CapitaMalls confident of meeting payout target

KUALA LUMPUR:CapitaMalls Malaysia REIT Management Sdn Bhd (CMRM), the manager of CapitaMalls Malaysia Trust (CMMT), is confident of achieving its target of 7.45 sen distribution per unit (DPU) amid the positive microeconomic outlook for Malaysia this year.

CMMT, a shopping mall real estate investment trust (REIT), recorded a total annualised DPU of 7.26 sen for last year, exceeding its forecast of 7.16 sen as stated in its listing prospectus.

CMRM chief executive officer Sharon Lim said the company’s strong operating performance demonstrated its ability to proactively manage its assets and create value for unitholders.

“Ours malls maintained close to full occupancy (98.3 per cent), while shopper traffic grew to 16.2 per cent (13.1 million) in the fourth quarter ended December last year compared to the year before (11.3 million).

“We also expect to complete our proposed acquisition of Gurney Plaza extension by this year,” she told reporters during a briefing on the company’s fourth quarter results here yesterday. Sharon said CapitaMalls Asia’s recent acquisition of Queensbay Mall in Penang would form the seed asset for its planned RM1bil Malaysia retail property fund, which would provide a pipeline of assets for CMMT to acquire.

“CMMT will continue to actively pursue acquisition opportunities on its own, to increase its asset size and strengthen its position as Malaysia’s largest ‘pure-play’ shopping mall REIT,” she said.

For the fourth quarter of 2010, CMMT achieved a distributable income of RM24.8mil which was 3.1% higher than its forecast of RM24.1mil while DPU was recorded at 1.84 sen, 3.4 per cent higher than its forecast of 1.78 sen.

CMRM chairman Kee Teck Koon said: “With our quality portfolio of three strategically located shopping malls in the higher growth urban centres of Penang, Kuala Lumpur and Selangor, CMMT is well positioned to capitalise on the expansion in Malaysia’s retail sector.”

By Bernama

Demand for new houses to surge, says Knight Frank MD

There will be a surge in demand for new houses in Malaysia as Asian property investors look for properties, and expatriates come here for projects under the Economic Transformation Programme (ETP).

"The expatriates will be here for the duration of the projects such as the Mass Rapid Transit (MRT), among others. They would need a place to stay," said Eric YH Ooi, managing director of Knight Frank.

Ooi said, Asian investors are returning as Malaysia still offers the best value for properties, as compared to Singapore and Hong Kong where the property price is about five times more expensive.

Malaysia is the prime investment location in Asia because of its stable property market and relative affordability.

Many investors are coming to the market, rich with cash, and with an appetite for luxury properties in Kuala Lumpur, Ooi said on the sidelines of a property market outlook summit in Kuala Lumpur recently.

The investors from Singapore, Hong Kong, Indonesia, Taiwan, South Korea and Japan are buying condominiums, apartments and bungalows in the KLCC, Bangsar, Mont' Kiara and Kenny Hills areas.

Ooi said Malaysia's positive economic outlook and improvement in the rental market is driving them here.

During 2008/2009, rental of the properties fell by 20 per cent to 40 per cent in some locations in Kuala Lumpur, because of the financial meltdown and more supply in the market.

"It has improved and rentals are hovering between RM3.50 per sq ft and RM7.00 psf now," Ooi said.

Ooi expects more than 15 per cent of the sale of luxury properties this year to come from foreigners.

But this is low compared to 2008, where some 40 per cent of the sales were contributed by foreigners.

"We expect it to return to levels of 30 per cent," he said.

By Business Times

It’s to spice up PISA

Highly impressive: Artist impression of an aerial night view of the sPICE centre within the Penang People's Park project.

GEORGE TOWN: The Penang government has defended the need for the Subterranean Penang International Convention and Exhi-bition Centre (sPICE), saying that the project would “save” the Penang International Sports Arena (PISA).

State Local Government and Traffic Management Committee chairman Chow Kon Yeow said PISA was in bad shape and needed to be turned around.

“When we took over in 2008, the PISA was in deplorable condition.

“Be realistic, despite being touted as a meetings, incentives, conventions and exhibitions (MICE) centre, PISA is a sports centre. We need a proper MICE facility because there’s great potential in this industry.

“The previous administration was also pushing for a MICE centre but failed to deliver,” he told reporters after visiting a school here yesterday.

Chow was commenting on a call by the Penang Gerakan for more transparency on the RM300mil project.

On Tuesday, party local government bureau chairman Teh Leong Meng urged the state to make public the winning bidder’s tender documents.

He also questioned the rush to build sPICE, adding that the state government and Penang Municipal Council (MPPP) had failed to manage the PISA well.

He said the council should just concentrate on its core business of keeping cleanliness, maintaining roads and building more hawker centres.

Chow said a dialogue would be held with stakeholders to discuss the feedback received.

“All views will be taken into account. Before we sign the contract for the project, all details will be revealed,” he said, adding that the council would make the RM50mil payment in stages.

“Upon signing, the MPPP will only pay RM10mil.

“The rest will be paid as work on the project progresses,” he said, adding that the state government had placed “great importance” on cleanliness and solid waste management and would not neglect its duties.

The sPICE is part of the Penang People’s Park (PPP) project which includes a new 2.8ha public park, a refurbished, repaired and upgraded PISA and Aquatic Centre and a new hotel with retail outlets and a car park.

The public have been given two weeks from Jan 22 to communicate their views by e-mailing MPPP president Patahiyah Ismail at hiyah@mppp.gov.my or submitting their views at PISA.

Quote of the day 27th January

Today's quote of the day . Enjoy :)

"I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character."

Penang No 1 in total capital investment

Penang has come out top in attracting total capital investments for manufacturing projects in 2010, according to the Malaysian International Development Agency (Mida).

Property transactions may hit RM100bil

KUALA LUMPUR: A total of 342,179 property transactions worth RM96.77bil were recorded between January and November last year, which means the full year's transactions could reach the RM100bil mark, said Knight Frank Malaysia managing director Eric Ooi.

Ooi was commenting on figures provided by the Valuation & Property Services Department director general Datuk Abdullah Thalith Md Thani at the Property Market Outlook for 2011 yesterday.

“This is the first time transactions value has reached this figure,” said Ooi at the event organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia.


Eric Ooi ... ‘This is the first time transactions value has reached this figure

In light of this, and considering Malaysians penchant for property investments, Ooi said it was unlikely that property values would fall. It may not rise as much as it did last year, but the uptrend is there.

Ooi, together with Henry Butcher chief operating officer Tang Chee Meng, said property value rose between 30% and 40% last year.

“This is the first time property went up so much,” Tang said, adding that he had never seen such record growth for the property market in 30 years.

“The condominium market saw a price rise of between 60% and 100% between 2003 and 2008. This pales in comparison to the rise in value of landed units which rose as high as 40% in just one year. If one were to average out the rise in condominium prices, it is about 20% a year,” Tang said.

Earlier, in his overview of the Malaysian economy and the Malaysian property market, director general of Valuation & Property Services Department Abdullah Thalith said it was very significant that the transaction volume between the 11-month period increased 12.2% year-on-year, but the value of transactions increased at a higher rate of 35% from RM71.67bil to RM96.77bil.

“The recovery of the Malaysian economy has reinvigorated the overall property market,” he said.

In terms of lending in the broad property sector, the purchase of residential property took up the lion share of bank loan, at 58.8% compared with the purchase of non-residential property, at 22.1%. Construction took up 9.6%.

“Credit expansion for the broad property sector in the banking system increased from RM342.09bil as at the end of September 2009 to RM391.25bil as at end-September 2010,” he said.

“This means the residential property sub-sector remained the main mover of the property market,” he said. In this residential market, transactions in Kuala Lumpur recorded a growth of 8.2%, Selangor 7.2%, Johor 3.6% and Penang (island) 9.7%.

Terraced houses continued to dominate the market, especially in Selangor with 27,165 transactions, Johor with 12,555 transactions and Penang 4,358 transactions.

The city of Kuala Lumpur recorded more condominiums changing hands, 10,333 units versus terraced housing at 3,756 units.

By The Star

Property deals this year to breach RM100b

However, the growth of Malaysia property sector may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties

PROPERTY transactions will surpass RM100 billion this year but the sector will not enjoy 35 per cent growth as it did last year, said a government official.

Growth may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties resulting from government initiatives under the 2011 Budget.

Datuk Abdullah Thalith Md Thani, director-general of the Valuation and Property Services Department in the Ministry of Finance, said the volume of properties transacted will, however, grow by double digits to more than 350,000.

Between January and November 2010, there were a total of 342,179 properties transacted, worth RM96.78 billion.

Abdullah Thalith thinks there will be more than RM100 million in sales recorded in December, breaching RM100 billion for the whole year.

The RM100 billion mark, a record high for Malaysian properties, would be 35 per cent more than 2009.

In 1998, the value of properties transacted was about RM60 billion, with 5 to 10 per cent growth per annum.

Abdullah Thalith told reporters yesterday in Kuala Lumpur at the 2011 property market outlook summit that the positive economic outlook and the Economic Transformation Programme will drive growth this year.

He said the prime movers will be the redevelopment of the Sungai Besi land, Batu Cantonment army base, Rubber Research Institute land in Sungai Buloh, Matrade project by Naza Group, the 100-storey tower by Permodalan Nasional Bhd and the Mass Rapid Transit project.

"If all these projects can start this year, it will uplift the market. We expect more people to buy low to medium-end properties. We also expect movements in the luxury segment, commercial and industrial," he said.

By Business Times

TILB focuses on mainland Penang projects

KUALA LUMPUR: Newly-listed Tambun Indah Land Bhd (TILB) expects to complete the first of its seven ongoing property projects on mainland Penang in the first quarter of this year.

The company will complete the second phase of its RM79mil Juru Heights bungalow project by March, according to managing director Teh Kiak Seng.

“We have seven projects ongoing this year with a GDV (gross development value) of RM530mil. They include medium-cost apartments and mid-range housing developments,” he said after the listing ceremony of TILB on the Main Market of Bursa Malaysia yesterday.

Going forward, Teh said TILB would continue to develop projects on mainland Penang (as opposed to the island) as properties there were more affordable.


Teh Kiak Seng (second from left) and Tambun Indah Land directors monitoring the company’s share price on Tuesday.

“We are getting more purchasers coming to the mainland because they can't afford prices on the island,” he said, adding that it would be more viable for TILB to tap the mainland property market.

“The Penang state population is about 1.6 million. The island has 700,000 people. There are more people staying on the mainland and it is also attracting a lot of FDI (foreign direct investments),” Teh said.

He cited, as an example, Japan-based printed circuit board maker Ibiden Co Ltd, which has invested in a RM1bil plant at Penang Science Park. He also mentioned Nasdaq-listed Rubicon Technology Inc, a leading global light-emitting diode (LED) manufacturer, as well as US-based Honeywell Aerospace, a leading provider of avionics and electronics, which have also invested substantially in the mainland.

“Connectivity (in Penang) is also being improved with the construction of the second Penang bridge,” Teh said, adding that the Federal Government had big plans to develop Butterworth.

“Expansion at Butterworth Port has just been completed. The main railway station is also in Butterworth. All of this will create opportunities such as new jobs and attract more people, who will need to buy houses to be closer to the job market.”

Teh also said the Penang mainland property market was more active and had better growth prospects.

“During the recession in 2009, the Penang island property market grew by 0.3%, but mainland Penang grew by 9.3%,” he said.

“Also, from 2002 to 2010, the island housing market grew by 4%, but mainland grew by 5.4%.”

According to Teh, TILB has a land bank of close to 300 acres, all located on the mainland.

“We have an option of another hundred acres. We move very fast, we buy land and develop. We don't buy land to keep as it's too costly. This has been our business model since the beginning.”

TILB was negotiating with land owners in Penang to acquire land for projects in 2012 and “actively seeking” land in the Klang Valley, he said, adding: “We've seen some land in the Klang Valley but we haven't bought any. We're still looking but the project must be viable.”

On another note, Teh said the company had set a dividend payout policy of 40% to 60% of its annual net profit.

TILB recorded a net profit of RM25.37mil for its financial year 2010.

The company opened at 80 sen and closed at 80.5 sen, a 10.5 sen premium over its issue price of 70 sen. A total of 41.5 million shares were traded, making it the second most active counter of the day.

By The Star

Bolton eyeing 44ha site in Penang

PROPERTY developer Bolton Bhd is looking to expand its landbank in Penang with a potential acquisition in Teluk Kumbar this year.

Bolton executive chairman Datuk Azman Yahya yesterday said it was hopeful to conclude the proposed acquisition of the 44ha site within two to three months.

The land on the south-western end of Penang island is estimated to cost Bolton RM150 million, Azman added.

"Our maiden project in Penang - Surin, has been encouraging and we are now looking at expanding our landbank on the island via acquisitions and joint ventures," he told reporters after a topping out ceremony for the Surin Tower B project located in Tanjung Bungah.
Surin is a two-block 28-storey luxury condominium project which is built on a freehold parcel of elevated land and carries a development value of RM199 million.

Of the project's 390 units, about 77 per cent had already been sold out and about 30 per cent to 35 per cent of the buyers were foreign, Azman said.

The units, which were sold at prices ranging from RM345,998 to RM1.2 million, offer amenities such as an infinity pool, rooftop garden, two covered carpark bays per unit, three tier security, a barbeque area and sky decks.

On the planned purchase of the Teluk Kumbar land, Azman said Bolton was looking at building landed property units, along with apartments in a gated community.

"Our target investors for this proposed project would be locals," he added, saying that Bolton remains on the lookout to buy land in Tanjung Bungah.

"We remain convinced of Penang's vibrancy and growth prospects and we are actively looking for development opportunities.

"The residential market remains buoyant and this is a segment which we want to focus on," Azman said.

In the Klang Valley, he said the company will soon unveil a block of luxury serviced residences at Jalan Bukit Ceylon, an exclusive gated community in Ukay Perdana, and the 51 Gurney development.

The latter project is touted as Malaysia's first and only super luxurious condominium which comes complete with spacious driveway on every floor and a car park within every unit.

By Business Times

Property transactions to top RM100b in 2011

Property transactions are expected to exceed RM100 billion in worth this year from RM96.77 billion in the first 11 months of last year, said Director General of Valuation and Property Services Department, Datuk Abdullah Thalith Md Thani.

He also said the recovery of the economy has reinvigorated the overall property market with the residential property sub-sector remaining the main mover of the property market.

The value of transactions in the residential sector between January and November last year rose 7.6 per cent to RM222.29 billion taking up 60.2 per cent share of the volume of property transactions, he said during a press conference here today on the upcoming 4th Malaysian Property Summit 2011.

The transactions of commercial properties rose 21.3 per cent while that of industrial properties went up 25.6 per cent, agriculture 17.9 per cent and development land 24 per cent.

In the residential property sub-market, the major states recorded positive growth with the city of Pulau Pinang recording the highest rate of 9.7 per cent followed by Kuala Lumpur at 8.2 per cent and the state of Selangor with 7.2 per cent growth.

By Bernama

Maybank launches ringgit-based mortgage facility for UK property

KUALA LUMPUR: MALAYAN BANKING BHD expects a take-up of RM60 million within the next six months for the ringgit mortgage facility offered to Malaysians who want to purchase property in London.

The bank’s “Overseas Mortgage Loan Scheme”, launched on Thursday, Jan 13, will finance completed or residential and commercial properties under construction in London Zone 1 to Zone 3 in prime locations such as City of London, Westminster, Knightsbridge, Kensington and Chelsea.

“Key features of Overseas Mortgage Loan Scheme include repayment in ringgit, high margin of financing up to 85%, flexible repayment and long tenure of up to 30 years or 70 years of age whichever is earlier,” it said.

Maybank’s deputy president and head of community financial services, Lim Hong Tat said Malaysians would be able to borrow in ringgit for purchase of property in London with the loan taken in Malaysia.

“Borrowing in ringgit will protect customers from currency fluctuations on their monthly loan repayments and savings as the sterling pound is anticipated to rise this year from its current low exchange rate with the ringgit,” he said.

At present, Malaysians purchasing properties in London have to obtain financing from UK based banks and pay the monthly installments in sterling pound and they are exposed to foreign currency exchange fluctuations.

Lim said financing from UK based banks for Malaysian citizens currently was only available for “buy-to-let purposes”, namely, the property must be purchased for investment purposed and not for own occupation.

As for Maybank’s ringgit-based mortgage facility, he said it would be offered in the form of term loan, overdraft or a combination of term loan and overdraft.

“We anticipate a take up of RM60 million for this new facility within the next six months. This is in view of attractive property valuation in London and overseas buying interest to peak before April 2011 when the new 5% sales tax is imposed for properties above £1 million.

“The current strong ringgit against the sterling pound is also another factor that will encourage Malaysians to buy before the anticipated rise at the second half of the year,” Lim said.

Lim said the new mortgage was designed for high net worth customers who were showing increasing interest in buying properties in that part of Europe, due to the favourable currency exchange rate, attractive property price as well as for those who have children studying in the London area.

“London currently offers attractive advantages for property purchase to non residents and the Bank has tied-up with reputable international real estate agencies to assist customers on UK regulations,” Lim said.

By The EDGE Malaysia

Boosting demand for properties

It was a mixed year for the Malaysian property sector in 2010.

A few things to note include the implementation of the LRT and MRT systems, the Greater KL Transformation Plans, the New Economic Model, the 10th Malaysia Plan and the Economic Transformation Plan (ETP).

The plans are to pave the way for the country to become a high-income nation, boosting demand for properties in Greater KL, Penang and Johor.

The government also announced plans to open up some of its prized landbank around Kuala Lumpur and the Klang Valley for redevelopment.

Among the government-owned prime land are the 20ha at Jalan Cochrane, some 12ha in Ampang Hilir, and smaller parcels at Jalan Stonor, in Brickfields and Bukit Ledang, off Jalan Duta.

But the crown in the jewel is the redevelopment of the Rubber Research Institute land in Sungai Buloh and the Sungai Besi land, and building of Matrade Centre and the Kuala Lumpur International Financial District (KLIFD)

OSK Research Sdn Bhd head of research Chris Eng said the LRT and MRT projects have added excitement to the market as some homebuyers have begun to speculate which housing areas would benefit from the locations of these stations.

"These projects in the short term will create excitement and attract more capital into the region, thereby potentially boosting or sustaining the values of certain properties," Eng told Business Times.

Malaysia's residential property sector is expected to register the highest sales transactions on record in 2010 of around RM50 billion (2009: RM42 billion).

MIDF senior analyst Syed Muhammed Kifni Syed Kamaruddin said this can be attributed to accommodative home-financing schemes and greater housing demand, especially from upgraders.

"Residential sales transactions are estimated to rise by some 20 per cent annually to breach the RM50 billion mark for the first time in 2010," he said.

Another notable good news is the guaranteed downpayment of 10 per cent for houses below RM220,000 for first-time buyers earning below RM3,000 a month, implying full financing of the value of a property.

Muhammed Kifni said the move will spur demand for affordable housing.

A new scheme where the Employees Provident Fund contributors can withdraw more from their Account 2 savings for their first home will help the market.

The bad news would be the cap on the loans-to-value ratio for third housing mortgages and onwards by Bank Negara Malaysia (BNM) to curb speculation.

Effective November 3 last year, house buyers who have two mortgages and apply for their third loan can only get 70 per cent financing of their house value.

Real Estate and Housing Developers' Association president Datuk Michael Yam had said this will affect the upmarket segment by 20 per cent.

BNM's Overnight Policy Rate (OPR) hike to 2.25 per cent from a record low of 2 per cent in 2010 has softened the market a little.

But Previn Singhe, founder of Zerin Properties, said broad-based landed properties and condominiums in good location will continue to move.

By Business Times

Property and other loans growth poised to slow down

PETALING JAYA: Loans growth is poised to slow down as lending indicators are showing signs of moderation in credit expansion, said analysts.

ECM Libra Investment Research expects household loans growth to slow down as property sales cool down amid credit tightening and policy measures to curb excessive speculative activities.

In a report issued yesterday, ECM Libra said the loans growth momentum could be curbed by slow deposit growth which has continued to lag credit expansion at 6.5% year-to-date or 7% on an annualised basis.

Despite slower growth rates, leading loans indicators remain at comfortable levels considering that absolute levels of loan applications and approvals stayed close to peak levels. Its calendarised loans growth forecasts is 8.4% for this year and 10.9% for last year, according to AmResearch Sdn Bhd's report yesterday.

AmResearch added that net interest margins might see less pressure with the average lending rate stabilising.

OSK Research Sdn Bhd said in a report yesterday that this year's loans growth would remain robust as the rise in interest rates from record lows was unlikely to dampen pent-up credit demand spurred by a recovering economy.

AmResearch said the slowdown in the residential loans segment was positive, considering that household debts had risen significantly over the past one year.

“The future (loans) growth will likely be driven partly by execution of projects under the government's Economic Transformation Programme (ETP),” it added.

While the ETP implementation will be predominantly financed by the private sector and result in higher business loans growth, ECM Libra said it was cautious on the prospect of project implementation delay at this juncture.

The banking industry saw an overall loans growth of 13.2% year-on-year (y-o-y) in November 2010 due to business and household sector loans expansion as compared with the 12.4% y-o-y loans growth seen in October 2010.

“This growth has surpassed the previous high of 12.9% y-o-y growth almost two years earlier in December 2008. The peak before this would be the 14.9% growth in April 1998. Thus, industry loans growth is now at the highest level since the Asian financial crisis,” said AmResearch.

However, slower growth was seen in leading indicators. Loans applications, approvals and disbursements all expanded slower on a y-o-y basis for November 2010 at 13.2%, 4.7% and 0.7% against October's 20.8%, 21.4% and 11.8% respectively.

Despite the slower loans growth, AmResearch said the absolute amount of loans applied of RM56bil was still close to peak levels compared with the monthly average of RM43.4bil for 2009.

It added that the muted increase in loans approved in November 2010 was not a major concern, as it came mainly from a 74.5% y-o-y drop in other purpose segment (which included lumpy loans approved to the public sector).

OSK Research said that loans applications dipped as applications for the business and household sectors trended lower. It added that weaker demand for construction and purchases of fixed assets other than land and buildings led to slower business applications.

“Loans applications for the household sector declined, mainly due to slowing growth in the purchase of residential property,” said OSK Research.

Loans approval growth slowed due to weaker growth in the business sector with loans approvals for the purchase of fixed assets other than land and buildings being the major drag while loans approvals for the household sector moderated, it added.

Meanwhile, ECM Libra said competition in the mortgage market had resulted in widening negative spread over the base lending rate (BLR).

“This is likely the cause for the fall in average lending rate (ALR) to 4.99% despite average BLR remaining unchanged at 6.27%. Interest margin is under pressure as the ALR-3 month fixed deposit spread has fallen to 2.25%, the lowest level in 12 years,” it added.

However, momentum in merger and acquisition activities is expected to be sustained, which would underpin non-interest income growth. CIMB Group Holdings Bhd would be the main beneficiary, said ECM Libra.

By The Star

Singapore home prices rise but pace slows

SINGAPORE: Home prices in Singapore rose to record highs in the fourth quarter but the pace of increase declined, government data showed yesterday, suggesting authorities may hold off introducing new measures to cool the housing market.

The Urban Redevelopment Authority's flash estimate showed private home prices rose 2.7 per cent in the last three months of 2010 compared with the preceding period, down from an increase of 2.9 per cent in the third quarter.

"The pace of growth has slowed for the fifth consecutive quarter... This should give comfort that the recent government property cooling measures, as well as the ramped-up state land supply, have worked to some extent to contain price growth," said Tay Huey Ing, director of research and advisory at Colliers in Singapore.

Tan predicts private home prices in Singapore will rise by around 10 per cent this year, down from the 17.6 per cent increase in 2010, as low interest rates will continue to drive demand for residential property.

A separate index by the Housing Development Board indicated prices of government-built apartments that were sold gained 2.4 percent in the fourth quarter after rising 4 per cent in the preceding period.

Meanwhile, the Ministry of Trade and Industry said Singapore's economy grew 12.5 per cent in the fourth quarter of 2010, a record year in which the city state was Asia's strongest economic performer,

Singapore grew 14.7 per cent for the year as a whole, the figures confirmed, bounding back from a 1.3 per cent contraction in 2009.

Last year's growth was Singapore's best ever economic performance, surpassing the previous record of 13.8 per cent set in 1970 and within the government's projected range of 13-15 per cent.

By Business Times

Quote of the Day 26th January

Today's quote of the day :)

"The road to success is dotted with many tempting parking places."

CapitaMalls buys Queensbay Mall

CapitaMalls Asia Ltd is buying Queensbay Mall in Penang for about RM658 million.

The acquisition will be made through CapitaMalls Asia's subsidiaries and an asset-backed securitisation structure.



CapitaMalls Asia will buy about 90.7 per cent of the mall's retail strata area and all its car park spaces, the company said in a statement yesterday.

Queensbay Mall is Penang's largest mall located at Bayan Lepas along the southeastern shorefront of Penang island and about 20 minutes' drive from Penang International Airport.

It is a family-lifestyle mall located at the heart of a 29.57ha prime waterfront integrated development which comprises a hotel, a wide range of residential homes and planned office towers.

It is easily accessible from the north of the island via the Jelutong Expressway and from the south via the Bayan Lepas Expressway.

This will be CapitaMalls Asia's second mall in Penang and fourth in Malaysia.

The other three malls - Gurney Plaza in Penang, an interest in Sungei Wang Plaza in Kuala Lumpur and The Mines in Selangor - are owned through CapitaMalls Asia's stake in CapitaMalls Malaysia Trust.

"Gurney Plaza, which we already own through CapitaMalls Malaysia Trust, and Queensbay Mall are the two best malls in Penang.

"The acquisition of Queensbay Mall, the largest shopping mall in Penang, will substantially strengthen CapitaMalls Asia's market leadership in the state.

"This acquisition signals our ongoing commitment to invest in Malaysia's retail sector for the long-term, following our listing of CapitaMalls Malaysia Trust in July this year," CapitaMalls Asia chief executive officer Lim Beng Chee said in the statement.

By Business Times

Tax on property rentals

[Mike: Hmmm...this is something new]

If you own a property that you rent out, you should know that besides the prospect for ongoing income and capital appreciation, such investments offer deductions which can reduce the income tax on your profits.

However, what type of property investor are you? If you have been actively looking for housing properties to purchase and selling them at a profit, you may not be a passive investor. It is likely that you could be regarded as a property dealer or trader.

The profits derived by a property trader are taxed as income from a business whereas that derived by passive investor is treated as a capital gain and will be subject to a 5% real property gains tax if the property was held for less that five years. If held longer, there will be no tax.

The law to determine whether you are a property trader is imprecise and the outcome can depend on a subjective evaluation of the relevant facts.

For example, does it mean that if you have sold a property within a two-year period, you will be a property dealer? Not necessarily, since it depends on your intention when you acquired that property and the reason why you sold it.

The sale of a second property will reduce the strength of a claim that you are not a property dealer but again, there may be reasons to enable you to argue otherwise.

Rent received in advance

The money that you receive for rent is generally considered taxable in the year you receive it, even when it is not due or earned. You should therefore include advance payments of rent as income even though they are not due.

Tenant-paid expenses

Expenses paid by your tenant are considered income to you. This would include, say, an emergency repair to an air conditioner while you are out of town. You can then deduct the repair payment as a rental expense.

Trade for services

Your tenant might offer his services in exchange for rent. You must include as income a fair market value of his services.

For example, if your tenant, an accountant, agrees to help you prepare your accounts in exchange for two months rent, you must include the two months rent as income even though you did not actually receive the money.

Security deposits

Such deposits are not taxable on you when you receive them if the intent is to refund the money to the tenant at the end of the lease. If the tenant breaches his lease terms, then you are entitled to use the deposit to make good any defects in the property and return the balance to the tenant.

You must include the amount used to repair the defect as income and at the same time claim the amount spent as a deductible expense.

Repairs and improvements

Owners of rental properties should not assume that anything done on the property is a tax-deductible expense. The tax law looks at it quite differently.

A repair keeps your rental property in good condition and is therefore deductible in the year you incur the expense.

Improvements, on the other hand, will add value to your property and the costs are not deductible. Improvements could include a new patio, a garage or a new roof.

From a tax standpoint, you should carry out repairs as the need arises rather than wait until the problem becomes such as to require extensive renovations where elements of improvements would invariably be present. If you bought a dilapidated property and immediately incurred repair expenses on it, these “initial” repairs are not deductible, being of a capital nature.

Mortgage and other expenses

Expenses incurred to obtain a mortgage are not deductible. These could be appraisal fees, commissions or legal fees.

When you start making your mortgage payments, the amounts paid relating to your rental property will only be deductible to the extent of the interest portion. This would be ascertainable from the annual statement, which your bank will send you.

You will also be able to deduct the cost of insurance on the rental property as well as assessments and quit rent.

Rental as a business

The Inland Revenue Board (IRB), in its public ruling, states that “Where in conjunction with the letting of a property, a person also provides ancillary or support services/facilities, the letting can be considered a business source of income …” The consequence is that you are entitled to claim “capital allowances” on any plant and machinery used in the business of letting.

These could include air conditioners, refrigerators as well as furniture and fittings. Should the tax-deductible expenses in any one year exceed the rental income, then the excess being a business loss can be carried forward.

Keep good records

The IRB can be reasonable (based on the law) in deciding on the items you can deduct but you need to show them that you have adequate records of the expenses. Always be prepared to back up your claims.

Kang Beng Hoe is an executive director of Taxand Malaysia Sdn Bhd, a member of the Taxand organisation of independent tax firms worldwide. The views expressed do not necessarily represent those of the firm. Readers should seek specific professional advice before acting on the views.

By The Star (by Kang Beng Hoe)

Penang to become 'preferred regional hub'

Mike: [Woohoo!! This i like to see!]:

The Federal Government is to make Penang the preferred hub in the region, Prime Minister Datuk Seri Najib Tun Razak said Monday.

He said several development strategies designed to stimulate the state's economy and provide jobs were driving the federal government towards that goal.

The development in Penang would result in encouraging economic growth in the national interest, he said at the ground-breaking for an extension project at the Bayan Lepas International Airport here. Penang Chief Minister Lim Guan Eng was present at the ceremony.

Najib said 10 infrastructure projects had been identified for implementation, and they included the expansion of the airport, Penang Port and the Penang Bridge, construction of the second bridge and the creation of a multimedia super corridor in the state.

"These initiatives will not only facilitate economic activities but also support our nation's objective to increase tourism revenue from the RM53 billion in 2009 to RM168 billion by 2020," he said.

Najib said Penang had many unique advantages which positioned the state well to become a hub for the northern corridor and the growth triangle comprising Indonesia, Malaysia and Thailand.

"For example, Penang already offers the highest economic density and the shortest distance to market for a city in the growth triangle," he said.

The total development of the airport expansion project, targeted to be completed by 2012, costs RM250 million, which is provided for under the RM60-billion fiscal stimulus package announced by the federal government last year.

Najib said the project was yet another federal government initiative to enhance facilities and services as Penang was a catalyst for growth of the tourism industry.

From the commercial perspective, airports enjoyed a competitive advantage and a captive market and, today, the modern airport offered much more than just a place to catch a flight, he said.

He said that following the example of successful airline hubs around the world, Malaysia envisioned its airports as a platform to drive commercial business.

In today's interconnected world, the abilities to offer high quality reliable air travel services and facilities served as a catalyst to attract trade and investment into any country, he said, adding that this directly supported employment and wealth generation which in turn would help Malaysia's drive to become a high-income nation.

Najib said the Penang international airport had seen encouraging traffic growth, receiving more than 3.4 million passengers this year up to September, up by 30.5 per cent from the corresponding period last year.

"As such, I am sure the expansion of the airport will enable Penang to achieve greater economic growth," he said.

By Bernama

Penang property a goldmine

Property in Penang will continue to remain a favourite choice among investors as it is expected to show returns that are above the national average.

Henry Butcher Malaysia (Penang) Sdn Bhd director Dr Jason Teoh said property investment was generally perceived to have a longer term horizon as it was not so volatile compared to stocks.

He said investing in property had proven to be a good hedge against inflation because the returns ge-nerated were higher than the Con-sumer Price Index.

“In fact, seasoned real estate in-vestors from Hong Kong and Singa-pore have predicted that real value will increase over the next few years.

“Among the reasons is Malaysia’s recent positioning in the top 10 list of the world’s most competitive countries,” he said in a statement in conjunction with the official launch of the lifestyle suites, 118@Island Plaza, at level seven of Island Plaza, Penang, this weekend.

The public is invited to the sales gallery to view the show unit between 10am and 6pm on Satur-day and Sunday.

Response to the initial sales preview had been overwhelming with 50% of the 106 suites sold prior to the official launch.

Henry Butcher Malaysia (Penang) is the sole and exclusive marketing consultant for the contemporary suites owned by Omega Moments Sdn Bhd.

Teoh said foreign real estate investors had complimented Pe-nang’s progress in offering some of the most attractive product designs, but at prices which were only a fraction of those in their home countries.

“Penang’s real estate market can now be benchmarked against some of the best schemes in Kuala Lumpur and Singapore,” he said.

He added that Penang, being voted among the eighth most liveable cities in Asia, on par with KL and Bangkok by ECA International, had created further excitement, especially among foreigners seeking a second home.

118@Island Plaza is the first alteration and amendment development of its kind, which when completed, will offer much demanded housing and office units for professionals and expatriates.

Each unit, ranging from 500 sq ft to 1,160 sq ft, is thoughtfully conceptualised and designed as part of Island Plaza’s remodelling programme to bring in greater vi- brancy.

For enquiries, contact Henry Butcher Malaysia (Penang) Sdn Bhd at 04-2298999.

By The Star

Bubble fears as Taipei property prices hit record

When 35-year-old Yu Chang-che made a record-breaking offer on an apartment on the fifth floor of The Palace, a gated community in downtown Taipei, he set off a wave of complaints across Taiwan.Yu, the son of a well-known property investor, agreed to pay 280 million Taiwan dollars (nine million US) for the 450-square-metre (4,800-square-foot) unit, a historic high that raised eyebrows around the island.

"Many people wouldn't be able to buy so much as the bathroom in such a luxury home even if they spent their entire life savings," said Lai Shyh-bao, a legislator of the ruling Kuomintang party.The deal ended up on the front pages of major newspapers and became a hot topic on the 24-hour news channels as fears mounted it would set off new cycles of speculation.

In the end, Yu backed out of the transaction.In the wake of the global financial crisis, Taiwan's property market has soared, sparking fears that prices will spiral out of the reach of the average buyer -- and generate a damaging property bubble.At the end of October, the average price of property in Taipei city was 4,614 US dollars per square metre, according to data from property agency Taiwan Realty.This is up 15 percent from a year earlier, and makes Taipei the fifth-most expensive Asian city, behind Hong Kong, Tokyo, Singapore and Seoul, and ahead of Shanghai and Beijing, according to the agency.

"No one expected an upturn such as this," said Chen Yu-cheng, a broker at National Realty, another Taipei-based property agency.Analysts say the rally has been spurred by low interest rates amid ample liquidity worldwide aimed at rescuing struggling economies.Adding fuel to the fire is a government decision to slash inheritance tax, prompting an inflow of idle money that had stayed abroad, said Chang Sheng-hung of Mega International Investment Services.Finally, the property market has been helped by a significant reduction in tension with Beijing after the China-friendly politician Ma Ying-jeou was elected president in 2008.

Tallies released by the government in August indicate that the house price-to-income ratio -- the ratio of the median market home price to the median annual household income -- hit 11.5, up from 9.9 at the end of 2008.In other words, even if an average Taiwan family spends nothing on food or clothes or anything else, it will still take more than a decade for them to be able to buy a home.

Skyrocketing housing prices have emerged as a key public complaint, and the central bank has raised interest rates twice while tightening credit for housing loans this year, but so far to little effect."The bubbles have been there for a while and are getting bigger and bigger," said Chang Chin-er, a specialist in land economics at National Chengchi University in Taipei.Unlike the academics, land developers say the present prices remain at reasonable levels, arguing that the risk of a sharp correction is low -- at least within the next year.

"If you take the price-to-income ratio into consideration, Taipei's realty prices still fall within reasonable levels," said Frank Chung, the chairman of Huaku Development Co.Chung remains bullish, citing the continued US attempts at quantitative easing measures which have been further driving up liquidity heading for emerging markets, including Taiwan.

Still, the private think-tank Taiwan Institute of Economic Research strikes a cautious note, saying short-term speculative trading, seen as one indicator of bubbles, has made up more than 20 percent of total transactions."The risk of bubbles bursting may be even more pronounced next year if the government takes no fresh measures to rein in prices," said Liu Pei-chen, a researcher at the think tank.

Also setting off alarm bells at the think tank is the fact that the total amount of the island's outstanding housing loans now account for more than 40 percent the island's gross domestic product, she said.Chengchi University's Chang estimated Taipei's property prices are already 43 percent higher than they should be, given average incomes and the current demand for rented homes."The bigger the bubbles, the greater damage they may wreak to the economy once they burst," he said.

By AFP

EPF: RM1.9b invested in property sector

The amount invested in the property sector constituted 0.44 per cent of the EPF's total investment of RM420 billion.

The Employees Provident Fund (EPF) has invested RM1.89 billion in the property sector which in return contributed RM67.29 million to its revenue in the third quarter of this year.



Chairman Tan Sri Samsudin Osman said the amount invested in the property sector constituted 0.44 per cent of the EPF's total investment of RM420 billion.

"As a pension fund which aims at providing a comfortable life for retirees, EPF's investments were made through a due diligent process to benefit the contributors in the long run," he said at the opening of the EPF Kuantan building in Bandar Indera Mahkota, Kuantan, yesterday.

Sultan Ahmad Shah of Pahang officially opened the RM12.8 million building which was completed in March 2006. Present was the Tengku Mahkota of Pahang Tengku Abdullah Sultan Ahmad Shah.

Samsudin said the EPF had also invested in other sectors and subscribed to the government's securities, bonds and equities and each decision was made after a thorough study to minimise risk.

The approach has allowed the EPF to give competitive dividends every year, which was the main objective for the establishment of the retirement fund.

As for Pahang, he said there were 168,000 active contributors in the state with a total savings of RM5.27 billion. Some 94,388 of them are in Kuantan with their savings totalling RM3.08 billion. Samsudin said there were 9,194 employers in Kuantan who contributed about RM42 million monthly to the EPF.

By The Star

Starproperty.my d2.TV online portal brings new dimension to property hunt

PETALING JAYA: Need information on decor and design, or on the dos and don’ts on improving your dream home?

Look no further than StarProperty.my’s new online portal d2.TV featuring celebrities, real estate experts and rising stars of the realty and property market.

A first in Malaysia, d2.TV will take viewers through heaps of information and entertaining topics about the property and home decor lifestyle.

Celebrities like Xandria Ooi, Yuri Wong, Eric Leong and Jojo Struys will introduce viewers to beautifully designed homes and properties.

Videos will be uploaded weekly with each episode lasting not more than 10 minutes, said head of StarProperty.my Martin Chow.

“Viewers can choose episodes from the series in which they are interested in and watch them as they please,” Chow said during the launch of the portal by Star Publications (M) Bhd group managing director and chief executive officer Datin Linda Ngiam at Cartrade, The Curve yesterday.

Chow said d2.TV is aimed at working adults looking for a fun and informative way to learn about buying and selling properties and quality interior design.

“It brings a fresh twist to searching for property and learning about interior design.”

Chow added d2.TV was also aimed at grooming up-and-coming realty millionaires. Ngiam said the portal had taken property search engines to a “whole new level”.

“When we launched StarProperty.my a year ago, we promised the portal will be more than a search engine,” Ngiam said.

“This is a testament to The Star’s passion and commitment to providing great content.

“And this is just the beginning.”

By The Star

RM1bil investment in Langkawi resort

Khazanah in joint-venture deal under master development plan

LANGKAWI: Khazanah Nasional Bhd, the investment holdings arm of the Government, expects to invest RM1bil with its partners between now and 2014 to develop Teluk Datai in Langkawi.


Peremba (M) Sdn Bhd director of development John Ballantyne (right) briefing Datuk Seri Najib Tun Razak during a tour of the Teluk Datai Resorts development. Accompanying them are Tan Sri Azman Mokhtar (left) and Peremba executive chairman Tan Sri Razali Rahman (second left).

Managing director Tan Sri Azman Mokhtar said the development would be done through Teluk Datai master development plan and Khazanah would get involved via its investee company Teluk Datai Resorts Sdn Bhd.

Under this master plan, we will re-invest in the existing hotels in Teluk Datai and investment in select pieces of earmarked land in an environmentally sensitive manner, he said yesterday at the launch of the master plan.

The plan was launched by the Prime Minister Datuk Seri Najib Tun Razak

In July, the group acquired 70% stake in Teluk Datai Resorts, which owns The Datai Langkawi hotel, The Golf Club, Datai Bay and 1,494 acres at Teluk Datai.

The remaining 30% interest in Teluk Datai Resorts are held by Tan Sri Razali Rahman and Datuk Hassan Abas through Archipelago Hotels (East) Sdn Bhd.

Azman said Khazanah's investment in Teluk Datai Resorts was in line with the Government's efforts to drive the economy upwards under the Economic Transformation Plan.

It is also consistent with the key thrust of the New Economic Model of moving Malaysia towards a high income economy, supported by high-skilled local labour force and sustainable products and services and embodies the spirit of collaboration and partnership between the public and private sector, he said.

The first of the projects under the plan was to enhance The Datai Langkawi hotel through the development of 14 luxury villas, expected to be completed in the first quarter 2012.

Teluk Datai Resorts had also commenced reviewing the realignment of The Golf Club, Datai Bay to upgrade the golf course and also enable the land to be optimised for beachfront development, targeted for completion in the third quarter of 2012.

At the event yesterday, Teluk Datai Resorts also signed a head of agreement with Shangri-La Hotels (M) Bhd for the establishment of a joint-venture company (51% would be owned by Teluk Datai Resorts) to develop a 5-star resort there that would later be managed by Shangri-La Int Hotel Management Ltd under the Shangri-La brand.

It was expected that there would be another premium 6-star hotel and a selection of premium villas for sale in Teluk Datai.

To preserve the environment during the development, Teluk Datai Resorts has engaged Camco South East Asia to undertake a sustainability study.

It also announced that the group had adopted Sekolah Kebangsaan Ewa as part of its corporate social responsibility initiatives.

By The Star

Mergers spice up the property sector

The property sector has not witnessed more invigorating times than that seen in recent weeks, with the spate of mergers that promises to build large companies with huge market value and even larger land banks.

Starting the siren of mergers in the sector were UEM Land Bhd and Sunrise Bhd, to be followed by Malaysian Resources Corp Bhd and IJM Land Bhd, and Sunrise City Bhd and Sunway Holdings Bhd. The latter two were announced just over the week.

These will result in the creation of three property companies with over US$1bil in market capitalisation each.

In fact, the merged entities of UEM Land-Sunrise (RM9.8bil) and IJM Land-MRCB (RM7.2bil) will have higher capitalisations then property bellwhether SP Setia Bhd (RM5.2bil).

Why the deluge of M&A activities in the sector? Analysts attribute it to a combination of reasons.

In the cases of Sunrise-UEM Land and MRCB-IJM Land, it is hoped that through these mergers, the government-linked companies (GLCs) can move forward to stamp their mark as regional champions.

What better way is there then to merge with companies which have strong branding, sound delivery and impressive track record? asks an observer.


A Light Rail Transit train passes a construction site in Kuala Lumpur. Potential takeover targets are companies with large land bank in KL. — AFP

Another reason for the current consolidation could be players trying to get a bigger slice of land redevelopment projects created by the proposed mass rapid transit (MRT) system.

CIMB research head Terence Wong says the mergers between the GLCs and private companies show that there is a significant push for execution and performance.

From my conversations with property developers over the last two weeks, I have the impression that there is now a greater urgency for M&As. The formation of two large companies from the mergers of UEM Land-Sunrise and IJM Land-MRCB would pose a threat to other smaller companies in that the former will have more resources and liquidity, says Wong.


Terence Wong ... ‘The formation of large companies would post a threat to other smaller companies.’

Another benefit for these entities which on a stand-alone basis were not too appealing to foreign investors given their size (or lack of it), would post-merger have the economies of scale to draw these investors' attention, says Prudential Fund Management Bhd fund manager Lee Hwa Seng.

The bigger size of these companies will make them more investable to foreign investors. These companies will now be able to compete with their regional counterparts, he says.

Indeed, as MIDF-Amanah CEO Scott Lim says, Malaysian corporates are entering an interesting phase in the market. For the first time, GLCs are actively looking for expertise from the private sector to ready themselves for the next phase of development.

In Malaysia, all major land banks are government-owned. The reason why private sector companies such as Sunrise and IJM Land are roped in, is because they have the branding and expertise. Hence, what you're seeing now is not just the making of bigger companies, but stronger ones, says Lim.

Lee concurs: If a property company has a good track record but is a small player, it may not be good enough as the company does not have the balance sheet to acquire landbank. On the other hand, what the GLCs may lack in expertise or branding, they make up in landbank and government funds. So the public-private partnership is a formula that should work.

Buy land vs companies

HwangDBS Research analyst Yee Mei Hui makes an interesting point. She says it makes sense for GLCs to buy over property companies rather than land as valuations of these companies are still relatively attractive, whereas land prices have appreciated significantly.

Driving home this point is the fact that property counters are trading at an average of 35% discount to their net asset value (NAV). In fact, most of them are also trading at a discount to their net tangible asset.

Almost all property companies that merge can break up their assets and unlock more value out of their existing land bank, says Wong.

Also over the week, YTL Corp Bhd announced a revamp of its property operations under a proposal to inject all its property development assets and projects into YTL Land & Development Bhd. Yee expects the deal to transform YTL Land from an urban renewal developer in Sentul and Sg Besi to a prime city centre developer in Kuala Lumpur and Singapore.

(YTL Corp has proposed to inject its wholly-owned YTL Westwood Properties Pte Ltd, which owns a parcel of development land at Orchard Boulevard, Singapore and its 70%-owned Lakefront Pte Ltd which owns 13 pieces of land at Sentosa Cove Singapore into YTL Land.)

In Kuala Lumpur, YTL Land owns land in the Kuala Lumpur City Centre, Jalan Bukit Bintang, Jalan U-Thant and Brickfields, which is next to KL Sentral.

So, who's next?

There is expectation that the spate of recent proposed mergers will unleash another slew of merger activities among other industry players to avoid being left behind in the race to be bigger and better. Potential targets, says an analyst, could be those with large prime land bank in Kuala Lumpur with shareholders that hold concentrated stakes. Those who fit these descriptions include Sime Darby Bhd, SP Setia Bhd and other property companies owned by Permodalan Nasional Bhd (PNB).

Lim expect the M&A phase to accelerate over the next few months.

Presently, PNB is the major shareholder of SP Setia with a 32.9% stake. PNB also owns unlisted property assets I&P Bhd, Petaling Garden Bhd and Pelangi Bhd as well as Sime Darby Property Bhd via its 52% stake in Sime Darby. PNB also has a 22% stake in Mah Sing Bhd.

Currently, Sime Darby has one of the largest landbanks in the country. Its subsidiary Sime Darby Property Bhd owns 3,653 ha of development properties in Selangor and Kuala Lumpur. It also has 5,022 ha of development properties in Australia and China.

A merger between Sime Properties and SP Setia will see an even bigger creation than what we've seen so far, says Lim.

As activity heats up in the sector, the guessing game on who will buy who, no doubt, is set to continue.

By The Star

A leisure place for Kelantanese

An artist’s impression of QueensPark SportzCity & Boulevard project in Kelantan.

KRISTANA Holdings Sdn Bhd, the property arm of logistics company Metroport Group Bhd, is investing RM30mil to build its maiden property project, the QueensPark SportzCity & Boulevard lifestyle and recreational centre in Kota Baru, Kelantan.

Meeting Kristana group managing director Datuk Dr Stanley Chew, one is tempted to ask the obvious why Kelantan?

The state is no doubt popular for its rich traditional culture and heritage. However, more often than not, it's Kelantan's conservative enforcement rules towards entertainment that's more renowned.

Still, Chew is confident about the prospects of the company's QueensPark SportzCity & Boulevard project, insisting that it would be the first of its kind in Kota Baru.

Our concept is different from the conventional shopping complexes and hypermarts in Kota Baru. Apart from (just) shopping, we will also offer recreational facilities and al fresco dining to potential customers, he tells StarBizWeek. The project is slated for completion next month and will be officially launched in April 2011. The QueensPark SportzCity is a commercial sports and recreational centre that will boast the largest bowling outlet (with 36 lanes), snooker and pool centre, four futsal courts (including one FIFA-sized court) and a musical roller-skating rink (also a first in the state's capital).


Datuk Dr Stanley Chew ... ‘Our concept is different.’

Chew says apart from commercial reasons, having multiple bowling alleys and futsal courts means the centre would also be able to host international sports events some day.

He adds that space within QueensPark SportzCity would only be rented out (rather than sold) as the company wants to maintain control over the activities that are offered at the centre.

We already have interested bowling operators that want to start business at our centre, says Chew.

Getting the tenants

Meanwhile, the QueensPark Boulevard comprises 32 units of two and three storeys of shopping space. These shops will comprise food and beverage outlets, convenient stores, health and beauty, information technology, crafts centres and banking services.

We will start offering the stores to potential tenants this month, says Chew, adding that the shops would be priced at around RM220 psf.

He also says selection of the tenants would be selective, adding that Kristana would also have a say on who the tenants wanted to sub-let their premises to.

We want to have a certain level of control over what we offer at QueensPark Boulevard, says Chew.

He says 70% of the tenant mix would comprise local businesses.

People that come to Kelantan want to enjoy and experience the local culture and food. The remaining 30% of the tenants will offer foreign products. This is to offer variety to our customers.

Chew says the centre was developed on the build-then-sell concept so that potential tenants would have the assurance that the building is already up and ready.

When they purchase the premises, they would be able to rent it out and start earning rental yields immediately. The project is also strategically located within prime land. As there is already a park and crafts centre nearby, there's an available crowd to attract.

Chew says the centre would also be able to leverage on Kelantan's unique weekend' which falls on Friday and Saturday.

Kelantanese observe Saturday and Sunday as their weekend. This means that the state's weekend is actually three days long instead of just two. A longer weekend means more time for the crowds to come in and shop.

The location

The QueensPark SportzCity & Boulevard is strategically located opposite the Taman Perbandaran Tengku Anis recreational park and close to a crafts centre, says Chew.

Because of the location of our centre, we can attract a wide range of customers. Rather than just attract shoppers, the area will pull in crowds that want to enjoy a walk in the park. Those that appreciate cultural arts can go to the crafts centre.

After that, they could shop or enjoy a meal at our centre. Alternatively, they could play a game of futsal, go roller-skating or bowl.

Chew says with the project's strategic location, the aim is to position the centre as a hub for sports, lifestyle and entertainment activities.

According to Chew, the QueensPark name was inspired by the Tengku Anis recreational park (Tengku Anis being the former queen of Kelantan).

He says the development was influenced by international public parks, such as Hyde Park and Central Park in London and New York respectively.

Hyde Park and Central Park are popularly sought-after addresses and we wanted to emulate that by having a complex by a famous park in Kota Baru, says Chew.

Pulling the crowd

Apart from attracting customers from within Kelantan, Chew hopes the centre would also be able to pull in crowds from neighbouring countries, especially Thailand.

A lot of people from the south of Thailand actually come to hypermarts in Malaysia to purchase certain goods because they are cheaper here (in Malaysia).

The QueensPark SportzCity & Boulevard is located about 45 minutes away from the Thai border and we hope to target potential customers from there, he says.

Chew says that many of the existing entertainment outlets in Kelantan were already packed and feels that customers and patrons are eagerly looking for a new place to unwind.

Emulating the trend

One of the reasons Kristana decided to build its project in Kelantan rather than the Klang Valley is because there were already plenty of sports and recreational outlets in Kuala Lumpur or Selangor.

The challenge of building such a centre in the Klang Valley is that there would be too many competitors, says Chew. However, he adds that the company is looking to set up similar centres in other locations.

We are looking for similar type of locations, meaning that we want to set up a lifestyle and recreational centre near an available park. This means that we'd probably develop it at the fringe or outskirts of the city rather than in the heart of the city itself. We're looking at replicating this model within the Klang Valley and perhaps Ipoh, Chew says.

He adds that the long-term goal is to develop a similar project within the South-East Asian region.

If we go regional, than 30% of the tenant mix will comprise Malaysian businesses, Chew says.

By The Star

Property buyers can benefit from M&As

Property buyers can hopefully look forward to wider choices, more innovative and quality property products to choose from if the spate of mergers and acquisitions (M&As) involving property companies translate into integration of skills, resources and innovation among industry players.

With more Malaysians turning to property investment these days, it will be welcomed by property buyers if these M&As promote the coming together and fusion of talents and capabilities among industry peers to bring to the market more well-planned and quality projects.

I believe one of the main factors for the sudden urge for developers to want to become part of a bigger entity is the fact that the Federal Government is opening up a number of its prized land bank around Kuala Lumpur and the Klang Valley for redevelopment.

Among the government-owned prime land in Kuala Lumpur and other parts of the Klang Valley are the 50 acres at Jalan Cochrane; 20-30 acres in Ampang Hilir (near KL city centre); and the 3,300 acres of Rubber Research Institute land in Sungai Buloh. Others comprise smaller parcels in Jalan Stonor, Brickfields, and Bukit Ledang (off Jalan Duta).

Notwithstanding the intense competition for the rights to develop these government-owned land, it is important to ensure optimum benefits for the people and country by upholding the utmost transparency through open tenders in the award of the land for development.

For both the public and industry players, the redevelopment of these land offers a huge opportunity to turn around and inject more vibrancy into the city's property landscape. Most importantly, all the attributes should be in place for Kuala Lumpur to be accepted into the list as one of the most livable metropolis in the world.

Kuala Lumpur and the Greater Klang Valley can certainly do with an efficient and well integrated public transportation system; a clean, green and safe environment; and a lively cultural and performing arts scene which are among the missing links in the city today.

The project planning should not be motivated just by profits, but should be demand-driven, and add value to the living, working and leisure environment.

It is imperative that a thorough and in-depth market study be conducted when drawing up the master plan for the redevelopment programme. In the planning and execution of these projects, input from the public, community groups and industry players should be sought and be given due consideration.

There is certainly a shortage of affordable landed housing (priced between RM200,000 and RM300,000) in the Klang Valley today and ensuring more such projects in the new development plans will be a timely gesture to ease the burden of the common folks.

If the implementation of the enlarged Kuala Lumpur master plan is done with best practices and attention to details, the people will be able to enjoy a more holistic and vibrant city. It will also be a boon to property values given the higher value perception bestowed on a Kuala Lumpur address.

With such massive development opportunities opening up, it is no wonder there is this sudden expansion frenzy among industry players.

Since UEM Land Holdings Bhd stated its intention to take over Sunrise Bhd earlier this month, two other mergers involving MRCB and IJM Land, and Sunway Holdings Bhd and Sunway City Bhd have been announced.

The first two mergers involve government-linked entities with private developers while the third involve two sister companies in the Sunway stable. It marks the creation of Malaysian property giants that have the heft and ambition to go regional, if not global.

The merger will boost their land bank, product offerings and expertise to enhance their market position.

With the growing competition, industry players see the need to strengthen their market capitalisation, land bank, geographical presence and expertise.

The marriages of these companies will allow the involved partners to leverage on each other's strengths and ensure better utilisation of resources. They will also create a bigger vehicle with a stronger balance sheet and market capitalisation to undertake bigger projects.

With their enlarged capacities and capabilities, there are better chances of winning bids for larger projects. Of course, all eyes are on the redevelopment of the massive Rubber Research Institute land in Sungai Buloh.

Besides flexing their muscles locally, developers are also seeing the need to venture offshore as the home market, while still robust, has a limit to its growth potential.

Globalisation is taking on a new vigour and there are opportunities for local developers to spread their wings to become international players.

Having a good brand and stronger financial backing and expertise are some of the prerequisites to carve a niche in the international market place.

While there are merits to being big, let's not forget that many conglomerates have failed after they grew too big and clumsy. Most of the time, these gigantic organisations lost track of their business forte and started to diversify into too many non-related activities. So it is important for them to keep level headed and not become arrogant and lose their footing in the process.

Despite the frenzy to go BIG, there is certainly room for the smaller and medium-sized developers which are appreciated for their quality projects, timely delivery and good after-sales service.

Deputy news editor Angie Ng believes industry players who uphold the basic tenet of appreciating and engaging with their customers will survive the good and bad times.

By The Star (by Angie Ng)

RM8bil spill-over effects from RM2.7bil Penang Sentral

A general view of the Penang Sentral project’s first phase

GEORGE TOWN: The RM2.7bil Penang Sentral project in Butterworth is expected to generate economic spill-over effects of about RM8bil when the entire project is completed 10 years from now.

Malaysian Resources Corp Bhd (MRCB) executive director Datuk Ahmad Zaki Zahid said at a press conference that work on the first phase, comprising an integrated transportation hub with a retail component, would start next month.

The first phase, estimated to have a gross development value of at least RM400mil, is scheduled for completion by Dec 2013.

Work on the second phase is expected to start even before the completion of the first phase, he said. Work on the third and final phase is expected to start five years from now.

The second and third phases are commercial components, comprising a commercial hub, including office towers, serviced apartments, a hotel and waterfront amenities, scheduled for completion 10 years from now.

Zaki spoke after the Land Public Transport Commission chairman Tan Sri Syed Hamid Albar launched the Rapid Penang I Planner logo.

In May this year, MRCB Utama Sdn Bhd project manager (project/property) Zamri Mat Zain had said that the first phase would miss the July 2011 completion deadline due to delays in land acquisition.

Zaki said construction of the first phase was likely to generate some 2,500 jobs. By the time the entire project is completed, some 15,000 jobs would be created, generating an economic spillover effect of about RM8bil, he said.

Ahmad Zaki added that the gross development value of RM2.7bil was a conservative figure, which was likely to increase next year.

The Penang Sentral project, developed by MRCB in partnership with Pelaburan Hartanah Bumiputera Bhd, is part of the Northern Corridor Economic Region initiative.

The two companies formed a joint-venture firm, called Penang Sentral Sdn Bhd, which would undertake the development of the transport and commercial hub.

MRCB Selborn Corp Sdn Bhd, a subsidiary of MRCB, has been appointed to manage the development, design, construction, completion and maintenance of Penang Sentral.

The transport hub is expected to cater to approximately 65 million passengers a year.

Meanwhile, LPTC chief executive officer Mohd Nur Ismal Kamal said that the commission would next month start to finalise the public transport policy for the country.

It will take nine months to finalise the policy, as the LPTC needs to assess the data collected from all over the country on the needs for public transportation in different towns and cities, he said.

We will then know what kind of public transport programme is needed for which towns and cities in the country, he said.

By The Star

'Landed property prices to rise further'

Property prices will continue with the uptrend despite speculation of a bubble building up in the property market, said SP Setia Deputy President and Chief Operating Officer, Datuk Voon Tin Yow.

"The market is still very strong. In terms of the uptrend in landed property prices, it is just a matter of catching up, with the higher income individuals are receiving, and other factors related to society," he added, after speaking as a panelist at the launch of the Bursa Malaysia Business Sustainability Programme today.

He added the uptrend seen is due to the supply shortage in landed properties and is an adjustment, rather than a bubble.

"If we analyse the price of a RM1 million landed property, it would be very expensive. But if we analysed in terms of built-up area, it would be worth the price.

"Of course, the uptrend, cannot go on for the next 10 years at this rate," he quipped.

He added the increase in prices are mostly in landed properties, but not strata title developments.

"The trend will continue for sometime but in the foreseeable future, there would not be any bubble forming in the property market," Voon said.

By Bernama

Developers unfazed by new ruling

KUALA LUMPUR: Most developers participating at the Star Property Fair 2010 are unfazed with the lower loan-to-value ratio imposed by Bank Negara early this month on buyers taking up a third loan on a new house as they believe the new ruling would not significantly impact their bottomline.

The decision to impose the new ruling is to cool down the property market and to curb speculations.

Effective from Nov 3, house buyers who have signed up for two mortgages and intend to apply for a third loan will only be eligible to get up to 70% financing of the value of the house.

The Haven Sdn Bhd personal assistant of principal Yeo Kong Meng said: As a medium to high-end developer, we have not found this new ruling to have impacted our sales so far.

We also don't think this cap on home financing will have a severe impact on our bottomline going forward.

He said many home buyers were already placing at least 20% deposit to book the company's properties, prior to the new ruling.

Yeoh also said 60% to 70% of the company's customers were housebuyers, while 30% bought property for investment. Many of our house buyers have high disposable incomes; paying a higher deposit for their new property is not an issue.

Event manager K.Kalai said the company's main property project The Haven in Ipoh would comprise of three-condo towers built next to a natural lake and had a total gross development value (GDV) of RM230mil.

Tower A is almost fully taken up and is priced at RM338 per sq ft. The price range of a unit starts from RM331,500 onwards, he said, adding that all three towers would be fully built by 2013.

Penang-based Ivory Properties Group Bhd project director Murly Manokaran said property sales had not been impacted at all by the new ruling.

We actually welcome the new ruling, he said, adding that it would ensure that banks had housebuyers who were less likely to default on their loan payments.

Sime Darby Property executive (property division) Rizal Affendy Abdul Latif concurred with the other developers that the new ruling had not impacted sales.

We have so far not experience a slow down in sales due to a higher deposit on a third house. Most housebuyers with an investment intention are prepared for a higher deposit, Rizal Affendy said, adding that Sime Darby's strong reputation on delivering quality homes might have helped ensure sales remained strong.

We are targeting sales of about RM50mil for this fair but it will include following up with enquiries after the fair, he said, adding that the bulk of the house buyers were likely to be first or second-time home buyers.

Plenitude Heights Sdn Bhd executive (sales and marketing) Kevin Ho also concurred that the new ruling should not significantly impact the company's sales.

The uptake of Plenitude Heights properties so far has been satisfactory despite the new ruling, he said.

Rimbunan Raya Sdn Bhd senior manager Moses Ooi Chong Seng said the company was a niche and high-end developer.

Our current project The Enclave, in Perak, is a gated exclusive boutique residential development comprising of 45 bungalows, of which there are only eight units left for sale with price tags ranging from RM1.5mil to RM3mil, Moses said, adding that sales were good despite the new ruling.

By The Star