Link Free Access Zone
Flagship Zone D - Eastern Gate Development
* Pasir Gudang Port and industrial zone
* Tanjung Langsat Technopolis
* Kim-Kim Regional Park
Flagship Zone E - Senai-Skudai
* Senai International Airport
* Integrated logistic hub
* Skudai Knowledge Centre
* Senai Multimodal Terminal Hub
The Special Economic Corridor (SEC)
It is targeted that developments within SJER will initially focus on the medium term in the Nusajaya-Johor Bahru-Pasir Gudang corridor. The corridor is an established area of development with two major ports, Port of Tanjung Pelepas and Pasir Gudang, and a third oleo-chemical port at Tanjung Langsat. The area also has two major links to Singapore, the Causeway and the Linkedua (Second Link). Many of the new catalyst developments are expected to be in the relatively new and greenfield area of Nusajaya. Nusajaya houses the new state administrative centre and has been identified as an area to house several targeted new growth sectors including in education, healthcare and tourism, among others.
The SEC is envisaged to house most of the leading-edge developments in SJER including proposed Free Access Zones that will have a relatively large international component.
Economic Development Strategies
The two main economic growth sectors in SJER currently are manufacturing and services.
The key sectors in the manufacturing sector that drives the SJER economy are electrical and electronic (E&E), chemical and chemical products (petrochemical, plastics, oleo chemicals) and food processing sub-sectors. They contribute 60% of the total value-added in manufacturing.
These key sectors lead to the emergence of supporting or induced sectors such as retail, wholesale, hotels, restaurants and finance. In manufacturing, the induced sectors include fabricated metal products, non-metallic products and transportation equipment.
Strategic Economic Thrust (SET)
A combination of seven strategic economic development thrusts is needed to accelerate growth of SJER during the CDP period. The thrusts are as follows :
* strengthen the existing main economic drivers and diversity into new economic growth sectors.
* strengthen supporting industries and the basic foundation.
* strengthen international linkages.
* build on existing strength in respect of resource endowment and lever on Singapore’s strength.
* optimise spatial distribution of economic activities.
* adopt the cluster approach.
* provide the right type of incentives and support.
Future Growth Senario, 2005-2025
The future scenario for SJER should include:
* A well developed, internationally and internally integrated, strong and efficient logistic system giving it a high level of national and international accessibility and internal mobility,
* A strong base for vertically and horizontally integrated dynamic manufacturing and service clusters. With well developed external linkages to major regional and global development nodes.
* A sizeable foreign residents (about 12-15%) with high skills and income would render viable the various international class social and educational, health, recreational and other facilities that are necessary for an international class ‘life style’ which is vital to attract and retain the inflow of international investment and highly skilled managerial and professional workforce.
Social Development Strategies
The following Strategic Social Development Thrusts (SSDT) are proposed;
* SSDT 1: Enhance coordination and cohesion of all government and non-government agencies involved in social development
* SSDT 2: Build social capital as the basis for social cohesion and integration
* SSDT 3: Enhance ability of individual Bumiputra and privately owned Bumiputra companies especially Small and Medium Enterprises (SME) to acquire landed properties and enhance their property portfolio by leveraging and participating in the capital gain.
* SSDT 4: Adopt and implement regional and physical development strategies that will result in the increase in the value of Bumiputra land and also bring other benefits.
* SSDT 5: Promote more mutual funds to spread benefit of the increase in property and rental values to Bumiputra and to take out the allocated new property units not taken up by Bumiputeras.
* SSDT 6: Enhance and upgrade education and training programme at all level of skills and with the cluster associations identify critical skill categories for SJER development.
* SSDT 7: Enhance cluster linkages among major public and private sector corporations and research institutions with Bumiputera companies especially SMEs.
Livable Communities
A key thrust of SJER is to create livable communities that encompass quality housing, adequate facilities, quality services and a healthy, safe and lively environment.
In line with this objective of enhancing the city-living environment, the city must be functional, liveable and impart a sense of community and belonging. In addition, the city must also provide a clean, healthy, safe and caring environment that caters to the needs of all stakeholders. To this end the CDP plans not only for the current needs of the population but also for the future, ensuring that inter-generational equity is also sensitively addressed.
Livability in South Johor
In creating liveable communities, the following factors are to be taken into consideration:
* Integrate low cost housing developments with other types to give residents common facilities and environment and reducing social marginalization.
* Provide Rental Homes for Transient Population
* A detailed register of data, including income levels, affordability and location preferences of the Special Needs Group must be kept and constantly updated to match up with residential units offered in the market.
* New Housing developments should incorporate the needs of the disabled in the units allocated to them. These include sizes of doors, ramps for external areas, height of light switches, hand rails for bathrooms and toilets.
* Create Neighbourhood Structures that promote a sense of belonging to the local community
* Design of new developments and redevelopment of housing areas shall refer and conform to guidelines of Crime Prevention through Environmental Design (CPTED).
* The Green Building rating shall be used and implemented to encourage builders to build energy efficient buildings, including for residential units, and to introduce energy efficient mechanisms on older or existing buildings in the city.
The Physical Development Plan
The Physical Development Plan (PDP) primarily contained in this chapter of the CDP outlines the management of land use development within the planning area of SJER. The objectives are to influence, control and regulate urban activities so as to create an organically harmonious city through the control of the quality, quantity, location and timing of development and building construction activities and inducing land use development towards a desired direction.
For the CDP, the land use zoning plan will be zoned into ‘Zoning Districts’ where areas are identified based on the urban character of the area and/or function of the area instead of identifying specific land use attached to a specific lot. The zoning district system is made up of two important layerings:
* Base zoning district; and
* Special overlay zones
Base Zoning Districts
The main base zoning districts identified for SJER CDP are;
* District Centre Commercial Zone (DCC) - Refers to commercial areas located within the identified boundary of district centres. Certain activities that would normally be permissible within the Johor Bahru Central Business District (JB CBD) can be permitted in this zone. Such activities could be entertainment, 24-hour/extended opening hour activities, etc.
* Local Centre Commercial Zone (LCC) - Refers to commercial areas located within residential neighbourhoods and serves the neighbourhood area to provide small-scale retails and services. Intensity of development and type of activities permissible should be consistent with the character of the neighbourhood area in order to limit adverse impacts on nearby residential areas. It can also refer to commercial areas serving large industrial parks as in Tanjung Langsat and Senai.
* Free Access Zone (FAZ) - Subject to further approval by the SJA and other authorities, this may refer to areas that allow seamless work, business, entertainment and living environment between Johor and Singapore.
* Established Housing (EH) - Refers to existing residential areas in planned neighbourhood units.
* Residential 1 – Low Density (R1) - Low density residential refers to a gross density of nine units/acre and comprises detached and semi-detached unit homes. Village homes within urban areas that are of good quality and have proper services can also be considered as low density residential.
* Residential 2 – Medium Density (R2) - Medium density residential refers to a gross density of 24 units/acre and comprises link homes, low-rise apartments, exclusive condominiums and town houses.
* Residential 3 – Medium High Density (R3) - Medium high density refers to a gross density of 33 units/acre and comprises apartments, condominiums, and town houses.
* Residential 4 – High Density (R4) - High density residential refers to a gross density of 38 units/acre and comprises apartments or condominiums.
* Residential Villages (RV) - Refers to villages within non-urban areas.
* Mixed-use - Residential, Office, Commercial (MX) - Refers to areas zoned for mixed-use development within city centre areas such as within Johor Bahru City Centre and Nusajaya City Centre and also within Transit Planning Zones. It is intended to promote a combination of commercial and housing on the same site. It allows developments with increased intensity especially the residential component. This aims to support the strategy of encouraging city living and transit oriented development.
* Commercial Zone (CZ) - Refers to areas of commercial use and activity.
* Established Industry (IE) - Refers to existing industrial areas that are well established and still providing employment.
* Industrial Park Zone (IP) - Area zoned for planned industrial uses that are generally compatible with one another and with adjoining residential and commercial districts. Service commercial uses that are compatible with and complimenting light industrial uses should also be permitted. The intention is to promote a cluster strategy in planned industrial areas incorporating manufacturing clusters, support services, trade, storage and other service industries to facilitate towards achieving k-economy.
* Enterprise Zone (EZ) - This zone is intended to concentrate high technology industries and industries with a significant amount of research and development activity in line with a cluster strategy. Professional offices, financial institutions and other similar uses may be included when they provide services to the enterprise zone employees.
* Port Zone (PZ) - Refers to all seaport development areas i.e. namely Tanjung Langsat, Pasir Gudang and Port of Tanjung Pelepas.
* Institutional and Community Zone (INS) - Major institutional and civic uses such as art galleries, museum, government offices, palace reserve, hospitals, universities and other civic use.
* Special Security (SS) - Military reserve & emergency operations such as police headquarters.
* RAMSAR Zone (RAMZ) - Refers to sites approved by RAMSAR. These are wetlands of international importance which are of rare and unique and for conserving biological diversity. The three RAMSAR sites in SJER are Pulau Kukup, Sungai Pulai and Tanjung Piai, which are Environmental Sensitive Areas (ESA) Rank 1.
* Free Trade Zone (FTZ) - Free Trade Zone refers to an area where special tariffs, quotas and incentives are given, and where bureaucratic requirements are lowered in order to attract companies to do business or locate its business in the area and in particular in the Port of Tanjung Pelepas area.
* Public Open Space (OS) - Parks and open spaces that are amenities to the general public.
* Private Open Space (POS) - Refers to private green areas particularly golf courses.
* Forest Reserve (FR) - Refers to existing forest reserve in the SJER area which are ESA Rank 1.
* Agriculture Zone (AZ) - Refers to productive agriculture areas.
* River Reserve (RR) - Rivers and their reserves which are ESA Rank 1.
* Cemetery (C) - Refers to cemetery reserve land.
* Government Reserve (GR) - Refers to Government lands that are used for offices, institutional, etc
Special Overlay Zones
The above land use zoning districts is further overlaid with a series of overlay zones/boundaries to provide further details for specific areas requiring specific treatment and control. Examples of the special overlay district are as follows;
* Johor Bahru CBD - Refers to core commercial areas located within Johor Bahru City Centre. It provides the broadest range of uses and is most intensified in terms of commercial plot ratio and height to reflect its role as the centre of business, finance, and employment of SJER and as the capital city of Johor.
* Nusajaya Central Planning Area - Refers to the core commercial and administrative areas located within Nusajaya. It provides a broad range of uses and is intensified in terms of commercial plot ratio and densities to reflect its role as the centre of administration, business, commerce, and employment of SJER and the new growth centre within the Special Economic Corridor (SEC)
* Environmental Protection Zone - Overlay of areas identified to require further environmental control by virtue of their identification as Environmental Sensitive Areas (ESA)
* Historic Zone - Overlay of historical area boundary over the base zoning district. The intention is to provide specific controls with regards to building and land within the designated boundary.
* Coastal Zone - The coastal zone for SJER is the water of Johor Straits within the Malaysian boundary and within a 3km inland zone along the coastline of Johor Strait that also lies within the SEC.
* Highway Business District - The Highway Business District is intended to provide development opportunities for commercial uses along the highway requiring or well adapted to location on primary roads and to provide shopping areas for uses that are not generally compatible with residential districts, yet reasonably convenient to the general location of the retail market areas. Uses with the most significant visual, traffic, noise and other impacts are allowed as conditional uses.
* Transit Planning Zone - Areas within the 400m radius of rail stations where transit oriented development can be pursued.
* Water Catchment Zone - The water catchment area refers to the catchment of Sultan Iskandar Dam; that is an ESA Rank 1 and needs to be protected. Thus, all activities within the water catchment zone must be controlled and no industrial activities should be allowed.
South Johor Urbanisation
Natural and Green Environment
The Coastal Zone
Johor Bahru City Centre
Urban Infrastructure
Urban Linkage System
Transit Oriented Development
Commercial Development Initiatives
The establishment of South Johor Investment Corporation Berhad (SJIC) by Federal and State level investment agencies, Khazanah Nasional Berhad (Khazanah), the Employees Provident Fund (EPF) and Kumpulan Prasarana Rakyat Johor (KPRJ) will spearhead catalyst developments in the SJER. SJIC is a commercial entity with long term profit objectives, set up for the purpose of overseeing the development of the SJER.
SJIC, a managing entity, would be formed with the mission to create an environment for development in the SJER by mobilizing the efforts of government, private sector, international organisations and civil society. It will be the umbrella organisation of the SJER initiative.
It is a profit-motivated company to drive strategic and catalytic projects in SJER, with a long term view, set up for the purposes of raising funds to kick start and to ensure continued development of SJER. SJIC will invest in selected strategic and catalytic initiatives through shareholding stakes in joint ventures and contribution of land either through sale or lease or granting of a concession or development rights.
SJIC is an Investment Holding Company (IHC) whereby it will operate as a discretionary fund i.e. all investment decisions shall be at the sole discretion of its appointed Board of Directors (BOD). SJIC may provide bridging or mezzanine financing to catalyst projects to assist in any funding gap at the initial stages.
Participation in SJER is via investing in Project Development Vehicles (PDV). SJIC may own land banks but will not directly participate in property development or construction. It will promote strict project evaluation and selection process to ensure that the projects in SJER are successful and sustainable. SJIC may partner with major foreign players to participate in SJER via PDVs.
Strategic Catalyst Development
The current plans for the Strategic Catalyst Development include but is not limited to the following:
* waterfront development
* international mixed commercial and residential development
* leisure and destination tourism development
* international manufacturing and logistics development
* education-based development
* healthcare-based development
* iconic buildings and parks
See also
* Johor Bahru
* MSC Cyberport
* Ninth Malaysia Plan
External links
* South Johor Economic Region
South Johor Economic Region (SJER) (Malay: Wilayah Pembangunan Ekonomi Selatan Johor) is the new main southern development corridor in Johor, Malaysia. The SJER was established on 30 July 2006. It is also known as Iskandar Development Region (IDR) (Malay: Wilayah Pembangunan Iskandar) after Sultan Iskandar of Johor.
It is against this backdrop that in July 2005, the Government of Malaysia had tasked Khazanah to conduct a feasibility study for the development of a special economic zone in South Johor in what was then referred to as the Southern Belt Economic Zone (SBEZ).
In October 2005, Khazanah presented a Conceptual Outline Plan for the proposed South Johor Economic Region (SJER) to the National SJER Planning Committee (NSPC) that concluded that there was a strong economic, social and developmental rationale for the proposed development of SJER. The NSPC was chaired together by the Prime Minister of Malaysia, Abdullah Ahmad Badawi and Chief Minister of Johor, Abdul Ghani Othman. Khazanah acts as the secretariat for the committee. The NSPC further tasked Khazanah to develop a detailed and comprehensive Master Plan for the development of SJER that aims to address socio-economic development in a holistic and sustainable fashion.
In March 2006, the Ninth Malaysia Plan covering the period 2006 to 2010 was launched by the Prime Minister and inter alia. It identified SJER as one of the catalyst and high-impact developments under the Plan. This was further reinforced when in November 2006, the Prime Minister, Chief Minister of Johor and Khazanah announced further details on SJER on the following Comprehensive Development Plan (CDP):
Physical Development Strategies
Bay of Johor Bahru
Enlarge
Bay of Johor Bahru
SJER area covers 221,634.1 hectares (2,216.3 sq. km) of land area within the southern most part of Johor. The development region encompasses an area about 2 times the size of Singapore and 48 times the size of Putrajaya. SJER covers the entire district of Johor Bahru (including the island within the district), Mukim Jerang Batu, Mukim Sungai Karang, Mukim Serkat, and Kukup Island in Mukim Ayer Masin, all within the district of Pontian.
The Planning Area falls under the jurisdiction of five local planning authorities, namely: Majlis Bandaraya Johor Bahru (Johor Bahru City Council). Majlis Perbandaran Johor Bahru Tengah (Johor Bahru Tengah Municipal Council). Pihak Berkuasa Tempatan Pasir Gudang (Pasir Gudang Local Authority). Majlis Perbandaran Kulai (Kulai Municipal Council). Majlis Daerah Pontian (Pontian District Council)
Five Flagship Zones are proposed as key focal points for developments in the SJER. Four of the focal points will be located in the Nusajaya-Johor Bahru-Pasir Gudang corridor also known as the Special Economic Corridor (SEC) The flagship zones listed below are envisaged to both strengthen further existing economic clusters as well as to diversify and develop targeted growth factors.
Flagship Zone A – Johor Bahru City Centre
* Service and business district
* Free Access Zone
Flagship Zone B - Nusajaya
* Johor state administrative centre
* New financial and business district
* Multimedia Super Corridor Cyber city and Nusajaya Cyber park
* Education hub
Flagship Zone C - Western Gate Development
* Port of Tanjung Pelepas (PTP)
* RAMSAR Sites
* Second Link Free Access Zone
Flagship Zone D - Eastern Gate Development
* Pasir Gudang Port and industrial zone
* Tanjung Langsat Technopolis
* Kim-Kim Regional Park
Flagship Zone E - Senai-Skudai
* Senai International Airport
* Integrated logistic hub
* Skudai Knowledge Centre
* Senai Multimodal Terminal Hub
The Special Economic Corridor (SEC)
It is targeted that developments within SJER will initially focus on the medium term in the Nusajaya-Johor Bahru-Pasir Gudang corridor. The corridor is an established area of development with two major ports, Port of Tanjung Pelepas and Pasir Gudang, and a third oleo-chemical port at Tanjung Langsat. The area also has two major links to Singapore, the Causeway and the Linkedua (Second Link). Many of the new catalyst developments are expected to be in the relatively new and greenfield area of Nusajaya. Nusajaya houses the new state administrative centre and has been identified as an area to house several targeted new growth sectors including in education, healthcare and tourism, among others.
The SEC is envisaged to house most of the leading-edge developments in SJER including proposed Free Access Zones that will have a relatively large international component.
Economic Development Strategies
The two main economic growth sectors in SJER currently are manufacturing and services.
The key sectors in the manufacturing sector that drives the SJER economy are electrical and electronic (E&E), chemical and chemical products (petrochemical, plastics, oleo chemicals) and food processing sub-sectors. They contribute 60% of the total value-added in manufacturing.
These key sectors lead to the emergence of supporting or induced sectors such as retail, wholesale, hotels, restaurants and finance. In manufacturing, the induced sectors include fabricated metal products, non-metallic products and transportation equipment.
Strategic Economic Thrust (SET)
A combination of seven strategic economic development thrusts is needed to accelerate growth of SJER during the CDP period. The thrusts are as follows :
* strengthen the existing main economic drivers and diversity into new economic growth sectors.
* strengthen supporting industries and the basic foundation.
* strengthen international linkages.
* build on existing strength in respect of resource endowment and lever on Singapore’s strength.
* optimise spatial distribution of economic activities.
* adopt the cluster approach.
* provide the right type of incentives and support.
Future Growth Senario, 2005-2025
The future scenario for SJER should include:
* A well developed, internationally and internally integrated, strong and efficient logistic system giving it a high level of national and international accessibility and internal mobility,
* A strong base for vertically and horizontally integrated dynamic manufacturing and service clusters. With well developed external linkages to major regional and global development nodes.
* A sizeable foreign residents (about 12-15%) with high skills and income would render viable the various international class social and educational, health, recreational and other facilities that are necessary for an international class ‘life style’ which is vital to attract and retain the inflow of international investment and highly skilled managerial and professional workforce.
Social Development Strategies
The following Strategic Social Development Thrusts (SSDT) are proposed;
* SSDT 1: Enhance coordination and cohesion of all government and non-government agencies involved in social development
* SSDT 2: Build social capital as the basis for social cohesion and integration
* SSDT 3: Enhance ability of individual Bumiputra and privately owned Bumiputra companies especially Small and Medium Enterprises (SME) to acquire landed properties and enhance their property portfolio by leveraging and participating in the capital gain.
* SSDT 4: Adopt and implement regional and physical development strategies that will result in the increase in the value of Bumiputra land and also bring other benefits.
* SSDT 5: Promote more mutual funds to spread benefit of the increase in property and rental values to Bumiputra and to take out the allocated new property units not taken up by Bumiputeras.
* SSDT 6: Enhance and upgrade education and training programme at all level of skills and with the cluster associations identify critical skill categories for SJER development.
* SSDT 7: Enhance cluster linkages among major public and private sector corporations and research institutions with Bumiputera companies especially SMEs.
Livable Communities
A key thrust of SJER is to create livable communities that encompass quality housing, adequate facilities, quality services and a healthy, safe and lively environment.
In line with this objective of enhancing the city-living environment, the city must be functional, liveable and impart a sense of community and belonging. In addition, the city must also provide a clean, healthy, safe and caring environment that caters to the needs of all stakeholders. To this end the CDP plans not only for the current needs of the population but also for the future, ensuring that inter-generational equity is also sensitively addressed.
Livability in South Johor
In creating liveable communities, the following factors are to be taken into consideration:
* Integrate low cost housing developments with other types to give residents common facilities and environment and reducing social marginalization.
* Provide Rental Homes for Transient Population
* A detailed register of data, including income levels, affordability and location preferences of the Special Needs Group must be kept and constantly updated to match up with residential units offered in the market.
* New Housing developments should incorporate the needs of the disabled in the units allocated to them. These include sizes of doors, ramps for external areas, height of light switches, hand rails for bathrooms and toilets.
* Create Neighbourhood Structures that promote a sense of belonging to the local community
* Design of new developments and redevelopment of housing areas shall refer and conform to guidelines of Crime Prevention through Environmental Design (CPTED).
* The Green Building rating shall be used and implemented to encourage builders to build energy efficient buildings, including for residential units, and to introduce energy efficient mechanisms on older or existing buildings in the city.
The Physical Development Plan
The Physical Development Plan (PDP) primarily contained in this chapter of the CDP outlines the management of land use development within the planning area of SJER. The objectives are to influence, control and regulate urban activities so as to create an organically harmonious city through the control of the quality, quantity, location and timing of development and building construction activities and inducing land use development towards a desired direction.
For the CDP, the land use zoning plan will be zoned into ‘Zoning Districts’ where areas are identified based on the urban character of the area and/or function of the area instead of identifying specific land use attached to a specific lot. The zoning district system is made up of two important layerings:
* Base zoning district; and
* Special overlay zones
Base Zoning Districts
The main base zoning districts identified for SJER CDP are;
* District Centre Commercial Zone (DCC) - Refers to commercial areas located within the identified boundary of district centres. Certain activities that would normally be permissible within the Johor Bahru Central Business District (JB CBD) can be permitted in this zone. Such activities could be entertainment, 24-hour/extended opening hour activities, etc.
* Local Centre Commercial Zone (LCC) - Refers to commercial areas located within residential neighbourhoods and serves the neighbourhood area to provide small-scale retails and services. Intensity of development and type of activities permissible should be consistent with the character of the neighbourhood area in order to limit adverse impacts on nearby residential areas. It can also refer to commercial areas serving large industrial parks as in Tanjung Langsat and Senai.
* Free Access Zone (FAZ) - Subject to further approval by the SJA and other authorities, this may refer to areas that allow seamless work, business, entertainment and living environment between Johor and Singapore.
* Established Housing (EH) - Refers to existing residential areas in planned neighbourhood units.
* Residential 1 – Low Density (R1) - Low density residential refers to a gross density of nine units/acre and comprises detached and semi-detached unit homes. Village homes within urban areas that are of good quality and have proper services can also be considered as low density residential.
* Residential 2 – Medium Density (R2) - Medium density residential refers to a gross density of 24 units/acre and comprises link homes, low-rise apartments, exclusive condominiums and town houses.
* Residential 3 – Medium High Density (R3) - Medium high density refers to a gross density of 33 units/acre and comprises apartments, condominiums, and town houses.
* Residential 4 – High Density (R4) - High density residential refers to a gross density of 38 units/acre and comprises apartments or condominiums.
* Residential Villages (RV) - Refers to villages within non-urban areas.
* Mixed-use - Residential, Office, Commercial (MX) - Refers to areas zoned for mixed-use development within city centre areas such as within Johor Bahru City Centre and Nusajaya City Centre and also within Transit Planning Zones. It is intended to promote a combination of commercial and housing on the same site. It allows developments with increased intensity especially the residential component. This aims to support the strategy of encouraging city living and transit oriented development.
* Commercial Zone (CZ) - Refers to areas of commercial use and activity.
* Established Industry (IE) - Refers to existing industrial areas that are well established and still providing employment.
* Industrial Park Zone (IP) - Area zoned for planned industrial uses that are generally compatible with one another and with adjoining residential and commercial districts. Service commercial uses that are compatible with and complimenting light industrial uses should also be permitted. The intention is to promote a cluster strategy in planned industrial areas incorporating manufacturing clusters, support services, trade, storage and other service industries to facilitate towards achieving k-economy.
* Enterprise Zone (EZ) - This zone is intended to concentrate high technology industries and industries with a significant amount of research and development activity in line with a cluster strategy. Professional offices, financial institutions and other similar uses may be included when they provide services to the enterprise zone employees.
* Port Zone (PZ) - Refers to all seaport development areas i.e. namely Tanjung Langsat, Pasir Gudang and Port of Tanjung Pelepas.
* Institutional and Community Zone (INS) - Major institutional and civic uses such as art galleries, museum, government offices, palace reserve, hospitals, universities and other civic use.
* Special Security (SS) - Military reserve & emergency operations such as police headquarters.
* RAMSAR Zone (RAMZ) - Refers to sites approved by RAMSAR. These are wetlands of international importance which are of rare and unique and for conserving biological diversity. The three RAMSAR sites in SJER are Pulau Kukup, Sungai Pulai and Tanjung Piai, which are Environmental Sensitive Areas (ESA) Rank 1.
* Free Trade Zone (FTZ) - Free Trade Zone refers to an area where special tariffs, quotas and incentives are given, and where bureaucratic requirements are lowered in order to attract companies to do business or locate its business in the area and in particular in the Port of Tanjung Pelepas area.
* Public Open Space (OS) - Parks and open spaces that are amenities to the general public.
* Private Open Space (POS) - Refers to private green areas particularly golf courses.
* Forest Reserve (FR) - Refers to existing forest reserve in the SJER area which are ESA Rank 1.
* Agriculture Zone (AZ) - Refers to productive agriculture areas.
* River Reserve (RR) - Rivers and their reserves which are ESA Rank 1.
* Cemetery (C) - Refers to cemetery reserve land.
* Government Reserve (GR) - Refers to Government lands that are used for offices, institutional, etc
Special Overlay Zones
The above land use zoning districts is further overlaid with a series of overlay zones/boundaries to provide further details for specific areas requiring specific treatment and control. Examples of the special overlay district are as follows;
* Johor Bahru CBD - Refers to core commercial areas located within Johor Bahru City Centre. It provides the broadest range of uses and is most intensified in terms of commercial plot ratio and height to reflect its role as the centre of business, finance, and employment of SJER and as the capital city of Johor.
* Nusajaya Central Planning Area - Refers to the core commercial and administrative areas located within Nusajaya. It provides a broad range of uses and is intensified in terms of commercial plot ratio and densities to reflect its role as the centre of administration, business, commerce, and employment of SJER and the new growth centre within the Special Economic Corridor (SEC)
* Environmental Protection Zone - Overlay of areas identified to require further environmental control by virtue of their identification as Environmental Sensitive Areas (ESA)
* Historic Zone - Overlay of historical area boundary over the base zoning district. The intention is to provide specific controls with regards to building and land within the designated boundary.
* Coastal Zone - The coastal zone for SJER is the water of Johor Straits within the Malaysian boundary and within a 3km inland zone along the coastline of Johor Strait that also lies within the SEC.
* Highway Business District - The Highway Business District is intended to provide development opportunities for commercial uses along the highway requiring or well adapted to location on primary roads and to provide shopping areas for uses that are not generally compatible with residential districts, yet reasonably convenient to the general location of the retail market areas. Uses with the most significant visual, traffic, noise and other impacts are allowed as conditional uses.
* Transit Planning Zone - Areas within the 400m radius of rail stations where transit oriented development can be pursued.
* Water Catchment Zone - The water catchment area refers to the catchment of Sultan Iskandar Dam; that is an ESA Rank 1 and needs to be protected. Thus, all activities within the water catchment zone must be controlled and no industrial activities should be allowed.
South Johor Urbanisation
Natural and Green Environment
The Coastal Zone
Johor Bahru City Centre
Urban Infrastructure
Urban Linkage System
Transit Oriented Development
Commercial Development Initiatives
The establishment of South Johor Investment Corporation Berhad (SJIC) by Federal and State level investment agencies, Khazanah Nasional Berhad (Khazanah), the Employees Provident Fund (EPF) and Kumpulan Prasarana Rakyat Johor (KPRJ) will spearhead catalyst developments in the SJER. SJIC is a commercial entity with long term profit objectives, set up for the purpose of overseeing the development of the SJER.
SJIC, a managing entity, would be formed with the mission to create an environment for development in the SJER by mobilizing the efforts of government, private sector, international organisations and civil society. It will be the umbrella organisation of the SJER initiative.
It is a profit-motivated company to drive strategic and catalytic projects in SJER, with a long term view, set up for the purposes of raising funds to kick start and to ensure continued development of SJER. SJIC will invest in selected strategic and catalytic initiatives through shareholding stakes in joint ventures and contribution of land either through sale or lease or granting of a concession or development rights.
SJIC is an Investment Holding Company (IHC) whereby it will operate as a discretionary fund i.e. all investment decisions shall be at the sole discretion of its appointed Board of Directors (BOD). SJIC may provide bridging or mezzanine financing to catalyst projects to assist in any funding gap at the initial stages.
Participation in SJER is via investing in Project Development Vehicles (PDV). SJIC may own land banks but will not directly participate in property development or construction. It will promote strict project evaluation and selection process to ensure that the projects in SJER are successful and sustainable. SJIC may partner with major foreign players to participate in SJER via PDVs.
Strategic Catalyst Development
The current plans for the Strategic Catalyst Development include but is not limited to the following:
* waterfront development
* international mixed commercial and residential development
* leisure and destination tourism development
* international manufacturing and logistics development
* education-based development
* healthcare-based development
* iconic buildings and parks
See also
* Johor Bahru
* MSC Cyberport
* Ninth Malaysia Plan
External links
* South Johor Economic Region
Saturday, March 31, 2007
Plenitude to unveil more properties
B U S I N E S S
Saturday March 31, 2007
Plenitude to unveil more properties
By Yeow Pooi Ling
Elsie Chua with a model of the Taman Desa Tebrau project in Johor.
KUALA LUMPUR: Plenitude Bhd will be kept busy from the second half of the year as it plans several property launches.
By the fourth quarter, it intends to launch Lot 88 in Sungai Petani, which has a gross development value of RM128mil.
Executive chairman Elsie Chua said by next year's second quarter, the company was set to launch The Batai at Damansara Heights and Ferringhi Heights in Penang, which respectively covered 3.5 acres and 10.6 acres.
While noting that the property market had been soft, she said it was likely to recover in the second half of the year, especially given the recent liberalisations by the Government.
The abolishment of real property tax gains, for example, was anticipated to attract more purchasers as it provided more options and greater flexibility, Chua said in an interview.
Plenitude was also one of the beneficiaries for incentives under the Iskandar Development Region (IDR), as its Taman Desa Tebrau project in Johor formed part of the IDR, she added.
For the year ending June 30, 2007, earnings are likely to be buoyed by Tebrau City, which is within the Taman Desa Tebrau development, according to Chua.
Two out of eight serviced apartment blocks were launched last year and so far, about half the units had been taken up, Chua said, adding that the other blocks would be launched in phases next year.
The mixed development was also expected to benefit from the proposed monorail project in Johor, which would have a stop at Tebrau City, she said.
Besides the 1,088 serviced apartment units, it will also have 400,000 sq ft of retail and commercial space for leasing. Presently, Tebrau City houses the largest Jusco department store in the country.
Hypermarket Tesco is also anticipated to open within Tebrau City, given that it had signed a leasing agreement with Plenitude last year.
It would look at buying more land in Johor. “We're in a strategic position, given our strong cashflow. We're not in a rush to increase our land bank as the existing land will sustain us for 10 to 15 years,” Chua said.
OSK Securities said Plenitude made a strategic move in deferring some of its launches at Taman Desa Tebrau, as it would be able to capture larger profits from the fast growing property region in Johor.
“It will also inevitably compromise earnings expectations in the nearer term,” the brokerage said.
Given Plenitude's strong cashpile of RM36.4mil as at Dec 31, 2006, the company could afford to defer the launches for richer value creation in the longer term, it added.
Its shares were actively traded yesterday. The counter closed up 13 sen at RM2.20, which is still below its net tangible assets of RM3.58 per share. OSK estimated its revised net asset value at RM4.24 per share.
PLENITU : [Stock Watch] [News]
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* IOI plans to return RM1.37bil
* Brokerages share reasons for their top picks
* Global players courting RHB
* Analysts’ four favoured sectors
* Kuwait Finance scores a first
* Plenitude to unveil more properties
* More volatile Q2 likely, say analysts
* New on the market
* Best quarter for KLCI since 2000
* Unlocking monetary handcuff
Sponsored Links
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* Jakarta News
* Malaysia Article
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* Financial Director
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Market Watch
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Copyright © 1995-2007 Star Publications (Malaysia) Bhd (Co No 10894-D)
Managed by I.Star.
Saturday March 31, 2007
Plenitude to unveil more properties
By Yeow Pooi Ling
Elsie Chua with a model of the Taman Desa Tebrau project in Johor.
KUALA LUMPUR: Plenitude Bhd will be kept busy from the second half of the year as it plans several property launches.
By the fourth quarter, it intends to launch Lot 88 in Sungai Petani, which has a gross development value of RM128mil.
Executive chairman Elsie Chua said by next year's second quarter, the company was set to launch The Batai at Damansara Heights and Ferringhi Heights in Penang, which respectively covered 3.5 acres and 10.6 acres.
While noting that the property market had been soft, she said it was likely to recover in the second half of the year, especially given the recent liberalisations by the Government.
The abolishment of real property tax gains, for example, was anticipated to attract more purchasers as it provided more options and greater flexibility, Chua said in an interview.
Plenitude was also one of the beneficiaries for incentives under the Iskandar Development Region (IDR), as its Taman Desa Tebrau project in Johor formed part of the IDR, she added.
For the year ending June 30, 2007, earnings are likely to be buoyed by Tebrau City, which is within the Taman Desa Tebrau development, according to Chua.
Two out of eight serviced apartment blocks were launched last year and so far, about half the units had been taken up, Chua said, adding that the other blocks would be launched in phases next year.
The mixed development was also expected to benefit from the proposed monorail project in Johor, which would have a stop at Tebrau City, she said.
Besides the 1,088 serviced apartment units, it will also have 400,000 sq ft of retail and commercial space for leasing. Presently, Tebrau City houses the largest Jusco department store in the country.
Hypermarket Tesco is also anticipated to open within Tebrau City, given that it had signed a leasing agreement with Plenitude last year.
It would look at buying more land in Johor. “We're in a strategic position, given our strong cashflow. We're not in a rush to increase our land bank as the existing land will sustain us for 10 to 15 years,” Chua said.
OSK Securities said Plenitude made a strategic move in deferring some of its launches at Taman Desa Tebrau, as it would be able to capture larger profits from the fast growing property region in Johor.
“It will also inevitably compromise earnings expectations in the nearer term,” the brokerage said.
Given Plenitude's strong cashpile of RM36.4mil as at Dec 31, 2006, the company could afford to defer the launches for richer value creation in the longer term, it added.
Its shares were actively traded yesterday. The counter closed up 13 sen at RM2.20, which is still below its net tangible assets of RM3.58 per share. OSK estimated its revised net asset value at RM4.24 per share.
PLENITU : [Stock Watch] [News]
Ads by Google
Singapore Properties
Receive Free Property Listings Find the home of your Dreams
www.iHouseConnect.com
Jakarta Luxury Hotel
Hyatt - Official Site. View Rates, Book Rooms & Get Online Specials.
www.Hyatt.com
Wealth
Know what the wealthy know Think wealth not poor
www.bewealthyyou.com
More News:
Most Viewed
* IOI plans to return RM1.37bil
* Brokerages share reasons for their top picks
* Global players courting RHB
* Analysts’ four favoured sectors
* Kuwait Finance scores a first
* Plenitude to unveil more properties
* More volatile Q2 likely, say analysts
* New on the market
* Best quarter for KLCI since 2000
* Unlocking monetary handcuff
Sponsored Links
* Indonesia
* Jakarta News
* Malaysia Article
* Business Asia
* Worth Magazine
* Family Money
* Entrepreneur
* Financial Director
* Corporate Finance
* Bill Gates
Market Watch
Market Intelligence
BizWeek
Maritime
FAQ - Privacy Statement - Terms of Use - Write to Us - Site Map - Advertise with Us
Copyright © 1995-2007 Star Publications (Malaysia) Bhd (Co No 10894-D)
Managed by I.Star.
Monday, March 26, 2007
Exciting times ahead for investors
Exciting times ahead for investors
Prime Minister Datuk Seri Abdullah Ahmad Badawi's speech at the Invest Malaysia Conference 2007 on March 22.
It is a pleasure for me to once again address this annual gathering of investors, fund managers, analysts and business leaders.
This year, we’re seeing a large increase in the number of investor registrations over previous years, particularly from foreign investors.
Needless to say, I’m very glad to see the increasing participation in Invest Malaysia and would like to wish a very warm welcome to all newcomers. I take this as yet another reflection of the increasing interest in the Malaysian capital markets and in the country’s overall economic development.
While some here may be relatively new to the Malaysian investing landscape, I believe that many of us present are veterans in the field. Therefore, I am sure that you share the sense of anticipation that I have for Invest Malaysia.
I for one look forward to Invest Malaysia every year, not only for the chance to announce ‘the goods’, as you call it, but also to take stock of the nation’s economic pulse and assess the progress that has been made.
2006 was a tremendous year for the Malaysian economy. Gross Domestic Product (GDP) grew by 5.9% in 2006, surpassing the Government’s target of 5.8%, and healthily exceeding 2005’s growth of 5.2%.
Growth was broad-based, with manufacturing and services leading the way. The construction sector turned a corner in the last quarter of the year, after 10 quarters of negative growth previously.
Quite encouragingly, the effort to revitalise agriculture as an economic contributor began to bear fruit, with the sector showing strong annual growth of 6.4%.
I am also very pleased to note that the non-plantation side of agriculture is showing signs of strong improvement, growing by 5.8% last year.
With respect to trade, 2006 was a record-breaking year. Total trade broke the RM1tril mark, with exports growing at 10.3%. Malaysian exports have become more diversified, both in terms of markets and product range.
The increase in exports resulted in a strong trade surplus of RM109bil – coincidentally, our 109th month of trade surplus – and helped to increase our international reserves to US$87.3bil. (RM301.97bil) This is equivalent to 8.1 months of retained imports; and 9.1 times the short-term external debt.
The 1997-98 Asian currency crisis is one cycle behind us; the issues and challenges of that crisis have been fully resolved, and greater bullishness and optimism have taken firm root in the country. Private sector investment grew by 9.7% in 2006, higher than 2005’s 8.5%. Portfolio investments recorded a net inflow in 2006 of RM14.7bil , against an outflow of RM14.2bil in 2005. This is in line with the expansion of our stock markets and debt markets, particularly in the area of Islamic investments.
At the same time, the Government continued to strengthen its fiscal base. Some time ago I said that the most difficult task I faced as Prime Minister was reducing the budget deficit. Alhamdulillah, we have succeeded in bringing the deficit under control without sacrificing growth. The deficit was at a credible 3.5% of GDP last year, a significant improvement from 5.3% of GDP in 2003.
The message conveyed by the numbers is therefore clear: Malaysia continues to enhance its competitiveness and resilience, continues to strengthen its presence in global trade, and continues to move up the economic value chain. In short, there is abundant reason to be positive and confident about Malaysia’s economic situation, despite the recent volatility in global capital markets.
I understand that this may be somewhat easier for me to say – my work horizon is marked in years and not by the day’s close in trading. But in all seriousness, as someone who sees the long view and the big picture, I see the achievements of 2006 as a chapter in a steadily progressing story.
I see the results as outcomes of seeds sown in earlier years. I see the fundamentals underneath the noise, and I see the work being poured into improving the health of these basics. Indeed, I see continuous improvements in the whole country, as we continue to value add on our achievements.
Ladies and gentlemen, one very important fundamental that we have relentlessly pursued is to allow and enable the private sector to be the main driver of the country’s economy. In light of this, a major goal of my Government is to increase private sector investment, a goal amply reflected in the strategies within the Ninth Malaysia Plan.
One of the key strategic thrusts of the 9MP is to increase opportunities for new investments by opening up new locations and playing to the locations’ strengths. This massive and exciting undertaking is now clearly underway with the launching of the Iskandar Development Region or IDR in South Johor, soon to be followed by the inauguration of the Northern Corridor Economic Region, the East Coast Corridor, the Sabah Corridor and the Sarawak Corridor.
The opening up of these new economic regions, in a concerted and systematic manner, will literally change the face of the country. Potential that has gone unrealised or under-optimised will be turned into new industries and businesses, new value creation and new jobs.
To demonstrate the Government’s commitment, more than RM4bil has already been allocated under the 9MP towards infrastructure development in the IDR, This will go towards hard infrastructure – such as new highways, sewerage systems and river cleaning – as well as soft infrastructure – such as strengthening security in the region. The natural potential of the region, strengthened by the Government’s commitment to infrastructure and other enablers, has already attracted early interest. The first batch of investments worth approximately RM4bil is currently being finalised. We expect that interest in the region to grow even further with today’s announcement of a specially tailored incentive and support package.
Another programme under the theme of private sector investment is the much-debated and much-analysed government-linked company (GLC) transformation initiative, led by the Government and by the government-linked investment companies (GLIC). Judging by the loss of hair on several GLIC and GLC heads, I can safely say that this is also, without overstatement, a massive undertaking. Turning around such large, legacy-ridden entities, whilst battling scepticism and criticism, is not a job for the faint-hearted.
I am therefore happy to see that the work is starting to show results. This is a fact. The numbers show that GLCs as a group now perform significantly better than they did before 2004 when the programme started. Most GLCs have either met or exceeded their key performance indicators (KPIs). The market, as represented by many of you here today, has also responded positively. The 20 leading GLCs show total shareholder return of 71.8% since May 2004, outperforming the KLCI by 4.1%. The market value of these 20 firms has also gone up by some RM83bil.
Tangibly, we see GLCs such as CIMB, Tenaga Nasional and TM reporting record levels of corporate earnings while others such as Malaysia Airlines are achieving much needed operational improvements. Exciting mergers such as CIMB and the upcoming synergy drive will also provide the consolidation required towards creating regional champions.
The GLC transformation story is by no means over, in fact it has only begun. But we have cause to feel positive about the progress made so far and cause to give due recognition to those who have worked hard to effect change.
Meanwhile, previous measures announced at Invest Malaysia are also having a positive impact. The implementation of disclosure-based regulations was well received, without deterioration in enforcement as demonstrated by the Securities Commission’s (SC) firm actions. Service delivery has also improved in the SC, which has more than halved the time frames for listing approvals and rights issues, amongst other processes. The introduction of foreign brokers has contributed to improved industry standards, whilst the domestic investment banks framework has promoted the establishment of competitive local entities. Meanwhile, the recent introduction of regulated short-selling and securities borrowing and lending has shown our commitment in ensuring that the Malaysian securities markets meet international standards for market quality.
The competitiveness and efficiency of Malaysia’s capital markets is a top priority and a few new measures have, and will be taken to achieve these objectives. Bursa Malaysia will be introducing new rules to enable and regulate direct market access, which will improve trading efficiency and increase value added trading activity on the exchange. In addition, to strengthen Malaysia’s position as an international Islamic financial centre, I am pleased to announce that the SC and the Dubai Financial Services Authority are establishing a mutual recognition regime to facilitate the cross border marketing of Islamic funds between Malaysia and Dubai.
To increase liquidity in the equity market, the Government will continue with the programme to reduce its stakes in GLCs that have a high concentration of government-linked ownership. To avoid exaggerated market disruptions and to allow for strategic tie-ups, this process will be undertaken in an orderly manner through a combination of private placements and structured commitments to sell, such as through Khazanah’s recent issuances of Plus and TM exchangeable bonds.
I am also pleased to announce the establishment of exchange traded funds (ETF), which will be listed on Bursa Malaysia by the end of this year. The GLICs will participate in the ETF by selling a portion of their portfolios in exchange for units in the ETF. The ETF will collectively have an initial fund size of at least RM3.5bil. As such, I am confident that the ETF will help add liquidity and promote greater retail participation in the equity market.
Apart from improvements to the capital markets, work and attention on the real sectors of the economy continue. In doing so, the Government’s approach is to focus on providing the enabling environment to attract new private sector and foreign direct investment. Emphasis will be placed on projects or industries which can act as catalysts to subsequent investments and expansion in the regions concerned.
I am therefore pleased to announce that the Government is offering a new package of incentives, starting with certain zones within the Iskandar Development Region.
This will be the first incentive package announced for IDR. Qualifying companies in six targeted sectors, namely creative industries, educational services, financial advisory and consulting, healthcare, logistics and tourism related services will be eligible for the following fiscal incentives:
lFirstly, exemptions from corporate income tax for activities within these zones and outside Malaysia, for 10 years upon commencement of operations; and
lSecondly, exemptions from withholding tax on certain payments for 10 years upon commencement of operations, provided that such operations commence before the end of 2015.
Furthermore, qualifying companies will enjoy:
lFirstly, exemption from foreign investment committee (FIC) rules;
lSecondly, freedom to source capital globally; and
lThirdly, unrestricted employment of foreign employees within the approved zones.
Further details of the incentive and support package will be announced in due course by the one-stop-centre Iskandar Regional Development Authority (IRDA).
With the growth of other commercial hubs around the world, competition for global investment will become increasingly intense. As such, the Government will continue to review this package of incentives to ensure that the IDR maintains its competitive edge.
Besides moving forward in the IDR, the Government has taken a number of concrete steps to enhance inflows and transactions into the national property sector.
For example, the relaxation of FIC rules to enable foreigners to purchase residential properties above RM250,000 without FIC approval, was received very positively.
Based on feedback received, the state governments were also told to provide the same relaxation for purchases of residential property.
Going forward, to further improve the national property sector, the Government has decided not to impose real property gains tax throughout the country commencing April 1 2007.
This is long-awaited news for developers and investors alike, and I hope that it will inject more excitement and dynamism into both the property and the financial sectors.
These decisions are some of the immediate action plans designed to increase as well as facilitate investment in Malaysia.
At the same time, the long-term imperative to improve the overall investment climate remains. In this context, improvement of public services delivery continues to be an important objective. On April 13, 2007, I will be making a major announcement on public service delivery improvements as they relate to local government authorities.
In addition, the recently-established special taskforce to facilitate businesses, or pemudah, will be effecting the first phase of change within the next six months.
Investment and growth will also become increasingly contingent on the availability of high-quality human capital. Towards this end, the Government has launched the Education Blueprint which sets out to raise the intellectual capacity, creativity and values of our young people. The Government will also ensure that stronger industry-academia links are forged at the tertiary level and that our graduates are equipped with the necessary skills demanded by the market. Work to enhance research and development (R&D) and innovation in the country will be intensified.
In implementing change, be it immediate-term measures or long-term policies, the Government stands guided by the five thrusts of the National Mission and we are driven by the overall goal of achieving Vision 2020.
This requires an informed perspective of the country’s past and an appreciation of its aspirations for the future. It also requires a strong sense of commitment for the nation-building effort.
In other words, ladies and gentlemen, it is the work of a long-term government – with long-range planning and long-term execution. And as a Government elected since the country’s independence in 1957, we are equal to the task. We will continue to work hard to deliver on all our promises to the people.
After all, achieving Vision 2020 is a marathon, and not a sprint. With constant and effective implementation, I am sure that we will successfully pass milestone upon milestone along the way.
In this context, I believe that 2007 will be another successful year for Malaysia, Insya-allah. As the 50th year of our Independence, as well as Visit Malaysia 2007 holds much meaning and promise on so many different levels. 2007 will be a major milestone and will set the tone for growth and change in the future. We are resolute in this matter; we have the direction; we possess the will; and we are determined to stay the course and continue moving ahead.
Thank you.
Prime Minister Datuk Seri Abdullah Ahmad Badawi's speech at the Invest Malaysia Conference 2007 on March 22.
It is a pleasure for me to once again address this annual gathering of investors, fund managers, analysts and business leaders.
This year, we’re seeing a large increase in the number of investor registrations over previous years, particularly from foreign investors.
Needless to say, I’m very glad to see the increasing participation in Invest Malaysia and would like to wish a very warm welcome to all newcomers. I take this as yet another reflection of the increasing interest in the Malaysian capital markets and in the country’s overall economic development.
While some here may be relatively new to the Malaysian investing landscape, I believe that many of us present are veterans in the field. Therefore, I am sure that you share the sense of anticipation that I have for Invest Malaysia.
I for one look forward to Invest Malaysia every year, not only for the chance to announce ‘the goods’, as you call it, but also to take stock of the nation’s economic pulse and assess the progress that has been made.
2006 was a tremendous year for the Malaysian economy. Gross Domestic Product (GDP) grew by 5.9% in 2006, surpassing the Government’s target of 5.8%, and healthily exceeding 2005’s growth of 5.2%.
Growth was broad-based, with manufacturing and services leading the way. The construction sector turned a corner in the last quarter of the year, after 10 quarters of negative growth previously.
Quite encouragingly, the effort to revitalise agriculture as an economic contributor began to bear fruit, with the sector showing strong annual growth of 6.4%.
I am also very pleased to note that the non-plantation side of agriculture is showing signs of strong improvement, growing by 5.8% last year.
With respect to trade, 2006 was a record-breaking year. Total trade broke the RM1tril mark, with exports growing at 10.3%. Malaysian exports have become more diversified, both in terms of markets and product range.
The increase in exports resulted in a strong trade surplus of RM109bil – coincidentally, our 109th month of trade surplus – and helped to increase our international reserves to US$87.3bil. (RM301.97bil) This is equivalent to 8.1 months of retained imports; and 9.1 times the short-term external debt.
The 1997-98 Asian currency crisis is one cycle behind us; the issues and challenges of that crisis have been fully resolved, and greater bullishness and optimism have taken firm root in the country. Private sector investment grew by 9.7% in 2006, higher than 2005’s 8.5%. Portfolio investments recorded a net inflow in 2006 of RM14.7bil , against an outflow of RM14.2bil in 2005. This is in line with the expansion of our stock markets and debt markets, particularly in the area of Islamic investments.
At the same time, the Government continued to strengthen its fiscal base. Some time ago I said that the most difficult task I faced as Prime Minister was reducing the budget deficit. Alhamdulillah, we have succeeded in bringing the deficit under control without sacrificing growth. The deficit was at a credible 3.5% of GDP last year, a significant improvement from 5.3% of GDP in 2003.
The message conveyed by the numbers is therefore clear: Malaysia continues to enhance its competitiveness and resilience, continues to strengthen its presence in global trade, and continues to move up the economic value chain. In short, there is abundant reason to be positive and confident about Malaysia’s economic situation, despite the recent volatility in global capital markets.
I understand that this may be somewhat easier for me to say – my work horizon is marked in years and not by the day’s close in trading. But in all seriousness, as someone who sees the long view and the big picture, I see the achievements of 2006 as a chapter in a steadily progressing story.
I see the results as outcomes of seeds sown in earlier years. I see the fundamentals underneath the noise, and I see the work being poured into improving the health of these basics. Indeed, I see continuous improvements in the whole country, as we continue to value add on our achievements.
Ladies and gentlemen, one very important fundamental that we have relentlessly pursued is to allow and enable the private sector to be the main driver of the country’s economy. In light of this, a major goal of my Government is to increase private sector investment, a goal amply reflected in the strategies within the Ninth Malaysia Plan.
One of the key strategic thrusts of the 9MP is to increase opportunities for new investments by opening up new locations and playing to the locations’ strengths. This massive and exciting undertaking is now clearly underway with the launching of the Iskandar Development Region or IDR in South Johor, soon to be followed by the inauguration of the Northern Corridor Economic Region, the East Coast Corridor, the Sabah Corridor and the Sarawak Corridor.
The opening up of these new economic regions, in a concerted and systematic manner, will literally change the face of the country. Potential that has gone unrealised or under-optimised will be turned into new industries and businesses, new value creation and new jobs.
To demonstrate the Government’s commitment, more than RM4bil has already been allocated under the 9MP towards infrastructure development in the IDR, This will go towards hard infrastructure – such as new highways, sewerage systems and river cleaning – as well as soft infrastructure – such as strengthening security in the region. The natural potential of the region, strengthened by the Government’s commitment to infrastructure and other enablers, has already attracted early interest. The first batch of investments worth approximately RM4bil is currently being finalised. We expect that interest in the region to grow even further with today’s announcement of a specially tailored incentive and support package.
Another programme under the theme of private sector investment is the much-debated and much-analysed government-linked company (GLC) transformation initiative, led by the Government and by the government-linked investment companies (GLIC). Judging by the loss of hair on several GLIC and GLC heads, I can safely say that this is also, without overstatement, a massive undertaking. Turning around such large, legacy-ridden entities, whilst battling scepticism and criticism, is not a job for the faint-hearted.
I am therefore happy to see that the work is starting to show results. This is a fact. The numbers show that GLCs as a group now perform significantly better than they did before 2004 when the programme started. Most GLCs have either met or exceeded their key performance indicators (KPIs). The market, as represented by many of you here today, has also responded positively. The 20 leading GLCs show total shareholder return of 71.8% since May 2004, outperforming the KLCI by 4.1%. The market value of these 20 firms has also gone up by some RM83bil.
Tangibly, we see GLCs such as CIMB, Tenaga Nasional and TM reporting record levels of corporate earnings while others such as Malaysia Airlines are achieving much needed operational improvements. Exciting mergers such as CIMB and the upcoming synergy drive will also provide the consolidation required towards creating regional champions.
The GLC transformation story is by no means over, in fact it has only begun. But we have cause to feel positive about the progress made so far and cause to give due recognition to those who have worked hard to effect change.
Meanwhile, previous measures announced at Invest Malaysia are also having a positive impact. The implementation of disclosure-based regulations was well received, without deterioration in enforcement as demonstrated by the Securities Commission’s (SC) firm actions. Service delivery has also improved in the SC, which has more than halved the time frames for listing approvals and rights issues, amongst other processes. The introduction of foreign brokers has contributed to improved industry standards, whilst the domestic investment banks framework has promoted the establishment of competitive local entities. Meanwhile, the recent introduction of regulated short-selling and securities borrowing and lending has shown our commitment in ensuring that the Malaysian securities markets meet international standards for market quality.
The competitiveness and efficiency of Malaysia’s capital markets is a top priority and a few new measures have, and will be taken to achieve these objectives. Bursa Malaysia will be introducing new rules to enable and regulate direct market access, which will improve trading efficiency and increase value added trading activity on the exchange. In addition, to strengthen Malaysia’s position as an international Islamic financial centre, I am pleased to announce that the SC and the Dubai Financial Services Authority are establishing a mutual recognition regime to facilitate the cross border marketing of Islamic funds between Malaysia and Dubai.
To increase liquidity in the equity market, the Government will continue with the programme to reduce its stakes in GLCs that have a high concentration of government-linked ownership. To avoid exaggerated market disruptions and to allow for strategic tie-ups, this process will be undertaken in an orderly manner through a combination of private placements and structured commitments to sell, such as through Khazanah’s recent issuances of Plus and TM exchangeable bonds.
I am also pleased to announce the establishment of exchange traded funds (ETF), which will be listed on Bursa Malaysia by the end of this year. The GLICs will participate in the ETF by selling a portion of their portfolios in exchange for units in the ETF. The ETF will collectively have an initial fund size of at least RM3.5bil. As such, I am confident that the ETF will help add liquidity and promote greater retail participation in the equity market.
Apart from improvements to the capital markets, work and attention on the real sectors of the economy continue. In doing so, the Government’s approach is to focus on providing the enabling environment to attract new private sector and foreign direct investment. Emphasis will be placed on projects or industries which can act as catalysts to subsequent investments and expansion in the regions concerned.
I am therefore pleased to announce that the Government is offering a new package of incentives, starting with certain zones within the Iskandar Development Region.
This will be the first incentive package announced for IDR. Qualifying companies in six targeted sectors, namely creative industries, educational services, financial advisory and consulting, healthcare, logistics and tourism related services will be eligible for the following fiscal incentives:
lFirstly, exemptions from corporate income tax for activities within these zones and outside Malaysia, for 10 years upon commencement of operations; and
lSecondly, exemptions from withholding tax on certain payments for 10 years upon commencement of operations, provided that such operations commence before the end of 2015.
Furthermore, qualifying companies will enjoy:
lFirstly, exemption from foreign investment committee (FIC) rules;
lSecondly, freedom to source capital globally; and
lThirdly, unrestricted employment of foreign employees within the approved zones.
Further details of the incentive and support package will be announced in due course by the one-stop-centre Iskandar Regional Development Authority (IRDA).
With the growth of other commercial hubs around the world, competition for global investment will become increasingly intense. As such, the Government will continue to review this package of incentives to ensure that the IDR maintains its competitive edge.
Besides moving forward in the IDR, the Government has taken a number of concrete steps to enhance inflows and transactions into the national property sector.
For example, the relaxation of FIC rules to enable foreigners to purchase residential properties above RM250,000 without FIC approval, was received very positively.
Based on feedback received, the state governments were also told to provide the same relaxation for purchases of residential property.
Going forward, to further improve the national property sector, the Government has decided not to impose real property gains tax throughout the country commencing April 1 2007.
This is long-awaited news for developers and investors alike, and I hope that it will inject more excitement and dynamism into both the property and the financial sectors.
These decisions are some of the immediate action plans designed to increase as well as facilitate investment in Malaysia.
At the same time, the long-term imperative to improve the overall investment climate remains. In this context, improvement of public services delivery continues to be an important objective. On April 13, 2007, I will be making a major announcement on public service delivery improvements as they relate to local government authorities.
In addition, the recently-established special taskforce to facilitate businesses, or pemudah, will be effecting the first phase of change within the next six months.
Investment and growth will also become increasingly contingent on the availability of high-quality human capital. Towards this end, the Government has launched the Education Blueprint which sets out to raise the intellectual capacity, creativity and values of our young people. The Government will also ensure that stronger industry-academia links are forged at the tertiary level and that our graduates are equipped with the necessary skills demanded by the market. Work to enhance research and development (R&D) and innovation in the country will be intensified.
In implementing change, be it immediate-term measures or long-term policies, the Government stands guided by the five thrusts of the National Mission and we are driven by the overall goal of achieving Vision 2020.
This requires an informed perspective of the country’s past and an appreciation of its aspirations for the future. It also requires a strong sense of commitment for the nation-building effort.
In other words, ladies and gentlemen, it is the work of a long-term government – with long-range planning and long-term execution. And as a Government elected since the country’s independence in 1957, we are equal to the task. We will continue to work hard to deliver on all our promises to the people.
After all, achieving Vision 2020 is a marathon, and not a sprint. With constant and effective implementation, I am sure that we will successfully pass milestone upon milestone along the way.
In this context, I believe that 2007 will be another successful year for Malaysia, Insya-allah. As the 50th year of our Independence, as well as Visit Malaysia 2007 holds much meaning and promise on so many different levels. 2007 will be a major milestone and will set the tone for growth and change in the future. We are resolute in this matter; we have the direction; we possess the will; and we are determined to stay the course and continue moving ahead.
Thank you.
Johor to streamline southern projects
Johor to streamline southern projects
By TEH ENG HOCK
JOHOR BARU: The state government will streamline all developments in the southern region of the state so that it is inline with the Southern Johor Economic Region (SJER) master plan.
Mentri Besar Datuk Abdul Ghani Othman said the move was necessary to help the government investment arm Khazanah Nasional better understand the development of the area under SJER.
This includes the development planned by Johor Corporation (JCorp) so that all plans are coordinated and do not overlap in the SJER. JCorp has many huge projects in southern Johor, with the bulk in the Johor Baru city centre and Pasir Gudang.
“In order to get a master plan, I propose that JCorp’s current plans are inserted into the SJER.
“I have taken the initiative to bring this to the attention of the Prime Minister because I feel that Khazanah might not collect adequate information on the ongoing plans in Southern Johor,” he said.
The SJER development involves an area spanning 2,000km including Pontian, Kulai, Johor Baru and Pasir Gudang. JCorp projects include the Pesada International Convention Centre in Johor Baru and palm oil-based Biofuel Park in Tanjung Langsat.
Abdul Ghani, who is also JCorp chairman, was speaking to reporters after pledging RM200mil of waqaf in the form of shares to Kumpulan Waqaf An Nur Berhad.
The shares are from JCorp’s subsidiary companies Kulim (M) Bhd, KPJ Healthcare Bhd and Johor Land Bhd.
Claiming that JCorp is the first corporate company in the world to pledge waqaf via shares, Abdul Ghani said Kumpulan Waqaf An Nur now holds 4.67% of Kulim (RM142mil), 9.25% of KPJ Healthcare (RM45mil) and 3.54% of Johor Land (RM13mil).
By TEH ENG HOCK
JOHOR BARU: The state government will streamline all developments in the southern region of the state so that it is inline with the Southern Johor Economic Region (SJER) master plan.
Mentri Besar Datuk Abdul Ghani Othman said the move was necessary to help the government investment arm Khazanah Nasional better understand the development of the area under SJER.
This includes the development planned by Johor Corporation (JCorp) so that all plans are coordinated and do not overlap in the SJER. JCorp has many huge projects in southern Johor, with the bulk in the Johor Baru city centre and Pasir Gudang.
“In order to get a master plan, I propose that JCorp’s current plans are inserted into the SJER.
“I have taken the initiative to bring this to the attention of the Prime Minister because I feel that Khazanah might not collect adequate information on the ongoing plans in Southern Johor,” he said.
The SJER development involves an area spanning 2,000km including Pontian, Kulai, Johor Baru and Pasir Gudang. JCorp projects include the Pesada International Convention Centre in Johor Baru and palm oil-based Biofuel Park in Tanjung Langsat.
Abdul Ghani, who is also JCorp chairman, was speaking to reporters after pledging RM200mil of waqaf in the form of shares to Kumpulan Waqaf An Nur Berhad.
The shares are from JCorp’s subsidiary companies Kulim (M) Bhd, KPJ Healthcare Bhd and Johor Land Bhd.
Claiming that JCorp is the first corporate company in the world to pledge waqaf via shares, Abdul Ghani said Kumpulan Waqaf An Nur now holds 4.67% of Kulim (RM142mil), 9.25% of KPJ Healthcare (RM45mil) and 3.54% of Johor Land (RM13mil).
Project to remove property overhang in Johor
Project to remove property overhang in Johor
MUCH excitement has been generated from the recently announced Iskandar Development Region (IDR) – the next engine of growth to spur new business activities and generate greater wealth for the people.
With the ambitious target of attracting some RM47bil in new investment over the next five years and creation of 800,000 jobs, the Government’s vision is to create a global investment and economic hub with an initial estimated investment of RM17.7bil by the Government and private sector.
Covering the logistic triangle of Senai Airport (in the north), Port of Tanjung Pelepas (west) and Johor Port in Pasir Gudang (east), major projects include the transformation of Bandar Nusajaya into the state’s new administrative centre, development of an Educity and tourist resorts.
Austin Perdana township developed by Mah Sing group in Tebrau
An analyst with a foreign research house said the IDR stood out in two areas – having a strong drive behind the initiative through a newly set up statutory body, the South Johor Authority that would be headed by a minister; and having two designated free access zones (FAZs) in Johor Baru and Bandar Nusajaya.
The FAZs, with plans for high-end residential, retail, hotels, F&B and entertainment outlets, are areas where foreigners can have access to without the usual immigration procedures or time restrictions.
Besides construction companies, developers will be among the biggest winners of the rapid development in south Johor.
Property developers are excited by the prospects of new development opportunities in the IDR and are eager to build their presence in the robust growth region.
They said the generation of more economic activities and employment opportunities would go a long way to alleviate the severe property overhang in certain areas in Johor.
The strong growth rate will also generate wealth, thus allowing buyers to commit to purchasing properties.
The substantial allocation for infrastructure will also improve the accessibility of the more remote parts of Johor and make them attractive for property development.
The initiative will certainly drive demand for property from Malaysian and foreign buyers. Currently, Malaysians make up the bulk of buyers for projects in south Johor, with only 5% comprising foreign purchasers.
The ratio looks set to change with the ease of entry into south Johor through the creation of the FAZs with no immigration and customs check for foreigners. This will spawn greater interest for international businessmen and expatriates based in Singapore to reside in the IDR.
This will also foster the development of high quality offices and business centres, hotels and serviced apartments as well as high-end residential units.
The proportion of foreigners is expected to increase to 11% by 2025 compared with 6% in 2005, especially in the more skilled professional and managerial category, and this group of professionals will be a strong target group for medium to high-end properties.
Famed for its fiercely competitive market, Johor has seen the convergence of a long list of property companies.
They include Asiatic Development Bhd, KSL Holdings Bhd, Mulpha International Bhd, Ekovest Bhd, Crescendo Corp Bhd, Bandar Raya Developments Bhd, Boustead Properties Bhd, United Malayan Land Bhd, Daiman Development Bhd and Johor Land Bhd.
Asiatic is developing the 2,802-acre Indahpura project, which is close to the Senai Airport, while Boustead Properties is undertaking the 1,061 acre-Mutiara Rini; Crescendo (562-acre Danga Bay); Ekovest (Iskandar Waterfront) and IOI Properties (2,689-acre Bandar Putra Kulai).
Meanwhile, KSL is involved in the 228-acre Taman Nusa Bestari, 710-acre Taman Bestari Indah and Taman Kempas Indah.
Analysts have identified Klang Valley-based SP Setia Bhd, Mah Sing Group Bhd and IOI Properties Bhd as the more successful developers in Johor as these companies have achieved commendable sales despite the highly competitive and soft market conditions there.
Mulpha’s 1,371-acre Leisure Farms, located 11km away from Tuas in Singapore, looks like another potential winner. The high-end landed residential development has 700 acres left for development.
MUCH excitement has been generated from the recently announced Iskandar Development Region (IDR) – the next engine of growth to spur new business activities and generate greater wealth for the people.
With the ambitious target of attracting some RM47bil in new investment over the next five years and creation of 800,000 jobs, the Government’s vision is to create a global investment and economic hub with an initial estimated investment of RM17.7bil by the Government and private sector.
Covering the logistic triangle of Senai Airport (in the north), Port of Tanjung Pelepas (west) and Johor Port in Pasir Gudang (east), major projects include the transformation of Bandar Nusajaya into the state’s new administrative centre, development of an Educity and tourist resorts.
Austin Perdana township developed by Mah Sing group in Tebrau
An analyst with a foreign research house said the IDR stood out in two areas – having a strong drive behind the initiative through a newly set up statutory body, the South Johor Authority that would be headed by a minister; and having two designated free access zones (FAZs) in Johor Baru and Bandar Nusajaya.
The FAZs, with plans for high-end residential, retail, hotels, F&B and entertainment outlets, are areas where foreigners can have access to without the usual immigration procedures or time restrictions.
Besides construction companies, developers will be among the biggest winners of the rapid development in south Johor.
Property developers are excited by the prospects of new development opportunities in the IDR and are eager to build their presence in the robust growth region.
They said the generation of more economic activities and employment opportunities would go a long way to alleviate the severe property overhang in certain areas in Johor.
The strong growth rate will also generate wealth, thus allowing buyers to commit to purchasing properties.
The substantial allocation for infrastructure will also improve the accessibility of the more remote parts of Johor and make them attractive for property development.
The initiative will certainly drive demand for property from Malaysian and foreign buyers. Currently, Malaysians make up the bulk of buyers for projects in south Johor, with only 5% comprising foreign purchasers.
The ratio looks set to change with the ease of entry into south Johor through the creation of the FAZs with no immigration and customs check for foreigners. This will spawn greater interest for international businessmen and expatriates based in Singapore to reside in the IDR.
This will also foster the development of high quality offices and business centres, hotels and serviced apartments as well as high-end residential units.
The proportion of foreigners is expected to increase to 11% by 2025 compared with 6% in 2005, especially in the more skilled professional and managerial category, and this group of professionals will be a strong target group for medium to high-end properties.
Famed for its fiercely competitive market, Johor has seen the convergence of a long list of property companies.
They include Asiatic Development Bhd, KSL Holdings Bhd, Mulpha International Bhd, Ekovest Bhd, Crescendo Corp Bhd, Bandar Raya Developments Bhd, Boustead Properties Bhd, United Malayan Land Bhd, Daiman Development Bhd and Johor Land Bhd.
Asiatic is developing the 2,802-acre Indahpura project, which is close to the Senai Airport, while Boustead Properties is undertaking the 1,061 acre-Mutiara Rini; Crescendo (562-acre Danga Bay); Ekovest (Iskandar Waterfront) and IOI Properties (2,689-acre Bandar Putra Kulai).
Meanwhile, KSL is involved in the 228-acre Taman Nusa Bestari, 710-acre Taman Bestari Indah and Taman Kempas Indah.
Analysts have identified Klang Valley-based SP Setia Bhd, Mah Sing Group Bhd and IOI Properties Bhd as the more successful developers in Johor as these companies have achieved commendable sales despite the highly competitive and soft market conditions there.
Mulpha’s 1,371-acre Leisure Farms, located 11km away from Tuas in Singapore, looks like another potential winner. The high-end landed residential development has 700 acres left for development.
KSL expands land bank
KSL expands land bank
By ERROL OH
ALTHOUGH KSL Holdings Bhd's bid last year to substantially enlarge its land bank has gone to court, it has not lost its appetite for acquisitions. In March, the property developer bought almost 300,000 sq ft (6.8 acres) in Johor Baru for RM32.5mil.
KSL made perhaps a more significant move last month when it entered into a sale and purchase agreement to acquire 28.9 acres in Selangor for RM17.8mil.
Before this, the developer had never ventured outside Johor, where it had built a name through a number of commercial and residential projects. Its most recent major developments are Taman Nusa Bestari, Taman Bestari Indah and Taman Kempas Indah, all in the district of Johor Baru.
As at last December, it had a land bank of 2,000 acres in Johor Baru (about 60% of the total), Batu Pahat, Kluang, Segamat, Muar and Mersing.
In a July 14 research report, TA Securities says the Selangor land is located in the vicinity of Sime UEP Properties Bhd's Putra Heights township. Nearby areas include Subang Jaya, Shah Alam and Puchong.
TA reports that the development of the land is scheduled to begin the end of next year. The plan is to build medium to high-end houses such as semi-detached units and bungalows. The gross development value is expected to come to RM140mil.
Says TA: “As this is KSL's first venture into the Klang Valley market, brand awareness for the group is low. Nevertheless, we believe the response to this project would be quite encouraging, premised on the lower pricing strategy adopted.
“In general, KSL prices its properties at a 10% discount compared with other developments in the neighbourhood.”
The stockbroking firm also says KSL has decided to build high-rise apartments on the Johor Baru land it had acquired in March, instead of the original plan for three-storey shophouses. “The switch in plan is to fully utilise and maximise the earnings potential of the limited land area available,” adds TA.
Even without factoring in the two proposed projects, the stockbroking firm maintains a buy call on the stock.
“KSL is currently trading at an undemanding financial year (FY) 2006 price earnings ratio (PER) of 4.4 times (x), possibly affected by the concerns on the intense competition and slowdown in the Johor property market,” TA explains.
“We are still comfortable with our target price of RM2, based on FY06 PER of 6.4x, which is within its historical trading range of 4-11x. Given the hefty upside potential of 38.7% ,excluding the dividend yield of 8%, we reiterate our buy call on KSL.”
The developer has declared a first and final gross dividend of 11 sen per share for FY05. The year before, the gross distribution was 10 sen per share The shares will be traded ex-dividend from Aug 18 and payment will be on Sept 15.
In a research report that came out on May 26, Standard & Poor's also issued a buy call on KSL after working out a 12-month target price of RM1.68. Back then, the stock had closed at RM1.43.
Says the equity research outfit, “Operating predominantly in Johor Baru, KSL has done reasonably well and has managed to maintain its above-industry-average margins of around 40% despite keen competition and supply overhang in Johor Baru.”
In April 2005, KSL entered into a deal with Danaharta Hartanah Sdn Bhd that would have expanded the developer's land bank by 70%. However, the vendor terminated the proposed acquisition in November due to its failure to meet certain conditions precedent. In response, KSL has taken legal action.
It was reported in May that the Court of Appeal had dismissed KSL's motion to extend a caveat on the land.
By ERROL OH
ALTHOUGH KSL Holdings Bhd's bid last year to substantially enlarge its land bank has gone to court, it has not lost its appetite for acquisitions. In March, the property developer bought almost 300,000 sq ft (6.8 acres) in Johor Baru for RM32.5mil.
KSL made perhaps a more significant move last month when it entered into a sale and purchase agreement to acquire 28.9 acres in Selangor for RM17.8mil.
Before this, the developer had never ventured outside Johor, where it had built a name through a number of commercial and residential projects. Its most recent major developments are Taman Nusa Bestari, Taman Bestari Indah and Taman Kempas Indah, all in the district of Johor Baru.
As at last December, it had a land bank of 2,000 acres in Johor Baru (about 60% of the total), Batu Pahat, Kluang, Segamat, Muar and Mersing.
In a July 14 research report, TA Securities says the Selangor land is located in the vicinity of Sime UEP Properties Bhd's Putra Heights township. Nearby areas include Subang Jaya, Shah Alam and Puchong.
TA reports that the development of the land is scheduled to begin the end of next year. The plan is to build medium to high-end houses such as semi-detached units and bungalows. The gross development value is expected to come to RM140mil.
Says TA: “As this is KSL's first venture into the Klang Valley market, brand awareness for the group is low. Nevertheless, we believe the response to this project would be quite encouraging, premised on the lower pricing strategy adopted.
“In general, KSL prices its properties at a 10% discount compared with other developments in the neighbourhood.”
The stockbroking firm also says KSL has decided to build high-rise apartments on the Johor Baru land it had acquired in March, instead of the original plan for three-storey shophouses. “The switch in plan is to fully utilise and maximise the earnings potential of the limited land area available,” adds TA.
Even without factoring in the two proposed projects, the stockbroking firm maintains a buy call on the stock.
“KSL is currently trading at an undemanding financial year (FY) 2006 price earnings ratio (PER) of 4.4 times (x), possibly affected by the concerns on the intense competition and slowdown in the Johor property market,” TA explains.
“We are still comfortable with our target price of RM2, based on FY06 PER of 6.4x, which is within its historical trading range of 4-11x. Given the hefty upside potential of 38.7% ,excluding the dividend yield of 8%, we reiterate our buy call on KSL.”
The developer has declared a first and final gross dividend of 11 sen per share for FY05. The year before, the gross distribution was 10 sen per share The shares will be traded ex-dividend from Aug 18 and payment will be on Sept 15.
In a research report that came out on May 26, Standard & Poor's also issued a buy call on KSL after working out a 12-month target price of RM1.68. Back then, the stock had closed at RM1.43.
Says the equity research outfit, “Operating predominantly in Johor Baru, KSL has done reasonably well and has managed to maintain its above-industry-average margins of around 40% despite keen competition and supply overhang in Johor Baru.”
In April 2005, KSL entered into a deal with Danaharta Hartanah Sdn Bhd that would have expanded the developer's land bank by 70%. However, the vendor terminated the proposed acquisition in November due to its failure to meet certain conditions precedent. In response, KSL has taken legal action.
It was reported in May that the Court of Appeal had dismissed KSL's motion to extend a caveat on the land.
SP Setia sees good prospects for property projects in Johor
SP Setia sees good prospects for property projects in Johor
BY DANNY YAP
PETALING JAYA: SP Setia Bhd sees good prospects for property developments in south Johor following the Government’s decision to transform the region into a major economic hub.
SP Setia group managing director and chief executive officer Tan Sri Liew Kee Sin said the allocation by the Government and expected flow of foreign investment totalling about RM15bil would provide further impetus to fast track the state's economy to the next growth level.
“We are very happy with the government allocation and positive sentiment towards the region,” he told StarBiz.
As a developer, SP Setia believed strongly in the potential of the Johor property market, especially the South Johor Economic Region (SJER), he said.
He said SJER was a boon for developers with substantial prime land bank in the area.
“Of particular interest to developers are the urban redevelopment plans slated for Johor Baru city and Port of Tanjung Pelepas, which will see existing industries upgraded to meet green standards and new standards being introduced to residential communities,” Liew said.
He said an emerging zone that would spawn the development of new townships was also on the cards.
In this respect, Liew said SP Setia's 1,509-acre Bukit Indah project in Bandar Nusajaya was one of the prime beneficiaries of the increased economic activity due to projects such as the Johor's new administrative capital, extension of Senai international airport and the Nusajaya Educity, which was expected to house at least four foreign universities with total enrolment of over 20,000 students.
Started in 1997, the Bukit Indah project still had close to 600 acres of undeveloped land bank that could benefit from the Government's recent pump priming activities, he said.
Liew said another project – Setia Tropika – located within the Tebrau corridor and forming part of the SJER, was another possible beneficiary.
Spanning 740 acres and with a gross development value of RM2bil, the project had transformed the development landscape of Johor Baru with its chic contemporary designs, he said.
“Setia Tropika will enjoy direct access to the North-South Expressway upon completion of the RM15mil link road being built by our subsidiary Setia Indah Sdn Bhd,” Liew noted. Its central location also afforded easy access to Johor Baru city centre and the causeway located 6km and 10km away respectively.
Asked if there would be a flood of investors buying properties in SJER, especially from Singapore, he said: “We believe that property demand in SJER is set to grow concurrently with the multiplier effects of the logistics infrastructure and introduction of commercially and investor-friendly incentives.”
On SP Setia's investment strategy in Johor, Liew said the company would capitalise on its yet-to-be developed land bank in the state, riding on the expected increase in economic activities.
He said SP Setia had successfully established a strong following in the Johor Baru market with its signature projects that showcased award-winning landscaping, innovative lifestyle concepts and quality homes at accessible pricing.
“Our Bukit Indah and Setia Tropika projects will underpin our growth in Johor. We are also actively scouting for more strategic land bank in Johor to further expand our presence and take advantage of the boost in infrastructure spending and economic activity,” said Liew.
Asked what was further needed to attract more investors to Johor Baru, he said the state government must put in place first-class logistics infrastructure, introduce more attractive incentives and maintain its low-cost lead to become a choice investment and tourism destination.
Other developers that have invested in the SJER include UEM World Bhd in Nusajaya and developers in Danga Bay.
BY DANNY YAP
PETALING JAYA: SP Setia Bhd sees good prospects for property developments in south Johor following the Government’s decision to transform the region into a major economic hub.
SP Setia group managing director and chief executive officer Tan Sri Liew Kee Sin said the allocation by the Government and expected flow of foreign investment totalling about RM15bil would provide further impetus to fast track the state's economy to the next growth level.
“We are very happy with the government allocation and positive sentiment towards the region,” he told StarBiz.
As a developer, SP Setia believed strongly in the potential of the Johor property market, especially the South Johor Economic Region (SJER), he said.
He said SJER was a boon for developers with substantial prime land bank in the area.
“Of particular interest to developers are the urban redevelopment plans slated for Johor Baru city and Port of Tanjung Pelepas, which will see existing industries upgraded to meet green standards and new standards being introduced to residential communities,” Liew said.
He said an emerging zone that would spawn the development of new townships was also on the cards.
In this respect, Liew said SP Setia's 1,509-acre Bukit Indah project in Bandar Nusajaya was one of the prime beneficiaries of the increased economic activity due to projects such as the Johor's new administrative capital, extension of Senai international airport and the Nusajaya Educity, which was expected to house at least four foreign universities with total enrolment of over 20,000 students.
Started in 1997, the Bukit Indah project still had close to 600 acres of undeveloped land bank that could benefit from the Government's recent pump priming activities, he said.
Liew said another project – Setia Tropika – located within the Tebrau corridor and forming part of the SJER, was another possible beneficiary.
Spanning 740 acres and with a gross development value of RM2bil, the project had transformed the development landscape of Johor Baru with its chic contemporary designs, he said.
“Setia Tropika will enjoy direct access to the North-South Expressway upon completion of the RM15mil link road being built by our subsidiary Setia Indah Sdn Bhd,” Liew noted. Its central location also afforded easy access to Johor Baru city centre and the causeway located 6km and 10km away respectively.
Asked if there would be a flood of investors buying properties in SJER, especially from Singapore, he said: “We believe that property demand in SJER is set to grow concurrently with the multiplier effects of the logistics infrastructure and introduction of commercially and investor-friendly incentives.”
On SP Setia's investment strategy in Johor, Liew said the company would capitalise on its yet-to-be developed land bank in the state, riding on the expected increase in economic activities.
He said SP Setia had successfully established a strong following in the Johor Baru market with its signature projects that showcased award-winning landscaping, innovative lifestyle concepts and quality homes at accessible pricing.
“Our Bukit Indah and Setia Tropika projects will underpin our growth in Johor. We are also actively scouting for more strategic land bank in Johor to further expand our presence and take advantage of the boost in infrastructure spending and economic activity,” said Liew.
Asked what was further needed to attract more investors to Johor Baru, he said the state government must put in place first-class logistics infrastructure, introduce more attractive incentives and maintain its low-cost lead to become a choice investment and tourism destination.
Other developers that have invested in the SJER include UEM World Bhd in Nusajaya and developers in Danga Bay.
All eyes on stocks linked to SJER
All eyes on stocks linked to SJER
By KEITH HIEW
PETALING JAYA: The anticipated heavy trading in South Johor Economic Region (SJER)-related property and construction stocks following news of the Government allocating RM5bil for infrastructure projects in the region under the Ninth Malaysia Plan did not materialise yesterday.
However, analysts are still bullish on the medium-term prospects of those companies.
They said while shares of companies such as UEM World Bhd, SP Setia Bhd and Gamuda Bhd did not exactly attract heavy trading, their medium-term prospects remained “exciting''.
A local analyst contacted by StarBiz yesterday expected UEM group to be involved “one way or another” in the tendering for and securing of SJER-related projects due to its “relatively large land bank” in Johor.
The analyst said other companies could benefit, but the most important factor in determining the future profit of those companies making bids would be the distance of their project site from the centre of the SJER.
“The main point to consider is SJER's catalyst developments, which would include the building of basic amenities such as hospitals.
“Once those are built, we could see more interested investors and hence, an appreciation in land value.”
The analyst said the relatively lukewarm reception to the stocks yesterday was expected, as the initial euphoria over SJER-related stocks in the first half of the year had subsided.
“People are now waiting to see if these catalyst developments can kick off successfully.
“Once these are up, they would probably wait another couple of quarters to see if earnings are impressive for these companies before any further re-rating,” he added.
An analyst from OSK Securities offered a similar point of view, saying that most of the investors would have known which companies stood to gain from SJER projects.
He said while the full details were not known, such as which company would be getting a specific job, investors knew that companies such as MMC Corp Bhd, UEM and SP Setia had a presence in Johor and could be holding back until there was convincing proof of how those companies would fare should they win any contracts.
Meanwhile, another research house said in its report that the key beneficiaries of the development of Johor as well as the SJER included Mah Sing Group Bhd, Plenitude Bhd and KSL Holdings Bhd.
This is especially with the SJER projects and the upcoming integrated resorts in Singapore potentially boosting land value in Johor and housing demand, it said.
However, the research outfit also said the downside to the Johor property market could come from a demand slowdown, especially since the market had decelerated following a rise in the price of petrol and electricity tariff.
Land scarcity in Johor Baru would also mean developers would need to venture out further to secure land bank, it added.
By KEITH HIEW
PETALING JAYA: The anticipated heavy trading in South Johor Economic Region (SJER)-related property and construction stocks following news of the Government allocating RM5bil for infrastructure projects in the region under the Ninth Malaysia Plan did not materialise yesterday.
However, analysts are still bullish on the medium-term prospects of those companies.
They said while shares of companies such as UEM World Bhd, SP Setia Bhd and Gamuda Bhd did not exactly attract heavy trading, their medium-term prospects remained “exciting''.
A local analyst contacted by StarBiz yesterday expected UEM group to be involved “one way or another” in the tendering for and securing of SJER-related projects due to its “relatively large land bank” in Johor.
The analyst said other companies could benefit, but the most important factor in determining the future profit of those companies making bids would be the distance of their project site from the centre of the SJER.
“The main point to consider is SJER's catalyst developments, which would include the building of basic amenities such as hospitals.
“Once those are built, we could see more interested investors and hence, an appreciation in land value.”
The analyst said the relatively lukewarm reception to the stocks yesterday was expected, as the initial euphoria over SJER-related stocks in the first half of the year had subsided.
“People are now waiting to see if these catalyst developments can kick off successfully.
“Once these are up, they would probably wait another couple of quarters to see if earnings are impressive for these companies before any further re-rating,” he added.
An analyst from OSK Securities offered a similar point of view, saying that most of the investors would have known which companies stood to gain from SJER projects.
He said while the full details were not known, such as which company would be getting a specific job, investors knew that companies such as MMC Corp Bhd, UEM and SP Setia had a presence in Johor and could be holding back until there was convincing proof of how those companies would fare should they win any contracts.
Meanwhile, another research house said in its report that the key beneficiaries of the development of Johor as well as the SJER included Mah Sing Group Bhd, Plenitude Bhd and KSL Holdings Bhd.
This is especially with the SJER projects and the upcoming integrated resorts in Singapore potentially boosting land value in Johor and housing demand, it said.
However, the research outfit also said the downside to the Johor property market could come from a demand slowdown, especially since the market had decelerated following a rise in the price of petrol and electricity tariff.
Land scarcity in Johor Baru would also mean developers would need to venture out further to secure land bank, it added.
Johor property to be injected into Hektar REIT
Johor property to be injected into Hektar REIT
KUALA LUMPUR: Hektar Asset Management Sdn Bhd yesterday confirmed plans to inject the proposed “lifestyle shopping centre” in Nusajaya, Johor, into the Hektar Real Estate Investment Trust (REIT) in the future.
The Hektar group plans to build the shopping centre on 50 acres of an 84-acre site in Nusajaya currently owned by Hektar Klasik Sdn Bhd.
Aseambankers Malaysia Bhd director Datuk Mohammed Hussein (left) and Datuk Jaafar Abdul Hamid exchanging documents at the underwriting signing ceremony
The hill top project is expected to have 1 million sq ft of net lettable space.
The injection of the property into the Hektar REIT would be an arm's length transaction, said Hektar Asset Management chairman Datuk Jaafar Abdul Hamid at Hektar REIT's underwriting ceremony yesterday.
However, the injection of the project into the REIT would only take place in a couple of years, because the construction would take “at least two years”, he said.
For its proposed listing on the Bursa Malaysia main board, Hektar REIT already received the injection of two shopping centres - Subang Parade in Selangor and Mahkota Parade in Malacca.
In the immediate term, the REIT intends to develop more retail space in its two existing properties.
“Subang Parade owns two acres - now a nursery - that has potential to be developed into more retail space.
“In Mahkota Parade, the car park is about three acres that has potential to be developed into more retail space. So all in, we have five acres (to develop),” Jaafar said.
Hektar Asset Management is the manager of Hektar REIT, whose initial public offer (IPO) is underwritten by Aseambankers Malaysia Bhd and AmMerchant Bank Bhd.
The IPO is expected to raise proceeds of RM176mil, of which about RM7mil will be for listing expenses and RM1mil for working capital.
The remainder will partly finance the acquisition of Subang Parade and Mahkota Parade as well as the repayment of loans.
The proposed listing exercise involves an offering of 159.5 million new units in Hektar REIT. The Hektar group intends to retain a 51.16% stake in Hektar REIT upon completion of the exercise.
KUALA LUMPUR: Hektar Asset Management Sdn Bhd yesterday confirmed plans to inject the proposed “lifestyle shopping centre” in Nusajaya, Johor, into the Hektar Real Estate Investment Trust (REIT) in the future.
The Hektar group plans to build the shopping centre on 50 acres of an 84-acre site in Nusajaya currently owned by Hektar Klasik Sdn Bhd.
Aseambankers Malaysia Bhd director Datuk Mohammed Hussein (left) and Datuk Jaafar Abdul Hamid exchanging documents at the underwriting signing ceremony
The hill top project is expected to have 1 million sq ft of net lettable space.
The injection of the property into the Hektar REIT would be an arm's length transaction, said Hektar Asset Management chairman Datuk Jaafar Abdul Hamid at Hektar REIT's underwriting ceremony yesterday.
However, the injection of the project into the REIT would only take place in a couple of years, because the construction would take “at least two years”, he said.
For its proposed listing on the Bursa Malaysia main board, Hektar REIT already received the injection of two shopping centres - Subang Parade in Selangor and Mahkota Parade in Malacca.
In the immediate term, the REIT intends to develop more retail space in its two existing properties.
“Subang Parade owns two acres - now a nursery - that has potential to be developed into more retail space.
“In Mahkota Parade, the car park is about three acres that has potential to be developed into more retail space. So all in, we have five acres (to develop),” Jaafar said.
Hektar Asset Management is the manager of Hektar REIT, whose initial public offer (IPO) is underwritten by Aseambankers Malaysia Bhd and AmMerchant Bank Bhd.
The IPO is expected to raise proceeds of RM176mil, of which about RM7mil will be for listing expenses and RM1mil for working capital.
The remainder will partly finance the acquisition of Subang Parade and Mahkota Parade as well as the repayment of loans.
The proposed listing exercise involves an offering of 159.5 million new units in Hektar REIT. The Hektar group intends to retain a 51.16% stake in Hektar REIT upon completion of the exercise.
SJER has vast potential based on own merit
SJER has vast potential based on own merit
Prime Minister Datuk Seri Abdullah Ahmad Badawi will unveil the master plan of the South Johor Economic Region (SJER) development project this Saturday. The SJER has been earmarked as the focus area for development in the southern region under the Ninth Malaysia Plan (9MP). Covering 3,200 sq km, the SJER growth triangle include Senai-Kulai in the north, Pasir Gudang-Tanjung Langsat in the east and Tanjung Pelepas-Gelang Patah-Pontian in the west. SJER would transform south Johor into a strong sustainable conurbation of international standing. StarBiz journalist ZAZALI MUSA speaks with people from different backgrounds on the SJER.
JOHOR BARU: The South Johor Economic Region (SJER) should have been implemented some 10 years ago when Malaysia enjoyed strong economic growth, according to Taiwanese investor and All Cosmos Industries managing director Tony Peng.
He said in the 1990s, Malaysia was one of the “darlings” of the Asian economies.
“Johor was in a position to develop it but I could not understand why the Government did not proceed,’’ he told StarBiz.
Peng set up a fertiliser plant in Pasir Gudang 10 years ago as he was confident about the future of the state.
Tony Peng
However, with competition from China, Indonesia, Thailand and Vietnam, Malaysia was no longer an attractive place to do business in due to escalating costs, he said.
The Government, he said should review the cost of doing business if it wanted to remain competitive.
He claimed that the state government had not done much to attract new investments or encourage existing ones to expand their operations.
The company, which also had a fertiliser plant in Shandong Province, China, found that the provincial government was more “business-friendly” offering many incentives for the investors.
“For instance, the land cost is much cheaper in China compared with Malaysia and the authorities there will build factories for investors for free.
“China is cheap. It is so attractive that investors or businessmen will be tempted to invest there,’’ he added.
The price of industrial land in Johor was not cheap especially land owned by the state government’s investment arm Johor Corp (JCorp).
He said the state government should ensure that the land was not sold unless the buyers wanted to develop it.
Lim Han Weng
Land, especially in the Pasir Gudang industrial area, had been sold to investors but have been left vacant for years.
“The state government should seriously consider revoking land belonging to local or foreign investors that had been left idle for many years,” he siad.
The Government should not look at the Shenzhen-Hong Kong as a model for the development of the SJER as Johor has its own unique features.
They include close proximity to Singapore, having two ports – the Johor Port and Port of Tanjung Pelepas (PTP) and land resources.
Peng said Johor had the potential to attract more Singapore-based companies, especially manufacturers, due to the high operating cost in the republic.
“Unlike Shenzhen which has no problem in getting labour supply from China, SJER has to depend on foreign workers for its manufacturing activities,’’ he said.
Real Estate & Housing Developers Association (Rehda) Johor branch chairman Steven Shum, the Government’s decision to freeze land sale within the growth triangle would send a wrong message to foreign investors.
Shum, who is also Tanah Sutera Development Sdn Bhd general manager, said delays in announcing the SJER development plan would only reflect on the poor delivery system.
“The Government should not freeze the sale of land in the SJER as the price of land will not increase overnight. It should focus on building the infrastructure .
“Land matters should be left to the private sector. Let the market forces decide on the best price,’’ he said.
Rehda was confident that the SJER would bring some good news to the Johor property market.
This year has been an unauspicious one for the property market as most of the Johor Rehda members had to reduce new launches by at least 50%.
“The Government should not look at the Shenzen-Hong Kong economic region as a model in developing the SJER,’’ he said.
The Shenzhen-Hong Kong formula worked because of cheap labour, vast tracks of land for development and cheaper land cost.
‘Rehda is confident that the SJER will bring some good news to the Johor property market’ Steven Shum
Since more emphasis has been on agriculture, land for vegetables and fruit plantation as well as animal husbandry should be opened up.
The country’s agriculture industry must be revolutionised with more downstream activities.
“The SJER can capitalise on its natural resources such as jungles and beaches to aggressively promote tourism,” he said.
The Government should also promote tourism and the Malaysia My Second Home (MM2H) project.
He proposed that the SJER provide resort homes, villas or retirement sanctuary for the rich people from Australia, Asean, China, India, Japan, the Middle East and South Korea.
Small and Medium Enterprises Association of South Johor president David Teh Kee Sim said it was premature to say whether the SJER would be successful as some 8MP projects were not fully implemented.
“Personally, I look at it positively, it is better to have a plan on the SJER than no plan at all,’’ he said, adding that it should benefit all Malaysians.
Residents within the SJER growth triangle could expect a better lifestyle and higher standard of living.
The small-and-medium-scale industries (SMEs) could expect higher inflow of foreign direct investments (FDIs) into Johor.
“Most of the SMEs based here are involved in the support industries and they are fast moving into the higher-end and bio-technology sector.
“Before implementing the SJER, the Government should listen to the grouses of the people, so that it can plan effectively.
“Good public transportation network is one of the key factors that would determine whether the SJER would be successful.”
David Teh Kee Sim
Teh stressed that the people were not against development but they wanted a balance between economic and non-economic gain.
“We could learn from others especially industrialised nations; mistakes should not be made in the planning of the SJER or we will pay heavily for it,’’ he said.
Apart from relocating their operations here, Singapore-based companies could also outsource from many SMEs in Johor at cheaper prices.
Yinson Holdings Bhd managing director Lin Han Weng said the Government must be more aggressive in promoting the SJER if it wanted to turn south Johor into a leading regional logistic hub.
Without promotion, the Senai airport which is part of the key components in the logistic hub could turn into a “white elephant”.
“It is only a matter of time before the Senai airport could emerge as a leading cargo regional hub,’’ said Lim.
The main problem faced by Senai Airport was that it was too near to Changi which was connected with major cities around the world.
Instead of competing with Changi, Senai should develop its own niche market probably as a transhipment hub for regional airlines and as a collection centre for cargos from countries in the region.
Lim said half of investors in Johor were from Singapore, as they wanted to be close to home and at the same time enjoy cheaper costs.
“Many Singapore businessmen are willing to commute daily from the republic to Johor Baru although they would be caught in the infamous causeway crawl.
“Many say Johor has two ports – Johor Port and PTP, but actually it “has” three – the Port of Singapore Authority (PSA),’’ said Lim.
He said if ships did not come to Johor Port or PTP, manufacturers could use the PSA to export their products.
Prime Minister Datuk Seri Abdullah Ahmad Badawi will unveil the master plan of the South Johor Economic Region (SJER) development project this Saturday. The SJER has been earmarked as the focus area for development in the southern region under the Ninth Malaysia Plan (9MP). Covering 3,200 sq km, the SJER growth triangle include Senai-Kulai in the north, Pasir Gudang-Tanjung Langsat in the east and Tanjung Pelepas-Gelang Patah-Pontian in the west. SJER would transform south Johor into a strong sustainable conurbation of international standing. StarBiz journalist ZAZALI MUSA speaks with people from different backgrounds on the SJER.
JOHOR BARU: The South Johor Economic Region (SJER) should have been implemented some 10 years ago when Malaysia enjoyed strong economic growth, according to Taiwanese investor and All Cosmos Industries managing director Tony Peng.
He said in the 1990s, Malaysia was one of the “darlings” of the Asian economies.
“Johor was in a position to develop it but I could not understand why the Government did not proceed,’’ he told StarBiz.
Peng set up a fertiliser plant in Pasir Gudang 10 years ago as he was confident about the future of the state.
Tony Peng
However, with competition from China, Indonesia, Thailand and Vietnam, Malaysia was no longer an attractive place to do business in due to escalating costs, he said.
The Government, he said should review the cost of doing business if it wanted to remain competitive.
He claimed that the state government had not done much to attract new investments or encourage existing ones to expand their operations.
The company, which also had a fertiliser plant in Shandong Province, China, found that the provincial government was more “business-friendly” offering many incentives for the investors.
“For instance, the land cost is much cheaper in China compared with Malaysia and the authorities there will build factories for investors for free.
“China is cheap. It is so attractive that investors or businessmen will be tempted to invest there,’’ he added.
The price of industrial land in Johor was not cheap especially land owned by the state government’s investment arm Johor Corp (JCorp).
He said the state government should ensure that the land was not sold unless the buyers wanted to develop it.
Lim Han Weng
Land, especially in the Pasir Gudang industrial area, had been sold to investors but have been left vacant for years.
“The state government should seriously consider revoking land belonging to local or foreign investors that had been left idle for many years,” he siad.
The Government should not look at the Shenzhen-Hong Kong as a model for the development of the SJER as Johor has its own unique features.
They include close proximity to Singapore, having two ports – the Johor Port and Port of Tanjung Pelepas (PTP) and land resources.
Peng said Johor had the potential to attract more Singapore-based companies, especially manufacturers, due to the high operating cost in the republic.
“Unlike Shenzhen which has no problem in getting labour supply from China, SJER has to depend on foreign workers for its manufacturing activities,’’ he said.
Real Estate & Housing Developers Association (Rehda) Johor branch chairman Steven Shum, the Government’s decision to freeze land sale within the growth triangle would send a wrong message to foreign investors.
Shum, who is also Tanah Sutera Development Sdn Bhd general manager, said delays in announcing the SJER development plan would only reflect on the poor delivery system.
“The Government should not freeze the sale of land in the SJER as the price of land will not increase overnight. It should focus on building the infrastructure .
“Land matters should be left to the private sector. Let the market forces decide on the best price,’’ he said.
Rehda was confident that the SJER would bring some good news to the Johor property market.
This year has been an unauspicious one for the property market as most of the Johor Rehda members had to reduce new launches by at least 50%.
“The Government should not look at the Shenzen-Hong Kong economic region as a model in developing the SJER,’’ he said.
The Shenzhen-Hong Kong formula worked because of cheap labour, vast tracks of land for development and cheaper land cost.
‘Rehda is confident that the SJER will bring some good news to the Johor property market’ Steven Shum
Since more emphasis has been on agriculture, land for vegetables and fruit plantation as well as animal husbandry should be opened up.
The country’s agriculture industry must be revolutionised with more downstream activities.
“The SJER can capitalise on its natural resources such as jungles and beaches to aggressively promote tourism,” he said.
The Government should also promote tourism and the Malaysia My Second Home (MM2H) project.
He proposed that the SJER provide resort homes, villas or retirement sanctuary for the rich people from Australia, Asean, China, India, Japan, the Middle East and South Korea.
Small and Medium Enterprises Association of South Johor president David Teh Kee Sim said it was premature to say whether the SJER would be successful as some 8MP projects were not fully implemented.
“Personally, I look at it positively, it is better to have a plan on the SJER than no plan at all,’’ he said, adding that it should benefit all Malaysians.
Residents within the SJER growth triangle could expect a better lifestyle and higher standard of living.
The small-and-medium-scale industries (SMEs) could expect higher inflow of foreign direct investments (FDIs) into Johor.
“Most of the SMEs based here are involved in the support industries and they are fast moving into the higher-end and bio-technology sector.
“Before implementing the SJER, the Government should listen to the grouses of the people, so that it can plan effectively.
“Good public transportation network is one of the key factors that would determine whether the SJER would be successful.”
David Teh Kee Sim
Teh stressed that the people were not against development but they wanted a balance between economic and non-economic gain.
“We could learn from others especially industrialised nations; mistakes should not be made in the planning of the SJER or we will pay heavily for it,’’ he said.
Apart from relocating their operations here, Singapore-based companies could also outsource from many SMEs in Johor at cheaper prices.
Yinson Holdings Bhd managing director Lin Han Weng said the Government must be more aggressive in promoting the SJER if it wanted to turn south Johor into a leading regional logistic hub.
Without promotion, the Senai airport which is part of the key components in the logistic hub could turn into a “white elephant”.
“It is only a matter of time before the Senai airport could emerge as a leading cargo regional hub,’’ said Lim.
The main problem faced by Senai Airport was that it was too near to Changi which was connected with major cities around the world.
Instead of competing with Changi, Senai should develop its own niche market probably as a transhipment hub for regional airlines and as a collection centre for cargos from countries in the region.
Lim said half of investors in Johor were from Singapore, as they wanted to be close to home and at the same time enjoy cheaper costs.
“Many Singapore businessmen are willing to commute daily from the republic to Johor Baru although they would be caught in the infamous causeway crawl.
“Many say Johor has two ports – Johor Port and PTP, but actually it “has” three – the Port of Singapore Authority (PSA),’’ said Lim.
He said if ships did not come to Johor Port or PTP, manufacturers could use the PSA to export their products.
Tuesday, January 16, 2007
The southern appeal
The southern appeal
INVESTORS who held on to their shares in UEM World Bhd for years in the fervent belief that the tide would eventually turn for the group have been vindicated.
In fact, it would hardly be considered a stretch to say that the stock has taken on a life of its own over the last few weeks. Assuming an investor had bought the shares at the start of the year, he would have made a tidy gain of more than 130%.
UEM is said to be well-positioned to benefit from the anticipated appreciation in Johor land values
This, in part, could be based on the fact that several research houses have come out with reports to highlight the company's encouraging prospects given the government's push to develop the Iskandar Development Region (IDR) into a major economic powerhouse. (UEM World owns about 10,000 acres of land in Bandar Nusajaya, which is an integral component of the IDR.)
UOB-Kay Hian Research reckons the IDR has all the makings of the next super-cycle performer on Bursa Malaysia.
“(The IDR) is a strong super-cycle performer candidate because it is a new investment theme, the government is involved, policy changes are likely to take place and mega infrastructure contracts that have been budgeted under the Ninth Malaysia Plan (9MP) are likely to be awarded,” it says.
Recent land deals in the state have also served to highlight the potential value of the vast tract of land owned by UEM World in Nusajaya, Johor.
The sale of commercial land in Nusajaya by SP Setia Bhd was transacted at RM65 per sq ft. UEM Land, a wholly owned unit of UEM World, managed to sell five parcels of industrial land to Singapore's HG Metal Manufacturing Ltd at RM21psf.
This has given rise to hope that UEM World's land in the vicinity could be worth a lot more than what industry observers initially reckoned it would fetch.
Some observers now say they would not be surprised if more foreign investors make a beeline for land in Johor. They say the stark price differential between Malaysia and Singapore for residential, commercial and industrial land would make foreigners willing to fork out anywhere between RM20 and RM30 psf for land in Johor.
Re-rating catalysts
UOB-Kay Hian says it is likely that companies owning land in the state, like UEM World, Tebrau Teguh Bhd and Mulpha International Bhd, would see their revised net asset values (RNAV) rise over the next few years as land values appreciate more on the back of policy changes.
“For UEM World, if land prices increase to RM20 psf (or equal to Klang-Shah Alam levels), its RNAV could rise to RM8.35,” UOB-Kay Hian points out.
A foreign investment research house has come up with a RNAV-based target price of RM5 for UEM World shares. Based on last Thursday's closing price of RM4.08, this means the shares could still enjoy an upside of more than 20%.
The valuation is based on RNAV as the bulk of UEM World's worth is derived from its undeveloped land bank. In Johor, the group has about 10,000 acres of undeveloped land, making UEM World one of the largest owners of land in the IDR.
The foreign research house notes in a report dated Feb 6 that UEM World is well positioned to benefit from the anticipated appreciation in Johor land values. It reckons that every RM1 psf rise in land value would boost the investment bank's RNAV for UEM World by 5%.
“The Government’s focus on developing southern Johor and possible capital management initiatives at group level are conducive factors to drive the potential re-rating of UEM World. We believe the catalysts will come from appreciating land values in Johor and potential capital management initiatives as UEM World may look to dispose of some of its non-core assets,” it says.
It is unlikely that UEM World would distribute cash given that it requires capital for the development of Nusajaya. However, the foreign house says it is possible that the company would make a distribution in specie of its holdings in some of its non-core assets like Cement Industries of Malaysia Bhd and Pharmaniaga Bhd.
This level of optimism among analysts about UEM World is fairly new. This time last year, the group still had its work cut out to convince analysts that it is truly positioned for growth.
Many had come away from a media/analyst briefing not altogether convinced that Nusajaya would take off in as big a way as had been suggested by UEM World chief Datuk Ahmad Pardas Senin.
Since then, however, the development of the Southern Corridor has received the government's endorsement.
It is now one of the major plans that would determine the overall success of the 9MP.
UEM World's investment case has also been enhanced by measures taken to address its debt burden. Last October, the group unveiled a plan to raise RM1.94bil via a de-gearing exercise. This involves the sale of land to Khazanah Nasional Bhd.
The plan would simultaneously help UEM World raise financing to accelerate the development of Nusajaya and get Khazanah actively involved in the development of key projects in the vicinity of the group’s existing land bank.
INVESTORS who held on to their shares in UEM World Bhd for years in the fervent belief that the tide would eventually turn for the group have been vindicated.
In fact, it would hardly be considered a stretch to say that the stock has taken on a life of its own over the last few weeks. Assuming an investor had bought the shares at the start of the year, he would have made a tidy gain of more than 130%.
UEM is said to be well-positioned to benefit from the anticipated appreciation in Johor land values
This, in part, could be based on the fact that several research houses have come out with reports to highlight the company's encouraging prospects given the government's push to develop the Iskandar Development Region (IDR) into a major economic powerhouse. (UEM World owns about 10,000 acres of land in Bandar Nusajaya, which is an integral component of the IDR.)
UOB-Kay Hian Research reckons the IDR has all the makings of the next super-cycle performer on Bursa Malaysia.
“(The IDR) is a strong super-cycle performer candidate because it is a new investment theme, the government is involved, policy changes are likely to take place and mega infrastructure contracts that have been budgeted under the Ninth Malaysia Plan (9MP) are likely to be awarded,” it says.
Recent land deals in the state have also served to highlight the potential value of the vast tract of land owned by UEM World in Nusajaya, Johor.
The sale of commercial land in Nusajaya by SP Setia Bhd was transacted at RM65 per sq ft. UEM Land, a wholly owned unit of UEM World, managed to sell five parcels of industrial land to Singapore's HG Metal Manufacturing Ltd at RM21psf.
This has given rise to hope that UEM World's land in the vicinity could be worth a lot more than what industry observers initially reckoned it would fetch.
Some observers now say they would not be surprised if more foreign investors make a beeline for land in Johor. They say the stark price differential between Malaysia and Singapore for residential, commercial and industrial land would make foreigners willing to fork out anywhere between RM20 and RM30 psf for land in Johor.
Re-rating catalysts
UOB-Kay Hian says it is likely that companies owning land in the state, like UEM World, Tebrau Teguh Bhd and Mulpha International Bhd, would see their revised net asset values (RNAV) rise over the next few years as land values appreciate more on the back of policy changes.
“For UEM World, if land prices increase to RM20 psf (or equal to Klang-Shah Alam levels), its RNAV could rise to RM8.35,” UOB-Kay Hian points out.
A foreign investment research house has come up with a RNAV-based target price of RM5 for UEM World shares. Based on last Thursday's closing price of RM4.08, this means the shares could still enjoy an upside of more than 20%.
The valuation is based on RNAV as the bulk of UEM World's worth is derived from its undeveloped land bank. In Johor, the group has about 10,000 acres of undeveloped land, making UEM World one of the largest owners of land in the IDR.
The foreign research house notes in a report dated Feb 6 that UEM World is well positioned to benefit from the anticipated appreciation in Johor land values. It reckons that every RM1 psf rise in land value would boost the investment bank's RNAV for UEM World by 5%.
“The Government’s focus on developing southern Johor and possible capital management initiatives at group level are conducive factors to drive the potential re-rating of UEM World. We believe the catalysts will come from appreciating land values in Johor and potential capital management initiatives as UEM World may look to dispose of some of its non-core assets,” it says.
It is unlikely that UEM World would distribute cash given that it requires capital for the development of Nusajaya. However, the foreign house says it is possible that the company would make a distribution in specie of its holdings in some of its non-core assets like Cement Industries of Malaysia Bhd and Pharmaniaga Bhd.
This level of optimism among analysts about UEM World is fairly new. This time last year, the group still had its work cut out to convince analysts that it is truly positioned for growth.
Many had come away from a media/analyst briefing not altogether convinced that Nusajaya would take off in as big a way as had been suggested by UEM World chief Datuk Ahmad Pardas Senin.
Since then, however, the development of the Southern Corridor has received the government's endorsement.
It is now one of the major plans that would determine the overall success of the 9MP.
UEM World's investment case has also been enhanced by measures taken to address its debt burden. Last October, the group unveiled a plan to raise RM1.94bil via a de-gearing exercise. This involves the sale of land to Khazanah Nasional Bhd.
The plan would simultaneously help UEM World raise financing to accelerate the development of Nusajaya and get Khazanah actively involved in the development of key projects in the vicinity of the group’s existing land bank.
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