Rising foreign interest
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By ANGIE NG
FOREIGN institutional funds and investors are venturing into Malaysia in a bigger way to take advantage of the strong upside potential of the country's real estate market.
The Klang Valley, notably Kuala Lumpur, which has been the hotbed for property developers and investors, continues to attract substantial interests from foreigners.
Other regions include the Iskandar Development Region (IDR), which recently attracted multi-billion investments from the Gulf Cooperation Council (GCC) countries, and the Northern Economic Corridor.
Besides looking for good bargains in the commercial and high-end residential sectors, foreigners are also keen to undertake property development projects in strong growth regions.
Singaporean institutions such as the Government of Singapore Investment Corp (GIC) and CapitaLand Ltd, for the past decade, have made their way across the causeway and taken up equity stake in established property companies and also, ventured into property development in Malaysia.
In the past two years, the trend has also caught up with the Middle Easterns and Europeans.
Several recent major office transactions include Macquarie Global's purchase of Empire Tower, Crown Princess Hotel and City Square Shopping Centre in Kuala Lumpur for RM680mil, Injaz Mena Investment's purchase of Menara ING at RM495per sq ft (psf) and Injaz AsiaEquity's purchase of Kenanga International at RM555psf.
A survey by Real Estate and Housing Developers Association (Rehda) showed that enquiries from foreigners increased 13% in the second quarter of 2007.
SP Setia Bhd group managing director Tan Sri Liew Kee Sin said the recent spate of multi-billion investments by Middle Eastern consortiums in the property sector “is just the tip of the iceberg and is indicative of more exciting times to come.”
“The joint public-private sector initiative to market Malaysia globally is targeting to attract RM20bil in-flows of funds into the economy,” he added.
Liew said city centre real estate with integrated amenities under the same roof were popular, as foreigners tend to treat their properties as second home and holiday escapade.
Green-themed developments such as hill or beach resorts where residents can get close to nature and soak in the laid-back lifestyle are also catching up.
Established property developer Datuk C. K. Wong said Malaysia's strong development and economic growth had resulted in an upturn in its tourist, residential and commercial property markets.
Many international real estate investors are considering Malaysia as a highly lucrative option for three main reasons - well-priced property, strong economy for sustainable growth and good yields over the medium- to-long term.
“In the past two years, Middle Eastern investors had been coming into the country in a big way. Both their institutional and individual investors had invested close to RM5bil in real estate to-date.
“The recent announcement that they are investing another RM4.1bil in the IDR will make them the biggest real estate investor in the country, surpassing Singapore, which is said to have some RM5bil here,” Wong said.
The growing expatriate community, under Malaysia My Second Home (MM2H) or direct foreign investment in real estate, is also giving rise to demand for quality new accommodation in up-market central districts.
Mah Sing Group Bhd president Datuk Leong Hoy Kum said foreign real estate investment trusts (REITs), property funds and pension funds were driving interest in the local market.
With yields in certain countries below 4%, Kuala Lumpur's office assets - yielding 6% to 8% are very attractive, he said, adding that the sectors with the most appeal for international investors included residential, commercial and tourism-related properties.
Leong said foreign funds and investors from Singapore, Indonesia, Hong Kong, Japan, Australia, Europe, South Korea and the Middle East were going for medium to high-end gated and guarded residential projects, prime condominiums and service apartments in and around the Kuala Lumpur City Centre area, Grade A office towers in Kuala Lumpur's central business district, development land in the IDR and quality retail malls in major cities.
Echoing the strong foreign interest in the local market, Zerin Properties chief executive officer Previndran Singhe said: “We have seen major inflow of funds from the Middle East, Singapore, Hong Kong and recently Japan. I think recent acquisitions by CapitaLand and Maple Tree together with Kuwait Finance House's active acquisition mode is prove of the interest heating up.”
Generally, their interests are for niche residential, including luxury condominiums, gated bungalows and resort residences; and commercial properties like en-bloc offices, malls, hotels and warehouses with good tenants.
DTZ Nawawi Tie Leung executive director Brian Koh said while office sector had always been a favourite, retail and hotels, as well as high-end residential projects were increasingly growing popular.
“The amount of foreign investment continues to increase and international investment into the property sector in Malaysia is predicted to grow at unprecedented levels. Foreign investors are also more comfortable to undertake joint ventures with local developers, or underwrite projects financially,” Koh said.
Tuesday, September 4, 2007
SHL sees profit rising on strong take-up of projects
SHL sees profit rising on strong take-up of projects
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KUALA LUMPUR: SHL Consolidated Bhd sees improved profit for the current year ending March 31, 2008 (FY08) on strong take-up of its recently launched property projects outside Kuala Lumpur.
The group also expects to realise the bulk of its earnings from previously sold properties under the build-then-sell (BTS) concept.
“We see rising contribution from these ongoing projects in the coming quarters,” director Jack Wong told reporters after the group AGM yesterday.
In February, the group launched its maiden project Alam Budiman in Shah Alam, comprising 1,800 units of properties on a 150-acre mixed development township.
The project has a gross development value of RM430mil.
So far, a total 720 double-storey houses valued at RM250mil have been offered over two phases.
According to Wong, the first phase of 420 houses was 60% sold, while nearly half of the 300 units in the subsequent launch in late June was taken up.
To capture the growing demand for landed properties, SHL plans to start selling 150 double-storey terrace houses at its flagship development, Bandar Sungai Long, in Cheras.
The houses are priced from RM300,000.
“The response for both projects is encouraging so far,” Wong said.
Meanwhile, SHL owns 87 acres in Rasa north of Rawang in Selangor, which had been earmarked for future development.
In the more immediate term, the company has teamed up with Tan & Tan Developments Bhd to develop a high-end condominium project in Kuala Lumpur city centre.
For the year just ended, SHL registered a net profit of RM15.56mil, or 6.9 sen per share, on revenue of RM155mil.
It was the second consecutive annual decline since net earnings hit a record RM45.4mil, or 18.7 sen per share, in FY05.
But despite a slow start this year, net profit in the first quarter ended June 30 fell by almost half to RM3.5mil from RM6mil a year ago. It expects the earnings kicker for the year to come in during remaining quarters.
SHL adopts a BTS concept for its projects, which basically means that the company would only receive the bulk of the payment once the property is completed.
Digg this story Add to your del.icio.us account
KUALA LUMPUR: SHL Consolidated Bhd sees improved profit for the current year ending March 31, 2008 (FY08) on strong take-up of its recently launched property projects outside Kuala Lumpur.
The group also expects to realise the bulk of its earnings from previously sold properties under the build-then-sell (BTS) concept.
“We see rising contribution from these ongoing projects in the coming quarters,” director Jack Wong told reporters after the group AGM yesterday.
In February, the group launched its maiden project Alam Budiman in Shah Alam, comprising 1,800 units of properties on a 150-acre mixed development township.
The project has a gross development value of RM430mil.
So far, a total 720 double-storey houses valued at RM250mil have been offered over two phases.
According to Wong, the first phase of 420 houses was 60% sold, while nearly half of the 300 units in the subsequent launch in late June was taken up.
To capture the growing demand for landed properties, SHL plans to start selling 150 double-storey terrace houses at its flagship development, Bandar Sungai Long, in Cheras.
The houses are priced from RM300,000.
“The response for both projects is encouraging so far,” Wong said.
Meanwhile, SHL owns 87 acres in Rasa north of Rawang in Selangor, which had been earmarked for future development.
In the more immediate term, the company has teamed up with Tan & Tan Developments Bhd to develop a high-end condominium project in Kuala Lumpur city centre.
For the year just ended, SHL registered a net profit of RM15.56mil, or 6.9 sen per share, on revenue of RM155mil.
It was the second consecutive annual decline since net earnings hit a record RM45.4mil, or 18.7 sen per share, in FY05.
But despite a slow start this year, net profit in the first quarter ended June 30 fell by almost half to RM3.5mil from RM6mil a year ago. It expects the earnings kicker for the year to come in during remaining quarters.
SHL adopts a BTS concept for its projects, which basically means that the company would only receive the bulk of the payment once the property is completed.
Amanah Raya buys office tower for RM96m
Amanah Raya buys office tower for RM96m
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Agreement signed to lease building to Symphony House
KUALA LUMPUR: Amanah Raya Bhd (ARB) is acquiring a 13-storey office tower in Subang – another potential asset for its real estate investment trust (REIT) business – for RM96.5mil.
ARB yesterday signed a sale and purchase agreement with Puncakdana Sdn Bhd and also inked a 10-year-plus-five agreement to lease the tower to Symphony House Bhd.
Speaking at the signing ceremony, ARB director Datin Aminah Pit Abdul Raman said the office tower, Dana 13, had the potential to be injected into its REIT.
Due for completion by December, the tower will have a net lettable area of about 268,218 sq ft.
ARB’s REIT business is managed by its 70%-owned subsidiary AmanahRaya-JMF Asset Management Sdn Bhd.
Datin Aminah Pit Abd Raman with group managing director Datuk Ahmad Rodzi Pawanteh (third from left), Symphony House Bhd group chief officer Datuk Mohamed Azman Yahya (left) and PuncakDana Sdn Bhd managing director Mah Siew Sian (right). With them is ARB company secretary Zainul Abidin Ahmad (second from right).
AmanahRaya-JMF managing director Datuk Mohamed Azahari Kamil said Dana 13’s purchase was part of the acquisition trail to inject five new properties into its REIT, increasing the fund size to RM700mil by end-September from RM336mil currently.
“We hope to reach the RM1bil mark by year-end,” he said.
On Budget 2008, he said as a REIT player, the group expected the Government to reduce withholding tax so that REITs would appeal to more foreign investors.
When AmanahRaya REIT made its debut in February, 65% of the subscribers were foreign investors, he said, adding: “REIT managers should be allowed to invest in at least 10% to 20% of the net asset value of undeveloped properties.”
The group is currently managing, among others, the Holiday Villa in Alor Star, Holiday Villa Langkawi, Wisma Amanah Raya in Kuala Lumpur, Permanis factory in Bandar Baru Bangi, SEGi College and Wisma UEP in USJ, Wisma Amanah Raya in Bukit Damansara, and South City Plaza (Block A/B) in Seri Kembangan.
Digg this story Add to your del.icio.us account
Agreement signed to lease building to Symphony House
KUALA LUMPUR: Amanah Raya Bhd (ARB) is acquiring a 13-storey office tower in Subang – another potential asset for its real estate investment trust (REIT) business – for RM96.5mil.
ARB yesterday signed a sale and purchase agreement with Puncakdana Sdn Bhd and also inked a 10-year-plus-five agreement to lease the tower to Symphony House Bhd.
Speaking at the signing ceremony, ARB director Datin Aminah Pit Abdul Raman said the office tower, Dana 13, had the potential to be injected into its REIT.
Due for completion by December, the tower will have a net lettable area of about 268,218 sq ft.
ARB’s REIT business is managed by its 70%-owned subsidiary AmanahRaya-JMF Asset Management Sdn Bhd.
Datin Aminah Pit Abd Raman with group managing director Datuk Ahmad Rodzi Pawanteh (third from left), Symphony House Bhd group chief officer Datuk Mohamed Azman Yahya (left) and PuncakDana Sdn Bhd managing director Mah Siew Sian (right). With them is ARB company secretary Zainul Abidin Ahmad (second from right).
AmanahRaya-JMF managing director Datuk Mohamed Azahari Kamil said Dana 13’s purchase was part of the acquisition trail to inject five new properties into its REIT, increasing the fund size to RM700mil by end-September from RM336mil currently.
“We hope to reach the RM1bil mark by year-end,” he said.
On Budget 2008, he said as a REIT player, the group expected the Government to reduce withholding tax so that REITs would appeal to more foreign investors.
When AmanahRaya REIT made its debut in February, 65% of the subscribers were foreign investors, he said, adding: “REIT managers should be allowed to invest in at least 10% to 20% of the net asset value of undeveloped properties.”
The group is currently managing, among others, the Holiday Villa in Alor Star, Holiday Villa Langkawi, Wisma Amanah Raya in Kuala Lumpur, Permanis factory in Bandar Baru Bangi, SEGi College and Wisma UEP in USJ, Wisma Amanah Raya in Bukit Damansara, and South City Plaza (Block A/B) in Seri Kembangan.
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