Malaysia Property | MalaysiaCondo.com

Emkay banking on RM3.8bil Cyberjaya project

2012-02-29T09:25:00.003+08:00

Property developer Emkay Group is embarking on a five-year plan to further develop mixed property projects in Cyberjaya.

Chairman Tan Sri Mustapha Kamal Abu Bakar said the plan, to run from 2012-2016, would see an additional 3.1 million sq ft of office space development.

There will also be 3,250 units of various types of residential units, 856 of commercial units and a light industrial area for automotive support service.

“The total gross development value for this period of development will be about RM3.8bil,” he said yesterday at a media briefing.

Mustapha said the group's commitment to pump in more investments in Cyberjaya showed its commitment and confidence in Cyberjaya's progress of development.

“Together with other notable stakeholders, we have managed to position Cyberjaya appropriately in tandem with our Government's aspiration towards the realisation of Malaysia's first intelligent city,” he said.

Emkay Group had invested some RM1.3bil from 2006 to 2011 in developing office, commercial and residential units.

The projects provide a total net floor area of 1.9 million sq ft of office space, 214 commercial units and 452 residential units.

Mustapha said the group made a profit of RM213mil from the RM1.3bil invested from 2006 until 2011.

Emkay's development of residential units will see an increase of seven times with its plan to build another 3,250 units in the next five years compared with only 452 units built between 2006 and 2011.

“It is anticipated that an additional 7,488 residential units will be offered in the near future, which is capable of housing some 32,000 residents,” he said.

He added that the increase in supply of residential property in Cyberjaya would further boost the development of Cyberjaya as a liveable city.

Mustapha also said the group planned to build affordable homes in Cyberjaya under Projek Perumahan Rakyat 1Malaysia (PRIMA) after being given the nod by the Perak state government to build affordable homes under PRIMA in the state. - By Edy Sarif (The Star)

Mah Sing notches RM2.26b property sales

2012-02-29T09:14:00.002+08:00

Lifestyle developer Mah Sing Group Bhd has reported a RM168.6 million net profit on the back of RM1.6 billion revenue for its financial year 2011.

This represents 43 per cent and 41 per cent increases respectively against the net profit and revenue achieved in 2010.

Property development projects that contributed to Mah Sing's revenue and profit during the year under review included Garden Residence in Cyberjaya, Kinrara Residence in Puchong, Perdana Residence 2 in Selayang, M-Suites in Jalan Ampang, One Legenda, Hijauan Residence and Bayu Sekamat in Cheras, and Icon Residence in Mont' Kiara.

The group closed 2011 with some RM2.26 billion locked in property sales, surpassing the previous year's full sales target of RM2 billion.

Group managing director and chief executive officer Tan Sri Leong Hoy Kum said the 2011 financial performance marks a new record high and represents more than 46 per cent improvement from the RM1.55 billion achieved in 2010.

As for this year, Leong said the group is on track to meet its sales target of RM2.5 billion. "We achieved about RM338 million as at February 15," he said in a statement.

Meanwhile, Mah Sing also intends to roll out at least RM3 billion worth of property launches this year to achieve its sales target.

Leong said the greater Kuala Lumpur projects are expected to make up the bulk (68 per cent) of the launch targets, while Penang and Johor Baru are expected to contribute 20 per cent and 12 per cent respectively.

"We have a clear focus on residential projects this year, and our high-rise and landed residential projects make up 75 per cent of our launch targets.

"Commercial projects are expected to be a strong contributor, at 22 per cent of launch targets, and industrial projects to make up the balance 3 per cent," he said.

Leong said close to 70 per cent of Mah Sing's launches will come from products with an average unit price of RM1 million and below, in view of the current market sentiment and pent-up demand in this segment.

Launches planned for this year include new and existing residential projects such as Kinrara Residence, Garden Residence 2 in Cyberjaya, Garden Plaza in Cyberjaya, M-City in Jalan Ampang, Icon Residence in Georgetown. - By Business Times

IGB upbeat on G Residence take-up

2012-02-23T12:06:00.001+08:00

IGB Corp Bhd expects its strategically-located G Residence condominiums to sell out by the end of the year .

Jointly developed with SHL Consolidated Bhd on a 70:30 basis, G Residence is scheduled to be completed by February 2015.

It is located along Jalan Desa Pandan here on a 1.46ha site and overlooks the Royal Selangor Golf Club. The two-tower 23-storey residential development incorporates a multi-purpose hall, a gym, 30m lap pool and a common garden.

IGB head of property development, Teh Boon Ghee, said G Residence looks over on Lingkungan U-Thant, backs the Polo Club and neighbours the Royal Selangor Golf Club.

"G Residence is surrounded by a mature township of shop offices and cosy apartments. It is very affordable considering its location. Great Eastern Mall is just a leisurely 10-minute walk away," he said.

So far, 80 per cent of G Residence have been sold out. Priced at an average of RM650 per sq ft, the condominiums are sold between at RM610,000 and RM1 million per unit.

"All the units in Block A are sold out. Only 40 per cent units in Block B are still available," Teh told a press briefing here yesterday.

"Those who wish to buy G Residence units for investment can expect a rental yield of about 5.5 per cent. A 1,500-sq-ft unit can be rented out for RM4,000," he added.

Since the start of 2012, Bank Negara Malaysia mandates banks to explain to borrowers the implications of the loans they take, illustrating to them just how much more they will have to pay should the base lending rate go up.

This is applicable to housing and car loans, credit and charge cards, personal financing including overdraft facility and financing for the purchase of shares in the stock market.

Asked if the BNM ruling has affected property sales, Teh replied, "not really. Out of all the sales at G Residence, only a few buyers were seen to take a little longer to secure their home loans."

He then said it is worthwhile to note that starting July 2012, borrowers will not be penalised heavily for early settlement of their housing loans.

Instead, banks will only be allowed to charge for the cost incurred in processing the loan and not for profit loss from the early repayment. - By Ooi Tee Ching (Business Times)

Property prices spike in Shah Alam

2012-02-16T11:06:00.001+08:00

Property prices in Shah Alam have climbed steadily over the last five years due to a combination of factors, including highway accessibility, said a real estate expert.

Azmi & Co director T Nagalingam said Shah Alam is experiencing spillover effects from the rise of property prices in areas like Subang Jaya, Glenmarie, Bukit Jelutong and Kota Kemuning.

He told Business Times that prices for double-storey terraced houses and condominiums have increased by 50 per cent and about 20-30 per cent respectively, in the last five to six years.

"Traditionally, Shah Alam was occupied by PKNS townships. Now, more players have emerged in Shah Alam such as Glomac Bhd, Naza and I-Berhad lifting up the area," he said.

Nagalingam said the New Klang Valley Expressway, Guthrie Corridor Expressway and the widening of roads have contributed to population growth and the price increases.

I-Berhad is developing i-City in Section 7, Shah Alam, sprawled over 30 hectares.

The 10-year development will feature some 12 million sq ft of gross lettable area for a total gross development value of RM4.5 billion.

Some 35 per cent of i-City will comprise residences. The rest will be offices, commercial and retail space, hotel, convention centre and a technology hub.

Since the project started about four years ago, some 500,000 sq ft, or 366 offices suites, and a 70,000 sq ft data centre have been completed.

To date, 20 per cent of the land area has been developed and it has been successful being an MSC Cybercity with complete information communications technology infrastructure.

The development is provided with dual source power supply, multi-telco environment and super broadband accessibility of 200mbps. - By Sharen Kaur (Business Times)

i-City development, phase two

2012-02-14T10:33:00.003+08:00

There will be a second phase of development at i-City where the project owner, I-Berhad, will be rolling out more products this year for investors.

According to I-Berhad marketing director Monica Ong, the firm will introduce its first residential project at i-City, dubbed i-Residence.

It will comprise 346 serviced apartment units in a 33-storey block and duplex villas worth a combined RM250 million.

I-Berhad will also roll out the construction of a one million sq ft mall with four towers sited above it. The towers will boast of cyber office suites, corporate towers, small office/home office, serviced apartment and retail, and small office/versatile office-cum-hotel.

The first projects due for launch on March 23 are the serviced apartments and the villas.

"We reckon that sales are going to be positive looking at the registrations," Ong told Business Times.

The serviced apartments are priced from RM465 per sq ft or between RM365,000 and RM699,000 each, for built-up of 700 sq ft and 1,300 sq ft.

The 20 units of villas, which come in 10 five-storey blocks, will be priced above RM1 million with the units ranging from 2,800 sq ft and 3,800 sq ft.

All the units will be fitted with air conditioners, water heating systems and kitchen appliances.

Being part of the MSC Cybercity, the residences will also get to enjoy dual source power supply, a multi-telco environment and super broadband accessibility, Ong said.

"i-Residence is a product you can compare to Mont Kiara in terms of the design and finishing. You can't find such a product in the immediate vicinity. We have buyers looking to buy for their personal investment, rental income or own use.

"The properties are also attractive in prices. They are not as high as Subang Jaya, where properties are transacting at above RM600 per sq ft. So there is high value appreciation here," Ong claimed. - By Sharen Kaur (Business Times)

Condos on the hills

2012-02-11T10:43:00.003+08:00

Damansara Foresta, a project by Land & General Bhd (L&G), will mark the company's first residential project after a long hiatus on its old tuft. Located adjacent to the Bukit Lanjan Forest Reserve, Damansara Foresta comprises 42 acres of which only 50% will be developed.

The land was purchased decades ago before it was taken over by Hong Kong-based developer Tan Sri David Chiu several years ago.

The re-emergence of the company in Sri Damansara will, in all likelihood, bode well for the company which went through a very challenging period during the Asian financial crisis.

Under its new management headed by managing director Low Gay Teck, previously with the Mayland group, things seem to be moving for L&G again.

Unlike Mayland group, which focuses predominantly on studio units of about 500 sq ft in Sri Hartamas, L&G will take a different route.

Says Low: “Sri Damansara is very much a family community. This provided us the direction for Damansara Foresta, which will focus on sizes ranging between 1,400 sq ft and 1,600 sq ft.”

The salient point about Foresta is the contours of the land. About half of the 42 acres are class three and four slopes where development is not allowed to take place. Only class one and two slopes can be developed. Slopes are divided into four classes class one for slopes below 15 degrees, class two between 15 and 25 degrees, class three between 25 and 35 degrees and class four, above 35 degrees.

Says its marketing manager Lim Kok Yee: “It is a very beatiful piece of land and there are not much of greens left in the Klang Valley.”

The view from the top will be lovely and the company is leveraging on this. As for the class three and four slopes that we cannot build on, these will remain and be enhanced for the community's use.”

There will be a canopy bridge and hideaways dotting the “undeveloped” portion of the land.

Lim believes the pursuit of greenery whether landscaped or natural will portend well for the project.

Although the project is yet to be launched, the first two blocks comprising a total of 464 units are nearly fully sold.

The project was opened for sale early last month at RM500 to RM550 per sq ft. Due to popular demand, the second block was opened for sale the same month.

Lim says the project will be officially launched at the end of this month with sales starting for the third block. They are still working on the price. The first block was launched with units with a built-up of 1,400 sq ft priced at more than RM700,000. When completed, the project will have 928 units. The entire project, comprising four separate projects on that strip of land, will have a total of 2,700 units.

So far, buyers are predominantly upgraders from Sri Damansara, Desa ParkCity and Petaling Jaya who are attracted to the green factor. Damansara Foresta is also expected to add quite a bit of buzz into that established locality which has been around for about 20 years. It is a neighbourhood with lots of wide tree-lined roads but has seen little development the last 20 years. The most recent was 8trium, an office block also by L&G after the Mayland take-over. That office block will be completed in about three months.

TA Global Bhd, the property arm of TA Enterprise Bhd, is also developing Damansara Avenue which comprises serviced apartments and commercial office and retail blocks. While the acreage L&G's 42 acres versus TA Global's 48 acres are about the same, the similarity stops there. Damansara Foresta is a residential freehold development while Damansara Avenue will be on commercial land with retail and office elements with higher utilities and tax rates.

Damansara Foresta will be set apart from Damansara Avenue because of the green factor as it could only make use of half of its land for development purposes while Damanasara Avenue will be pretty much another integrated mixed development. Damansara Foresta is located 180 metres above sea level while TA Global's project fronts the Damansara-Puchong Highway (LDP). The elevated land will give Damansara Foresta a certain ambience that TA Global's project will not.

Access may be an issue in time to come, however. Although the developer has painted a pretty picture with accessibility via LDP, Middle Ring Road 2 (MRR2), New Klang Valley Expressway and Sprint Highway, traffic is very heavy on some of these roads with the LDP and the MRR2 being very congested during the peak hours.

New developments along the LDP will eventually feed into the already congested highway and surrounding infrastructure. Other than Damansara Foresta and Damansara Avenue, new and upcoming developments include the 25-acre Empire City project and three other projects by the Empire group in Damansara Perdana, several condominium projects by Perdana ParkCity Sdn Bhd and new developments in and around Sg Buloh.

Unless the government approves new infrastructure, the congestion along the LDP and surrounding roads and highways is expected to be tremendous. - By THEAN LEE CHENG (The Star)

Property mart to see 10pc growth in 2012

2012-02-10T15:47:00.003+08:00

The property market is expected to see 10 per cent growth in transaction value this year from over RM40 billion last year, according to property consultant CH William Talhar & Wong Sdn Bhd.

Managing director Foo Gee Jen said the growth is slightly lower compared to 11 per cent last year, adding the appreciation in market value is mainly driven by cost rather than demand.

"The higher land value, shortage of labour and rise in building material prices rather than buyers' demand prompted our forecast value," he said.

He said the property market would stay buoyant on the back of the strong housing property segment, with the growth mainly contributed by demand from the young population.

Speaking at a media briefing on the outlook for the property sector today, he said office rentals would remain stagnant or decline for older buildings but there would be higher asking rentals for newly completed buildings with green certification and Multimedia Super Corridor status.

With over 0.74 million sq m of new office space expected to enter the market this year, there will be a very competitive office leasing environment, he said. "Hence, older buildings will face pressure from declining occupancies as tenants seek newer, better quality offices," he added.

For the condominium sector, Foo said luxury condominiums could face the threat of oversupply in the future.

On new non-landed developments, he said a total of 13,716 units in 47 developments are currently under construction, with about 2,900 units to be completed this year.

"With the average occupancy rate at 68 per cent, this gives some pressure on the developers, whose current focus is more on smaller and more affordable unit sizes of 46.5 to 93.0 sq m," he said.

Selling prices range from RM9,136 to RM21,520 per sq m in the KLCC area, and RM7,532 to RM10,760 per sq m in the Mont' Kiara/Sri Hartamas and Kenny Hills areas, he added.

However, he said, sales of new housing developments are expected to be sustained this year due to the low interest and unemployment rates and attractive financing packages.

He said the take-up rate will be maintained at last year's rate, with the House Price Index at 11.4 per cent for Kuala Lumpur and 9.6 per cent for Selangor.

"Last year, the landed residential sector showed strong movement on the supply side while demand was correspondingly positive, with most new launches recording high sales rates of between 60 and 70 per cent," he added. - Business Times

E-Suite @ Emerald Avenue

2012-02-08T16:12:00.007+08:00

E-Suite @ Emerald Avenue is located in Selayang consists of a 24-storey tower houses 188 designer suites. The Emerald Avenue E-Suite comes in 1, 2 or 3-bedrooms with built-up area ranging from 612 sq.ft. to 1,190 sq.ft.

The facilities at Emerald Avenue include a sky pool, pool deck, cafeteria, multipurpose hall, mini theatre, gym, kids zone, reading / music room.

Property Project : E-Suite @ Emerald Avenue
Location : Selayang, Selangor
Property Type : Serviced Residence
Tenure : Freehold
No. of Blocks : 1
No. of Storey : 24
Total Units : 188
Built-up Area : 612 - 1,190 sq.ft.
Developer : Engtex Emerald Sdn Bhd
Website : www.emeraldavenue.com.my

Boulevard Residence Damansara

2012-02-07T23:59:00.004+08:00

Boulevard Residence Damansara is a leasehold condominium project by Ong Chong Realty Sdn Bhd, located at Petaling Jaya, Selangor. Boulevard Residence Damansara consists of two blocks, a 14-storey and a 15-storey condominium with a total of 300 units. The built-up area is ranging from 850 sq.ft. to 1,900 sq.ft. with 3 three designs to choose from. Each unit has 3 or 3+1 bedrooms.

The facilities at Boulevard Residence Damansara include a lap pool, poolside gym, children playground, sauna/changing room, jacuzzi lounges, kindergarten, reading room, multipurpose hall, prayer room.

Property Project : Boulevard Residence Damansara
Location : Petaling Jaya, Selangor
Property Type : Condominium
Tenure : Leasehold
No. of Blocks : 2
No. of Storey : 14 & 15
Total Units : 300
Built-up Area : 850 - 1,900 sq.ft.
Developer : Ong Chong Realy Sdn Bhd
Website : www.ocr.com.my

Residence 8 @ Kuala Lumpur

2012-02-03T21:23:00.005+08:00

Residence 8 @ Kuala Lumpur is a freehold condominium located at Old Klang Road, KL. Residence 8 consists of two blocks offers 308 condominium units in total. There are only 8 units on each floor. The condominium unit has a built-up area ranging from 1,229 sq.ft. to 1,486 sq.ft. Every unit comes with 4-bedroom and 4-bathroom.

The facilities at Residence 8 include a infinity pool, children splash pool, children playground, garden pavillion, barbecue area, Tai Chi deck & Yoga lawn, gymnasium , multipurpose hall, kindergarten/nursery, prayer room, sauna & changing room, laundry service, 3 tiers security system.

Property Project : Residence 8
Location : Old Klang Road, Kuala Lumpur
Property Type : Condominium
Tenure : Freehold
No. of Blocks : 2
No. of Storey : 23
Total Units : 308
Built-up Area : 1,229 - 1,486 sq.ft.
Developer : Ong Chong Realty Sdn Bhd

Hua Yang to focus on Malaysian market for now

2012-02-03T11:10:00.001+08:00

Property developer Hua Yang Bhd, will explore the overseas market when the company achieves its targeted RM800 million revenue in the next few years, says chief executive officer Ho Wen Yan.

"We hope to grow our revenue to RM800 million by 2018. By then, we will be at a comfortable size and can start looking for opportunities overseas or other high-end segments," he said.

For the nine-month period ended December 31 2011, Hua Yang's revenue was RM222.13 million.

Ho said the company could bring its affordable housing model and technical expertise to emerging markets like Vietnam, Cambodia and Indonesia.

"Currently, venturing overseas is not in our plan, not within the next three years. The Malaysian market is still very strong, especially for our segment, the affordable housing.

"After three years, we will take a look. I hope these countries are ready for foreign investors then. We are now exploring opportunities," he said.

On the domestic front, Hua Yang plans to launch its next township "Pulai Hijauan" in Johor in April or May.

"Everything is ready now for the official launch of the township," Ho said.

Pulai Hijauan, with an estimated gross development value (GDV) of RM380 million, is about a kilometre from the company's existing township, Taman Pulai Indah, in Skudai.

Ho said the total GDV for the company's ongoing projects and yet-to-be-developed ones was RM2.4 billion. Of this, the GDV for ongoing projects is about RM983 million. - By Business Times

Sime Darby Property honoured for sustainable development efforts

2012-02-03T11:07:00.004+08:00

Sime Darby Property Bhd has won two awards for outstanding achievements in the property development sector in Malaysia and Southeast Asia.

It bagged the BCI Asia Awards 2011, the second consecutive year that it has won the honour. The award covers Malaysia, Hong Kong, Indonesia, the Philippines, Singapore, Thailand and Vietnam.

Sime Darby Property managing director Datuk Wahab Maskan said it was an honour to be one of the top 10 developers in Asia and to be acknowledged for its sustainable efforts in Malaysia.

"These awards reflect the appreciation of society and customers for our efforts to provide sustainable development for our stakeholders. We will continue to work even harder to be the preferred developer in the region," he said.

Sime Darby Property was also recently conferred the Prime Minister's Hibiscus Award 2012 for Notable Achievement in the Environmental Excellence Category.

It won the award for its Bukit Jelutong township, following a two-stage assessment process that included a site visit and detailed submissions on 14 areas covering a range of environmental issues. - By Business Times

Mirage Residence, KLCC

2012-02-02T16:04:00.008+08:00

Mirage Residence is a freehold condominium project developed by Perspektif Vista Sdn Bhd (OSK Property) located at Jalan Jalan Yap Kwan Seng in KLCC, City Center. The project comprises a 35-storey condominium block with a total of 102 units. The built-up area ranging from 850 sq.ft. to 1,688 sq.ft. with choices of unit types of 1-bedroom, 2-bedrooms and 3-bedrooms.

Facilities at Mirage Residence include gym room, aerobic & yoga room, function room, meeting room, salt water lap pool, children pool, sauna, balneotherapy spa, water pavilion, sky garden, sky park, sky terraces.

Property Project : Mirage Residence
Location : KLCC, Kuala Lumpur
Property Type : Condominium
Tenure : Freehold
No. of Blocks : 1
No. of Storey : 35
Total Units : 102
Built-up Area : 850 - 1,688 sq.ft.
Developer : Perspektif Vista Sdn Bhd (OSK Property)
Website : www.mirageresidence.com.my

SP Setia Australian venture pays off

2011-11-12T12:09:00.001+08:00

LAST Monday, Franklin Street in Melbourne was abuzz as kompang players and lion dancers readied themselves at the entrance to SP Setia Bhd’s new sales gallery.

Malaysia’s biggest property developer launched its Fulton Lane property that morning, which is presently just an empty parking lot across the street, but by 2014 will be home to two high-rise apartments.

If the turnout was any indication, buyer interest is intact. Corporate-types and well-heeled guests packed the gallery showcasing SP Setia’s maiden venture into Australia.

With this property, the developer is hoping to attract those who seek proximity to Melbourne’s many amenities; Queen Victoria market, RMIT and La Trobe University are some of the places in walking distance to it.

Sandwiched between two streets, the one-acre, A$470mil gross development value project will comprise a 29-storey tower facing Franklin Street with 291 apartment units, and a 45-storey tower facing A’Beckett Street with 409 units. Connecting the two blocks is a retail podium that rises to nine levels. SP Setia president and CEO Tan Sri Liew Kee Sin says the first tower has sold about 80% of its lots and the second tower, the taller of the two, about 30%.

The first tower was bought by mostly Malaysians – at its preview sale a few months ago, 70% was snapped up within three days. The second tower is targeted at local Australian buyers as well as those from Indonesia, Singapore, Brunei, and Hong Kong. In a few weeks, SP Setia will head to China to market it there. Buyers for the first tower are investors and owner-occupiers while the second tower will primarily be owner-occupiers.

The project is expected to fetch a margin of 20%, comparable to developments in other major cities in emerging markets.

Fulton Lane’s apartments, which come with one, two and three-bedrooms, start from A$365,000. Facilities include a garden terrace, gymnasium, indoor heated lap pool, a lounge cum reading room, two areas for barbecue, and a theatrette.

The “lane” in its name is not accidental – SP Setia plans to create a lane between Franklin and A’Beckett Street to mimic Melbourne’s “laneway culture”.

And no wonder - the city’s lanes and alleys are its claim to fame, where tourists and locals flock to savour Melbourne’s coffee and cuisine.

SP Setia’s venture into Australia has also enabled it to pick up on that market’s best practices, Liew says. For one, environmental sustainability is a prime concern there, and being a developed country, Australia also operates more transparently.

This, Liew points out, is something SP Setia can learn from.

But even as Australia prospers from a mining boom, there is relentless talk of oversupply in the housing market.

The Australian Bureau of Statistics recently released data showing that new construction of apartments in Victoria for the March quarter this year hit 5,168, the second highest on record. Similarly, a report out last week from the Housing Industry Association found that new home sales were down 14% in the third quarter, and suggested the drop in house prices may accelerate.

CB Richard Ellis (M) Sdn Bhd executive director Paul Khong says Melbourne’s property market is currently “toppish” due to the supply from various new projects.

“It has been a popular destination for foreign buyers investing in Australia especially for education purposes, but the prices have already moved up quite a bit over the last 24 months,” he tells StarBizWeek.

“We expect residential prices in Melbourne to be flattish and do not see any drastic oversupply that may cause a major dip in capital values.

“We expect capital values to stabilise as we see good support on the tenancy side,” he says, adding that residential yield is about 4% to 5% and anticipated to stay at that level.

Nonetheless, Melbourne is widely acknowledged as Australia’s fastest growing city, its population boosted by students and emigrants.

The State Australian Cities report by an Australian ministry says the population in Melbourne grew by 605,000 to 4.077 million over the past 10 years and is projected to rise to five million by 2027 at the current growth rate.

SP Setia is probably hoping for that outcome as it is in the midst of planning for an upcoming project in South Yarra, also in Melbourne, which sits on 2.23 acres and may accommodate up to 329 apartments.

A property analyst thinks that Fulton Lane can count as SP Setia’s first successful foray overseas.

“Their project in Vietnam is not making money, the Singapore one has yet to take off, and they’ve given up on the China joint-venture. So it (Fulton Lane) is good news,” he says. - By John Loh (The Star)

F&N partners with Singapore’s FCL to develop Section 13 land

2011-11-12T12:05:00.003+08:00

Fraser & Neave Holdings Bhd (F&N) and its subsidiary, Vacaron Company Sdn Bhd (VCSB), will team up with with FCL Centrepoint Pte Ltd (FCLC) from Singapore to develop two parcels of leasehold land in Section 13, Petaling Jaya.

AmInvestment Bank Bhd told Bursa Malaysia yesterday that pursuant to the shareholders agreement, F&N and FCLC would each have 50% equity in VCSB to develop the land which is now occupied by Premier Milk (Malaya) Sdn Bhd and F&N Dairies (M) Sdn Bhd, both of which are subsidiaries of F&N.

The proposed joint venture (JV) between F&N and FCLC via VCSB, being the owner of the land measuring 554,264 sq ft, was to undertake a proposed mixed development project comprising hotel, offices, shopping mall, retail properties and residential properties. According to the SSA, FCLC agreed to subscribe 500,000 ordinary shares in VCSB for RM500,000 cash for the 50% stake.

“The company is unable to disclose the specific details of the proposed development as VCSB has yet to obtain the relevant authorities's approval for the proposed development and building plan,” it said.

The proposed JV is expected to contribute positively towards the future financial performance of the F&N Group.

However, it is conditional upon approvals obtained from shareholders of F&N at the forthcoming EGM and any relevant authorities, if required.

Meanwhile, during the commissioning of the F&N Dairies plant at Pulau Indah yesterday, CEO Datuk Ng Jui Sia said the RM350mil plant was completed ahead of schedule and ready for commercial production early next year.

“The plant will replace our dairy manufacturing facility in Petaling Jaya and this new plant will have an initial planned capacity in excess of 14 million cases annually,” he said.

On the current flood situation in Thailand, which had affected F&N's dairies operation in that country, Ng said production capacity at the Petaling Jaya plant had been ramped up by an additional 20% to cater to the needs of the Thai and Indochina markets until the situation returned to normal. The Pulau Indah plant is the second greenfield canned milk plant after its RM250mil dairy plant in Rojana, Thailand, which was officially opened last June. - By Edy Sarif (The Star)

KL on the way to be a world-class city?

2011-11-12T12:01:00.001+08:00

When I travel to different countries, I often ponder what makes some cities so appealing. What are the qualities that distant themselves from others and make them world-class cities?

When we mention London, New York, Melbourne, Tokyo and Vancouver, different people may relate different images to these cities. But one thing in common is the acknowledgment of their world-class standard, a recognition that illustrates the important roles they play and the significance of the countries these cities belong to.

A world-class city is an important node point in the global economic system. It can be a major international political, cultural, financial or commercial centre, and it can be cities of all sizes, not only the largest.

So, does Kuala Lumpur or Greater KL have the potential to become one of those world-class cities? I believe, for Greater KL to achieve world class standards, both “hardware” and “software” of the city must be further improved and enhanced. Both elements are interconnected - a city that is rich in software but lacks the hardware development is like a talented pianist who goes on the stage without a piano, or rather a grand piano on stage without a pianist. We just can't stage a good performance in either situation.

In terms of hardware, the infrastructure projects which have long term impact and serve as major catalysts to the economic and social development should be given priority. The proper development and housing plan, a better public transportation system, an urban renewal programme and improved telecommunication infrastructure should continue to be emphasised as it will have a multiplier effect and attract more people to move into Greater KL.

The success of the Greater KL plan relies on a large population. Greater population equals to better economies of scale and a higher demand for diverse goods and services.

The aim of growing Greater KL's population from six million to 10 million by 2020 will see strong demand for housing, new commercial and financial areas and a public transportation system. Therefore, it is only logical that we build sufficient infrastructure now to prepare for that future growth.

Last year, the Government announced the Greater KL plan as one of the twelve Key Economic Areas (NKEA) identified under the Economic Transformation Programme (ETP). Following this announcement, there many projects were identified to push the country towards a developed nation.

The initiatives that have been announced by the Government include the RM39bil MRT project and RM1.9bil allocation for the River of Life Programme.

These projects will help create a more efficient and beautiful city that will eventually create a better living environment for all. These plans are essential to turn the city into a lovely urban area, and the execution of the plan is key in whether the Greater KL plan is a success or failure.

All these efforts, combined with the “software development” such as increasing the skill, education and cultural level of people, growing their awareness towards environment protection and instilling a sense of belonging and ownership in them are also among the fundamental criteria to nurture our city to be on par with other global cities.

A city with superior hardware needs good talent to operate and to grow into a sustainable city.

According to the ETP update early this month, the Greater KL plan seems to progress well with the MRT ground-breaking for Sungai Buloh-Kajang line held last July, and the ongoing tender process.

To date, there are already two letters of intent from multinational corporations to relocate their headquarters to the Greater KL area, and 450 professional talents have returned to our home country under the Returning Expert Programme. These are good indicators for the city and country.

Now, back to the question which I have raised earlier “Does KL or Greater KL have the potential to become a world-class city?” With the current development and progress, I believe we are heading towards that direction though there is still a lot of room for improvement.

The route ahead is clear if we are to put the foundation right and tackle the fundamental issues, such as upgrading our infrastructure, accelerating the housing and development plan and improving our public transportation system.

A world-class city is often a significant identity of a country. It is a miniature of a country in terms of its economic, social, cultural, education and infrastructure development. Most of the time, it forms the perception people have towards that particular country.

Since a city is meant to accommodate people from all walks of life, a likeable, convenient and vibrant environment is hence a good place for all to live and work in.

For Greater KL to be a likeable city, every stakeholder in the city needs to play their part, including our citizens. Every one of us is responsible in building a clean and safe city, and to take care of it as if it is our own home.

One must remember that we are the valuable “software” that ensures the city runs smoothly and effectively. Ultimately, people are still the most important element in this equation.

l Datuk Alan Tong is group chairman of Bukit Kiara Properties, he was the FIABCI World president and recently named Property Man of The Year 2010 by FIABCI Malaysia - By Datuk Alan Tong (The Star)

Make city living enticing

2011-11-12T11:56:00.002+08:00

The heavy traffic leading into Kuala Lumpur in the morning and out of the city in the evening may be acommon sight, but there are a number of lessons that can be learned from it.

I'm sure many of us would ask why people who work in the city can't just stay in the city as then there would not be such a massive flow of traffic.

This daily occurrence on roads leading into the city and those within the city congests the city in the day time, and by night the town becomes quiet again, and this is a telling sign that Klang Valley folks have not embraced the concept of city living.

It is worth finding out why the capital city is still not popular as a residential address.

Instead of opting for the convenience of living in the city and avoiding the hassle of having to brave those heavily congested roads on a daily basis, many have chosen to stay in the suburban areas.

Although many of them may be feeling quite overwhelmed by now, they have little choice but to put up with the daily “pilgrimage” on a daily basis just to get to their work place.

The way our cities and towns have been planned certainly has something to do with it, and it looks like we can do with some tweaking and re-planning to turn our cities around to become lesser of a dilemmaand more friendly to city folks and road users.

Our town planners should learn from the current inadequacies and shortcomings that are plaguing our cities, and it is still not too late to make amends and attend to those.

Identifying the prevailing shortcomings that have rendered city living unappealing for many Klang Valley folks will provide the necessary solutions.

One of the obvious reasons is a lack of affordable housing and community living projects in the inner city.

Many would not mind owning a house in the city if there are more residences that have an average built-up of 1,000 sq ft to 2,000 sq ft, and are priced between RM300,000 to RM500,000.

But sadly, most of the housing units are quite sizeable from 2,000 sq ft to more than 10,000 sq ft and of course these are tagged at nothing less than RM1mil a unit making them far from affordable.

For this reason, many of those working in the city centre have little choice but to brave the daily jams. There is also a large number among them who commute from as far as Bentong, Nilai and Seremban.

But for many, living in the suburbs also means they have the luxury of choosing from a wider range of housing options at lower prices, while city living usually equates to a higher cost of living.

To address the issue of cost, which developers usually attribute to the high cost of land and construction materials, the redevelopment plans for the Sungai Besi airport and other Government land (Jalan Cochrane and the 3,300 acre Rubber Research Institute in Sungei Buloh) should have a larger ratio of residential component versus commercial property.

There is still an over supply of commercial property, including office space, in the capital city, and priority should be given to increase the number of residential units in those projects to meet demand.

Developers should also look into adopting newer technology and construction methods and materials that have higher quality and durability at lower cost.

If we look around, there are many old buildings that are deplorable and have been vacant for many years, and it will be a great idea to restore these buildings and give them a new lease of life.

We can take a cue from Singapore's Urban Redevelopment Authority (URA) as it goes about redeveloping the city state's old buildings by offering them up for redevelopment through open tenders.

As a one-stop agency, the URA will invite developers to bid through open tenders and submit their plans for the redevelopment process.

The selection of the successful tender will be based on a set of pre-determined criteria, which besides costing, includes the ability of the project to add value to the people's living, working and recreational space.

Likewise, there are also many opportunities for the dilapidated parts of our city to be revived and for some of the older and idle commercial buildings and assets to be torn down and rebuilt into residences.

In the planning process, it is important to retain a healthy balance between the built and unbuilt by retaining some parts of the natural environment as green lungs and parks.

Open space is important for people to unwind and take a breather from the hustle and bustle of city life and to promote a happier and healthier populace.

l Deputy news editor Angie Ng believes KL city folks deserve to have at least another two public parks (in the likes of London's Hyde Park) to walk about. - By Angie Ng (The Star)

Mixed feelings over mixed-development projects

2011-11-12T11:49:00.003+08:00

Concerns rising over the possibility of an oversupply of office and retail space

As a new line of mixed large-scale property developments go on stream to spur economic growth, market observers and those involved in the property sector are cautious. Their main concern: an oversupply of officespace.

Reports and data coming from think tanks suggest there are concerns about the situation, despite some assurances that the Government has already done proper studies and planning.

Among the projects are the KL Metropolis by Naza TTDI Sdn Bhd that will add millions of square feet space of office, retail and residential space, in addition to the ongoing KL Sentral project and the recent launch of the KL International Financial District (KLIFD).

Property consultant Rahim & Co, through an e-mail, tells StarBizWeek that as for the first quarter, occupancy rates of prime offices in Kuala Lumpur and Petaling Jaya range between 60% and 97% and a healthier 75% and 98% respectively.

“We are in the opinion that the oversupply cannot be solely attributed to these mega-projects but also other stand alone purpose-built offices in the city centre,” the statement says.

Excluding the upcoming mega-projects, a total of 6.69 million sq ft of new office space will be completed in Kuala Lumpur by 2015. Based on an average annual take up of 1.8 million sq ft of office space in Kuala Lumpur, Rahim & Co estimates the occupancy rate of prime office building to be between 82% and 85%.

However, with the effort and incentives put forward by the Government, it believes more multi-national companies will be operating in Kuala Lumpur, and will subsequently occupy the available office space.

“We expect rental rates to stabilise in the next few years, especially with the completion of new office buildings by 2015 in Kuala Lumpur. Average rental rates of prime office buildings in Kuala Lumpur is expected to moderate around RM7 per sq ft by 2015 compared with current rates averaging at RM6 per sq ft,” it says.

Rahim & Co adds that due to locational factors, for example, integration with rail network and image branding, the mega-projects will be able to command higher rental rates; potentially 5% to 10% more than the average rate.

To date, it says the total net lettable area of prime office space in Kuala Lumpur stood at 40.88 million sq ft. By the end of 2011 and 2015, an estimated 6.69 million sq ft of new office space will be completed in Kuala Lumpur (excluding KL Metropolis and KLIFD) and most of these projects are currently under construction; contributed largely by stand-alone purpose built office towers and a few form part of a mixed development project. 50% of the new supply will be located in the Golden Triangle Area and are purely driven by private initiatives.

“Meanwhile, KL Metropolis, KLIFD and KL Sentral are Government initiatives, with strong synergies with the private sector, to propel Kuala Lumpur towards world class status. Prime components will be office space supported by retail, serviced apartments, hotels and a convention centre,” it says.

With total gross development value of RM15bil, KL Metropolis covers a total land area of 75.5 acres located near Matrade Jalan Duta. The key development component (apart from ratail, hotels and apartments) is the 1.07 million sq ft convention centre which aims to strengthen Kuala Lumpur as the preferred meeting, incentive, convention and exhibition destination over its regional competitors that include Singapore and Guangzhou.

“KLIFD is another national mega-project located near Imbi area fronting Jalan Tun Razak. This 75 acres integrated mixed development project aims to establish Kuala Lumpur as the regional financial centre.

KL Sentral, on the other hand, is a world class transportation hub valued at RM8bil and has been divided into 14 land parcels, each representing a different function. Some of these lots have been fully developed and are already in use, while others remain under construction or are still waiting for work to commence,” it says.

Upon completion, KL Sentral will comprise Stesen Sentral, corporate office towers and business suites, five-star international hotels, luxury condominiums, a retail mall, services apartments and, an international entertainment and exhibition centre.

The opening of The Hilton and Le Meridien hotels in September and October 2004 respectively has added a new dimension to KL, providing a myriad of prestigious lifestyle amenities at an international level.

By 2015, a total of approximately 6.3 million sq ft of office space will be available within KL Sentral. “In general, we are in the opinion that these mega-projects will act as a development catalyst which will then help to spur growth in the immediate locality. For instance, Brickfields enjoys a spill over effect from KL Sentral,” it says.

Over the last eight years, the profile of Brickfields has slowly morphed and there has been hardly any new land in Brickfields for further development over the last several years. Property prices there have shot up after KL Sentral opened in 2001 and have been going up steadily over the years. A 4-storey shoplot, with good frontage and in good condition, that was sold for RM1.7mil in 2002 can now command around RM2.8mil. The rent of a ground-floor space can go up to RM10,000 a month while the upper floors can command RM1,500 to RM2,000 a month.

“We believe KLIFD will eventually change the landscape of its surroundings. The prime challenge will be to establish the anchor tenant of the office tower. For instance, the establishment of Petronas in KLCC has raised the demand for office space surrounding KLCC which is mainly generated by oil and gas related companies. Similarly, KLIFD will need to identify the anchor tenant that will help to augur growth in its surrounding areas. In general, with more office space, more office population will be attracted. With higher influx of professionals, both local and international, demand for other components such as serviced apartments and retail will increase accordingly,” says the property consultant.

Connectivity to a rail network is also pertinent in ensuring the success of these mega-projects. It is learnt that KL Sentral and KLIFD will be connected to the proposed MRT line.

“This transit-oriented development will eventually create a new development corridor along the rail line similar to the Rossyln-Ballston Corridor in Arlington, Virginia served by Washington Metro Line and Burnaby, Vancouver served by Sky Train line. Upon completion of KLIFD, the surrounding areas which are currently occupied primarily by old retail businesses and offices will be transformed into a more modern, vibrant and liveable area,” says Rahim & Co.

Meanwhile, the development of KL Metropolis will help to disperse the concentration of office space to the outskirts of the Kuala Lumpur city centre.

Generally, it will be similar to Mid Valley City as being a self contained integrated commercial centre outside the city centre. While Mid Valley City is acting as the southern Kuala Lumpur commercial hub serving areas such as Bangsar, Seputeh, and Petaling Jaya, KL Metropolis will function as the northern Kuala Lumpur commercial hub with prime coverage areas including Mont Kiara, Damansara Heights and Sentul. The availability of a major convention centre will position the locality as an international trade and exhibition district in Kuala Lumpur.

“Notwithstanding the fact that these mega-projects will bring a positive impact to the nation's economy, we still need to be cautiously optimistic on its success. As these projects are highly dependent on private investments, both local and international, the uncertainty in the global economy may pose investment worries,” it says.

In addition, there has been a trend developing. Companies are shifting their operations outside the city centredue to bad traffic and higher operating costs in the city. Companies are also drawn to the larger and modern office space on offer in buildings outside the city area .Petaling Jaya is currently the focal point of new supply of office space and has gradually seen a higher influx of multi-national companies.

Property consultancy CB Richard Ellis (M) Sdn Bhd says the Klang Valley will face an oversupply of office and retail space within the next two to three years while capital values for residential units would see some increases in 2012, but at slower rates compared with the past 18 months.

Its executive chairman Christopher Boyd, in a recent briefing, says that while 2011 is a strong year in terms of demand for office space in the Klang Valley, rental values might succumb to the oversupply within the next 18 months.

The total office space supply in the Klang Valley stands at 80.8 million sq ft at the end of the first half of 2011 (compared with 80 million sq ft at the end of 2010).

However, Boyd says it is estimated that an additional 25 million sq ft of office space will come on stream in the Klang Valley by 2015 (excluding mega projects such as the Naza group's KL Metropolis development and the KLIFD).

He says that vacancy rates in Kuala Lumpur are under 13% and though this is not an alarming number, the vacancy rates are expected to increase in tandem with supply.

A report by CB Richard Ellis notes that prime gross asking rentals were flat at RM7 per sq ft with only a handful of buildings above this level.

Since rising steadily from 2002 to 2008, rentals at top city centre buildings have remained mostly flat for the past two years.

Boyd says recent average transaction prices of Grade A office space generally ranges between RM800 and RM900 per sq ft. However, there are higher prices than these being achieved in the market like the RM1,100 per sq ft or more in KL Sentral and SP Setia Bhd's KL Eco City. - By Edy Sarif (The Star)

Dijaya, Ivory team up

2011-11-12T11:39:00.003+08:00

Dijaya Corp Bhd and Ivory Properties Group Bhd will jointly develop a land in Penang that could generate RM10 billion in gross development value.

The project in Bayan Mutiara, Penang, will be undertaken by a joint-venture company called Tropicana Ivory Sdn Bhd (TISB).

Dijaya will hold 49 per cent of TISB, while Ivory Properties will have the remaining 51 per cent.

The development covers 41ha of land, of which 27ha is existing land. Another 5.6ha will be reclaimed.

The land is being bought for RM1.07 billion. It will be converted into a mix of residential, shopping mall, hotel, office suites, office towers, retail spaces and open mall with boulevard.

It will also include construction of Grade A offices and a specialist medical centre if needed.

The development will be completed over the next eight years and work on the first phase is scheduled to begin next year.

Under the deal signed yesterday, Dijaya will extend financial assistance to TISB in the form of shareholders advances, guarantee, indemnity or collateral of up to RM525.4 million or 49 per cent of the total consideration of the development land.

Ivory Properties may also provide financial assistance of RM482.5 million for the same purpose.

The first tranche of the RM1.07 billion land purchase will be funded through internally generated funds by Ivory and Dijaya.

Subsequent payments will be funded through a mix of internally generated funds and/or bank borrowings. - By Business Times

Sime to unveil E&O plan soon

2011-11-11T09:46:00.001+08:00

Sime Darby Bhd, which bought a 30 per cent stake in Eastern & Oriental Bhd (E&O), will unveil its potential collaboration with the property developer on November 25.

Sime president and group chief executive Datuk Mohd Bakke Salleh said more details would be known on that day, which is also the day that Sime will announce its first quarter results ended September.

"We will announce the E&O collaboration, outlook for the next financial year as well as Sime's 2012 KPI (Key Performance Index) target on November 25," Bakke said after its annual shareholders meeting.

Sime bought the 30 per cent stake in the Penang-based property developer for RM766 million in August. The conglomerate, however, has not nominated any board representation in E&O, even though it has management control.

"No plans yet on board representation but the directors will have to go through the process."

Bakke said Sime also had no plans to increase its stake in E&O. - By Zaidi Isham Ismail (Business Times)

Sentul medium-cost flats to be built under Govt programme

2011-11-11T09:43:00.001+08:00

Melati Ehsan Holdings Bhd will design and build medium-cost flats in the vicinity of Sentul, after clinching a RM297mil contract from the Government.

In unveiling the location of the project, a source revealed that the company would embark on the project on two separate parcels of land in the area, which would ultimately see more residences being supplied to cater to the growing demand in Kuala Lumpur city and its surrounding area.

The company had announced earlier that it had won the contract to build residential flats for the Housing and Local Government Ministry's People's Housing Programme (PPR), without revealing further details.

“It (Melati Ehsan) will be tasked with the design and building of the flats, while the authorities are still responsible for selling and distributing the units,” the source said.

According to the source, the two pieces of land are currently occupied by squatters, and it would be a resettlement plan (for the people staying there) and the project would provide new residences for eager homeowners.

The company said the contract had been awarded to its wholly-owned subsidiary, Pembinaan Kery Sdn Bhd, and that it had just received the letter of award.

It said the contract would be split into two portions: one part is valued at RM82.1mil for the provision of 500 units of flats, and the other is for 1,600 units of flats worth RM215.9mil.

The flats will probably be sold for between RM135,000 and RM164,000 each. They are expected to be completed earliest by 2014, assuming the construction of the 500 and 1,600 units are completed on schedule by 30 and 36 months respectively.

If the flats are sold at the expected prices, they will be categorised as medium-cost flats, which suggests the units will have better design and built-up than the low-cost flats in previous PPR projects.

The source said compared with the old PPR flats, which only provided one parking space for every four units, the new flats would have one parking lot for each unit.

Meanwhile, Melati Ehsan is also busy with a RM1.62bil joint property development project with the Selangor State Development Authority in Kelana Jaya, where it is redeveloping the PKNS Sports Complex.

The 30-year old complex, which includes a field, six tennis courts and a clubhouse, will most likely make way for a sports-themed mixed development with five 35-storey apartment blocks, two 15-storey business complexes, a performing arts centre and an integrated sporting hub. - By Choong En Han (The Star)

Demand for luxury residential properties expected to turn cautious

2011-11-07T10:15:00.004+08:00

Demand for luxury residential properties is expected to turn cautious, given greater economic uncertainties and a tightening of credit by banks, DTZ Research said in its latest Property Times market report.

In the report for Kuala Lumpur for the third quarter, the research house said there would be an increasing downside risk on prices at the higher end of the market if the conditions got worse next year.

“The residential sector experienced significant completions in the quarter and this will put pressure on rentals, especially in the larger prime condominium units where demand has not kept pace.

“Generally, while price remains stable, new pressure to sell is expected as some owners taking delivery of completed units may wish to exit their investments. There remained selective demand for new launches,” it added.

The quarter saw the completion of a significant number of projects with an additional 2,278 condominium units in Kuala Lumpur, including two city-centre projects: Brunsfield Embassyview and The Pearl, eight projects in Mon't Kiara, and one in Bangsar.

A further 52 condominium units are expected to be completed by the end of the year, all of which are in the city centre.

In 2012, about 5,384 units are expected to enter the market with about 92% or 4,952 units located in the city centre.

A boutique luxury condominium project in Persiaran Raja Chulan, St John Woods Residence, has reportedly received strong response, with almost half of the 48 units booked within two days. The selling price of the units are between RM3.3mil and RM4.4mil each (or RM900 per sq ft).

According to Property Times, the average capital value of high-end condominiums in Kuala Lumpur is generally stable at RM626 per sq ft, with properties in the Kuala Lumpur city centre averaging RM902 per sq ft.

“The market may see short-term selling pressure as owners of newly delivered units may exit their investment,” it pointed out.

The average rental value of high-end condominiums in Kuala Lumpur is stable at RM3.50 per sq ft per month but new completions will keep the rate competitive, especially for larger units where demand has not kept pace with supply.

It noted that to maintain or increase pricing level, developers had resorted to smaller units marketed under the guise of small-office home-office in mixed developments to appeal to younger buyers seeking more lifestyle options and to investors.

The outlook for the office sector is likely to be more sombre in the light of substantial pipeline supply in 2012.

Three office buildings are expected to be ready by the fourth quarter this year, which will add 1.1 million sq ft to the year's total supply of about 2.5 million sq ft. They are D'tiara Amanaraya Corp Tower, Crest Tower and Lot E @ KL Sentral, of which the first and third properties will be substantially owner-occupied.

The report pointed out that external headwinds were expected to create uncertainties and the overall net absorption rate could further slow in the fourth quarter, adding that the situation would not provide comfort to a market that was expecting 2012 to be a potential tipping point with some 7.4 million sq ft projected for completion in the office market.

During the third quarter this year, leasing activities were driven mainly by the oil and gas, information technology (IT) and financial sectors.

With no new completions adding to competitive pressure, office rents remained stable with prime gross rental rates at RM6.22 per sq ft a month.

Among the major leases and relocations were that of RHB Insurance at The Icon for 100,000 sq ft and Touch n Go taking up 67,000 sq ft at The Horizon, Block 6, Bangsar South.

The third quarter saw no change in the capital value of office buildings, with good quality suburban offices sold at RM600 to RM700 per sq ft. The average capital value of prime office in Kuala Lumpur stood at RM807 per sq ft.

The investment property market saw an increase in both value and activities, with total value topping RM1.3bil in the third quarter, an increase of 39% from the second quarter.

There were 10 deals in the quarter five offices, two mixed developments, and a retail, industrial and residential property each compared with eight in the second quarter.

The biggest deal recorded in the third quarter was the sale via public auction of The Putra Place, which was sold to Sunway REIT for RM513.9mil.

The other major transaction was a prime office building in Cyberjaya Bangunan Lestari Kumpulan Emkay that was on a long-term lease to Shell, with an estimated initial yield of 5.7%.

Most of the properties sold are located in and around Kuala Lumpur, with one transaction recorded in Penang, a Tesco-leased hypermarket in Tanjung Sri Pinang, and in Johor Baru where a major prime stratified office, Menara Landmark, was sold via a public auction to developer Daiman Bhd.

The investment market was more active with strong deal flows from investors and also supported by end-users buying for own occupation. But going forward, the market is expected to be dominated by local investors as foreign investors have become more cautious.

In terms of pricing, Menara Landmark was sold at RM164 per sq ft, which the report noted was significantly below the RM600 to RM700 per sq ft fetched by good quality suburban offices in Kuala Lumpur.

Three of the transactions during the quarter involved mid-sized offices purchased for owner-occupation. The buyers are from the IT, oil and gas, and infrastructure sectors which are key sectors under the Economic Transformation Programme.

As for the retail sector, Property Times said rental growth was likely to be moderate going forward, especially with new malls still sprouting up in the suburbs in an increasingly tougher operating environment.

About 860,000 sq ft of new space was added in the quarter in Kuala Lumpur with the completion of three major retail centres Suria KLCC (extension), Solaris 2 and 1 Shamelin Shopping Mall. The total stock reached 45.8 million sq ft in the Klang Valley.

It said the overall outlook for the retail sector was expected to remain optimistic due to a stronger ringgit, with total retail sales projected to grow from RM182.44bil in 2011 to RM279.83bil by 2015.

The average occupancy rate at retail centres registered a slight increase to 91% in Kuala Lumpur and 88% outside the capital. However, newly completed retail centres have experienced slow leasing rate, given the increasing market saturation of retail facilities even in good suburban locations.

Meanwhile, growth in online shopping poses a challenge to the domestic retail industry which is facing higher costs of goods and operations.

In 2010, there were about 1.1 million online shoppers with an average RM2,500 spending per head. According to a research by AC Nielson, the online purchasing market had reached RM1.8bil in 2010 and is expected to increase to RM5bil in 2014.

“This rising trend is a challenge to local merchants who will have to adopt multi-channel retail strategy to capture the rising online market,” Property Times added. - By Angie Ng (The Star)

Jaya One to expand

2011-10-29T10:10:00.001+08:00

Jaya One, one of several developments in Petaling Jaya's Section 13, will be increasing its footprint with a new phase of commercial development to complement the current five commercial office buildings located at the junction of Jalan 13/6 and Jalan Universiti.

Construction of the new phase has already started and will comprise 400 retail, residential and office units on an additional four acres of land, says Tetap Tiara Sdn Bhd executive director (Jaya One) Charles Wong.

“When we launched the first phase of Jaya One in 2004, it took a bit of convincing the market that office properties would sell. We did not do residential because we knew that it would not work. Now that we have completed the first phase, we are ready to launch residential units in the form of serviced apartments,” he says.

The new phase will comprise 30 units of retail and 130 office units. There will also be 240 units of serviced apartments spread over two blocks. The new phase will consist of a gross built-up area of about 993,000 sq ft, bringing the gross area up to about 1.7 million sq ft.

Prior to the development of Jaya One, the 11-acre site was occupied by a factory.

The retail portion is priced between RM850 and RM1,300 per sq ft. Sizes range from 1,200 to 3,500sq ft. The office portion is priced at RM580 per sq ft. The first residential tower of 13 storeys is priced at RM600 to RM650 per sq ft while the four-storey, second residential block is priced at RM600 per sq ft.

“Section 13 will be a dynamic market as the local authorities have put many new requirements in place. There are several serviced apartment projects coming up. Among the new requirements is the need for developments to be inter-connected with one another. The most practical way will be the provision of bridges to link the projects together. We will be building connecting bridges to neighbouring developments to allow easy access and movement among the buildings within Section 13,” says Wong.

He says there will be greater setbacks between neighbouring lots and internal roads are being planned to avoid adding pressure to the current three roads that service the area. Currently, the three roads are Jalan Universiti, Jalan Kemajuan and Jalan Semangat. Internally, Section 13 is served by Jalan 13/6.

Wong says the authorities are trying to get land owners to amalgamate pieces of land to avoid ad hoc development.

The gross development value for the new phase is RM360mil for the portion of the development the company is selling. The company will retain a certain portion for recurring income as it did with Palm Square, which comprises mainly food and beverage outlets in the first phase of the project.

Wong says thus far, most of the buyers are investors with about 20% buying for their own use. The first phase is currently fully occupied with offices being rented out between RM2.50 and RM2.80 per sq ft, retail outlets at RM6.50 and RM7 per sq ft and Palm Square RM8.50 and RM10 per sq ft.

Wong says a large number of those who bought into the new phase had previously bought into the first phase. Besides Tetap Tiara's serviced apartment blocks, there are currently two other serviced apartment projects being planned for Section 13. - By The Star

Garden-themed M City sold out

2011-10-29T10:04:00.002+08:00

Mah Sing Group has garnered RM412mil sales from its garden-themed mixed development, M City Jalan Ampang which is located less than 5km from KLCC.

First previewed in June this year, all 401 units of designer SoHo (small office, home office) suites worth RM295mil have been taken up.

Response to the 24 retail units worth RM117mil launched a few weeks ago has also been overwhelming, with the 15 units of three-storey boutique retail, four units of single level retail, four kiosks and supermarket fully sold.

The 39,000sq ft supermarket was acquired by gourmet supermarket chain Village Grocer.

“The location and concept of M City dovetail with the business strategy for our gourmet supermarkets,” said Village Grocer managing director Ong Kim Too.

“We operate in prime developments as anchor retailer/tenant, at sites with a concentration of our target customers,” he added.

A mixed development comprising designer SoHo suites, residential suites, sky villas and boutique retail, M City Jalan Ampang which sits on a 2.02ha freehold site has an estimated gross development value of RM1.4bil.

Located along the famed Embassy Row, M City is a stone’s throw away from Ampang Point which has a proposed MRT station, and is less than 2km away from Gleneagles Hospital, Great Eastern Mall and M Suites. With such an attractive location, there is a catchment of more than 500,000 from the surrounding matured developments.

Mah Sing group managing director Tan Sri Leong Hoy Kum said, “M City is Kuala Lumpur city’s one and only garden city community, and the first ever to boast multi-level thematic hanging gardens in Malaysia.

“We have various thematic hanging gardens spanning over 1.61ha for every sixth floor, with concepts such as sky garden, tropical sanctuary, spring park, bamboo groove and lagoon park which has become the talk of the town and a key selling point. A four-tier clubhouse houses a gymnasium and an infinity pool with an excellent city and lake view has been planned for the enjoyment of residents. The project is also designed to achieve the Green Building Index (GBI) Gold standard by increasing the efficiency of resource usage.”

More than 2,500 parking bays have been allocated for residents, tenants and visitors of M City, with separated residential and commercial parking lots and parking entry points.

He added, “We have carefully planned the project and most of the units are smaller sizes to meet current market need. With such good response to our SoHo and retail units, we intend to launch our residential suites in our sales gallery in Icon Jalan Tun Razak soon.”

The new launch are residential suites priced from RM550,000.

Buyers shall be spoilt for choice with the numerous configurations available, from studio units (506sqft) priced from RM550,000, 1 bedroom (674sqft), 2 bedroom (886sqft) and 3 bedroom units (1,653sqft). All these options are also available as duplex units to ensure that discerning buyers can get exactly what they need.

These units are semi-furnished and amongst the furnishings and electrical appliances to be provided by Mah Sing include bedroom wardrobe and vanity cabinet with mirror, kitchen cabinets, air conditioners, refrigerator, washer cum dryer, microwave oven, built in hood and hob as well as water heaters. Mah Sing shall also absorb the legal fees for sales and purchase agreement. - By The Star

Mah Sing targets RM2.5bil sales next year

2011-10-18T09:32:00.003+08:00

Mah Sing Group Bhd will focus on lower-priced and smaller units of serviced apartments in the next two years to cater to demand of the young population.

Managing director/chief executive Tan Sri Leong Hoy Kum said the property developer would also offer lower-priced strata landed units.

“We are targeting to achieve sales of RM2.5bil next year and, in order to do this, we will adjust our product mix, in line with today's sentiment and needs,” he told StarBiz.

He said the group had a sales target of RM2bil for this year. As of September, it had already achieved RM1.74bil in locked-in sales, he said, adding that the company had a total of 30 on-going projects. Last year, the company enjoyed RM1.5bil in sales.

“We are still positive on the sector for the next year and we hope, despite a prolong European debt crisis, there will be a soft landing. We believe the demand for properties will continue to be buoyant because we have a young population and there is a lot of rural-urban migration,” he said.

Leong said property purchase was very much driven by two factors job security and sentiment.

The country's savings rate and healthy employment market are the other factors contributing to the strong property sector.

“Beginner homes below RM500,000 will meet buyers' needs,” he said.

The company will be offering residential properties ranging from landed with gated and guarded communities, smaller serviced apartments and small and versatile offices on commercial titles for the coming Star Property Fair from Nov 25 and 27. It will be promoting its projects in Icon City in Petaling Jaya, Icon Residence in Mont'Kiara, M City Jalan Ampang, Garden Residence in Cyberjaya and Kinrara Residence in Puchong. Although the company is promoting its Klang Valley projects, the group is also active in Johor, where it has five projects and another five in Penang.

“We see continued demand for landed residential properties in good location, especially in gated and guarded schemes. Investors know that land is scarce and construction cost will always continue to rise, although in manageable doses. It is inevitable that properties in good locations will continue to appreciate as well, and astute buyers will want to lock in their investments at today's prices,” he said.

In today's market, he said, prices of high-end homes were expected to soften a bit.

“We expect mid- to high-end uniti to be popular. Semi-detached units priced at about RM1.4mil or thereabouts will be in demand. For bungalows it will be those RM3mil or thereabouts. The location, accessibility and the availability of amenities are other contributing factors to the success of a project,” he said.

At the same time, the company is also replenishing its land bank. It recently purchased a piece of land in Rawang of about 90ha for RM92mil. - By Thean Lee Cheng (The Star)