Andaman targets RM1bil, planning 3,000 Soho units in Johor Baru

Tiew with a model of one of his projects in Perak.

PETALING JAYA: Andaman Property Management Sdn Bhd is eyeing property sales of at least RM1bil next year, according to managing director Datuk Seri Dr Vincent Tiew.
“We hope to achieve the sales from our projects with various launches lined up in every quarter. The market is picking up but it is only for selected products and market segments.
“The products are important to ensure sales are generated,” Tiew told StarBiz yesterday.
“Even though the base lending rate has increased which means an increase in the cost of funds, we see that people are still buying properties,” Tiew said.
Apart from the headline sales figures that it is targeting, the company is also more concerned about the conversion into actual sales from these figures.
“It is not only about being able to sell but also whether we can convert them into actual sales, after the loan procedures are approved.

“The successful industry conversion rate is only around 60%, based on what I know,” he said.
“This means that for every 10 units sold, four buyers would not be able to secure loans. So we will have to find four new buyers,” Tiew added.
The second half of the year had seen Andaman launching its Evo Soho Suites in Bandar Baru Bangi which had secured more than 90% sales and about 75% of the buyers have secured loans to-date.
“We launched this project in the third quarter of the year. And the total gross development value is about RM230mil for the Evo Soho alone.
“We are very happy with the results and the response of the buyers – and it is a good sign for developers that we are ready to go full swing,” Tiew said.
Andaman will launch its Upper East at Tiger Lane in Ipoh, Perak, in the fourth quarter of 2014 with a gross development value (GDV) of RM330mil for 529 units.
In the first quarter of 2015, the company is planning to launch more than 3,000 Soho units in Johor Baru with a GDV of about RM600mil.
The second quarter of 2015 will see Andaman launching the RM600mil Soho units at Ampang, Selangor.


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Signature inks land deal

PETALING JAYA: Signature International Bhd’s wholly owned subsidiary Signature Realty Sdn Bhd has entered into a conditional sale and purchase agreement (SPA) for the proposed acquisition of five parcels of land for about RM50.78mil.

The SPA was with Lembaga Tabung Haji and THP Enstek Development Sdn Bhd. The five parcels, measuring 38.86 acres, are located in Negri Sembilan.

The land is meant for a new manufacturing facility that is intended to be larger and more comprehensive than Signature’s existing facility.


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Zelan receives payment

PETALING JAYA: Zelan Bhd has received 121.63 million dirhams (RM104.97mil) from Meena Holdings LLC, owner of Meena Plaza mixed-use development project in Abu Dhabi, United Arab Emirates.

In a filing with Bursa Malaysia, Zelan said the payment made on Monday was in with the terms and conditions of the second supplementary agreement (SSA). It said it would continue with the Meena Plaza project on October 1 and required 15 months to complete it, as provided under the SSA.

In April, Zelan and Meena Holdings had entered into the SSA to resolve the dispute between both parties from the contract termination about two years ago on the project. 

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Live green and around nature

Kayangan Heights offers an excellent opportunity to own an exclusive bungalow that is well within the Klang Valley but away from the bustling city.

WELCOME to Kayangan Heights, a truly awe-inspiring place to set up an exquisite home. It is located away from the frenetic life of the city, yet within easy reach of modern daily necessities.
Your next home could well be surrounded by plush natural greenery and magnificent vistas of tropical forest at this upscale, gated and guarded residential enclave. Kayangan Heights is the result of meticulous planning to maximise the “green effect experience” of the tropical forest within. It is the brainchild of the developer, Amcorp Prima Realty Sdn Bhd, to preserve the best that nature has to offer. Hence, the development concept: “Inspired by the beauty of nature.”
Quality living amid awe-inspiring natural setting is the cornerstone of Kayangan Heights. The bungalows here differ strikingly from most of those that we see in the city today, which are rather cramped due to space constraints and somewhat devoid of natural flora and fauna.
There are two types of bungalows still available, Begonia Crescent and Kenanga Woods, with a minimum built-up area of 4,000sq ft. All six bedrooms have attached bathrooms.
These are completed bungalows with CF (Certificate Of Fitness) and that means you can move into your exclusive bungalow almost immediately without ado. In fact, you can see the actual units and get a first-hand feel of the awesome environment and decide which unit feels right for you and your family.
Thus, “what you see is what you get” with this “built and sell” concept without having to wait for years and paying upfront before you eventually get to move into your dream home.

With two prestigious awards – Malaysian Landscape Architecture Award (MLAA) – to its credit, Kayangan Heights embodies all that are desirable for a luxurious and tranquil living in an address of distinction. The awards bear testimony of the developer’s unrelenting efforts in developing a sustainable, eco-friendly environment.

Kayangan Heights is the epitome of quality living

Within a 25km radius, there are several major shopping malls (Ikano Power Centre, Ikea, 1 Utama, The Curve, Sunway Pyramid, Empire Subang, Summit Subang) and modern amenities (golf clubs, hospitals, schools, colleges, universities, restaurants, cafes, workshops, petrol stations).
Here is where ancient trees and gentle streams form a picture-perfect backdrop of the 166.74ha of tropical rainforest within the residential confines.
Exclusive residential neighbourhoods, the world over, are usually located in the suburbs where there is less or no congestion. It is perhaps a compulsion of mankind to live as close as possible to a natural and healthy environment, away from all pollution. Kayangan Heights is the epitome of quality living, complete with a parkland, playground, gym, tennis court and natural lake amongst other facilities and amenities.
Residents of Kayangan Heights and their registered guests can enjoy the facilities at the dedicated clubhouse that is located within walking distance from the bungalows. Accessible via several major highways (North Klang Valley Expressway, Guthrie Corridor Expressway, Federal Highway) and with the proposed DASH expressway in the pipeline, Kayangan Heights is merely 25 minutes cruising speed away from the heart of Kuala Lumpur.
Do drop by for an exclusive tour of Kayangan Heights and view the completed bungalows of your choice. The site sales office is open daily from 10am to 5pm, including Sundays.


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High-end ‘micro-flats’ latest trend for Hong Kong home buyers

AT a glitzy show stall for a new residential development in Hong Kong, property agents with loudspeakers are promoting the latest trend in the overcrowded city — high-end “micro-flats” which still come with an eye-watering price tag. Hong Kong’s poorest residents are used to making their homes in cramped accommodation, but now developers are touting minuscule upmarket apartments to reel in young middle-class buyers. Although they are part of swish modern complexes, some of the newly-built studio flats measure as little as 177 sq feet and are on sale for HK$1.5 million (RM620,938). Single entrepreneur Mike Ko is typical of the buyers developers are targeting: aspiring homeowners who are priced out of the overheated Hong Kong housing market. Ko currently lives with his parents in public housing and has been saving to buy, but says that current price tags mean he can only afford tiny properties. Agents are selling the pint-sized flats on the basis that the market boom will only continue. “You want to buy now because prices will just go up,” said one agent at the new Mont Vert development in the suburban neighbourhood of Tai Po. “You are saving, in a sense.” Mont Vert boasts a clubhouse, sea views and surrounding greenery — but at 172 sq ft, its smallest units are only three times larger than cells in Hong Kong’s most populous prison. The main space doubles as both bedroom and living room, with a kitchen and bathroom tucked away. Developer Cheung Kong says 10% of the 1,000 apartments on offer are studios, but could not confirm how many of those had been sold. The development is not yet completed, and — despite being a massive investment for potential buyers — there were no show flats, models, or pictures of the interiors of the studio units immediately available. While some prospective buyers are desperate enough to snap up the tiny flats, there are those who are outraged by the conditions Hong Kong residents are having to bear. “They are not only small, it is repressive. You are paying that much to be living there, it’s ridiculous,” Kenneth Tong, a spokesman for local NGO “No Flat Slaves” told AFP. The organisation believes the government is to blame for a lack of affordable homes and being slow to build more public rental housing. There is a “surging need” for cheaper homes in the city, vice-chairman of Hong Kong’s pro-democracy Labour Party Fernando Cheung told AFP. “As a result, you see these very small flats that I think could be described as inhumane if you compare [them] ... with units that would be used to house refugees, or even earthquake victims, in other places,” Cheung said. With many larger and pricier flats bought by wealthy mainland Chinese buyers, the smaller homes are targeted at young professionals, university graduates and newly married couples, among others, who are seeking to live independently from their parents and are looking for more reasonable prices, he said. “It’s really mind-boggling to see how the private residential market in Hong Kong has developed to such an extent,” Cheung said. The overcrowded southern Chinese city suffers from a serious housing shortage, with property prices doubling since 2009. Half of the apartments in a quiet neighbourhood to the east of Hong Kong Island measure less than 300 sq ft and are priced around HK$5 million. But developers say they will attract single “yuppies” and young families. “A lot of people who have studied overseas and return love this kind of lifestyle,” said David Fong, managing director of the new Le Riviera tower project, private developer Hip Shing Hong. “In London, even in metropolitan New York, the flat size is both small and old. We are small but beautiful.” he said. “It’s a compromise. Everyone would love to live in much bigger flats if they could afford it,” he said. But campaigner Tong says the demand for tiny apartments is “twisted”, a product of the city’s entrenched desire for home ownership. — AFP This article first appeared in The Edge Financial Daily, on August 11, 2014.   For more information on Building and Construction seminars, please visit www.asiapacificevents.com

 

Luxury hotels do fine despite fewer tourists

SINGAPORE: The hotel industry is experiencing some softness this year, in line with the sluggish growth in tourist arrivals, but luxury hotels are bucking the trend and pulling off strong growth, according to the Business Times. A slump in visitor arrivals from Singapore’s second-biggest source market, China, is dragging down overall tourist numbers while increased competition from new hotels is contributing to a challenging environment for the hotel industry. — Reuters This article first appeared in The Edge Financial Daily, on August 12, 2014.   For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Tropicana records higher second-quarter net profit but revenue dips

KUALA LUMPUR: Property developer Tropicana Corp Bhd saw its second quarter ended June 30, 2014 net profit come in 133.4% higher at RM89.6 million, but revenue dipped 1.73% to RM355.88 million.

In a note to Bursa Malaysia yesterday, the group attributed the higher profit to gains of RM69.9 million arising from the disposals of investment properties and a subsidiary of a jointly controlled entity (JCE).

As for the six-month period ended June 30 (1HFY14), Tropicana registered a net profit of RM97.28 million, an increase of 18.44% from RM82.14 million in the corresponding period last year, while revenue declined 1.85% to RM655 million from RM667.38 million.

Tropicana said in a press statement yesterday that ongoing development projects, such as Tropicana Gardens and Tropicana Metropark in the Klang Valley as well as Tropicana Danga Bay in Iskandar Malaysia in Johor, contributed to development profits in 1HFY14.

The group also achieved sales of RM935 million in 1HFY14, while unbilled sales stood at RM2.7 billion.

“At present, the property market in Malaysia is more subdued as a result of various cooling measures introduced by the government in the 2014 Budget.”

It said the group is preparing to launch new phases consisting of terrace houses in Tropicana Heights, Kajang, and the third serviced apartment block in Tropicana Gardens, which is a mixed residential development located in Kota Damansara.

The property player intends to focus more on development activities within the central region, where it has more than 1,000 acres (404.7ha) of development land, with a potential gross development value (GDV) of RM24.5 billion. It includes the 863-acre Tropicana Aman in Canal City, which has been earmarked for an integrated township with a potential GDV of RM13 billion for which the maiden launch is expected by the end of this year.

Based on its ongoing projects, the group expects to deliver a satisfactory performance in 2014.

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IOI Properties 4Q profit at RM413.05m, declares 8 sen dividend

KUALA LUMPUR: IOI Properties Group Bhd reported a net profit of RM413.05 million, or 12.75 sen per share, boosted by a fair value gain of RM305.3 million on investment properties for the fourth quarter ended June 30, 2014 (4Q14). Revenue came in at RM417.17 million in the quarter. For the full year ended June 30, 2014 (FY14), IOI Prop achieved a net profit of RM913.4 million on RM1.45 billion revenue. The group declared an interim single-tier dividend of 8 sen per share in respect of the financial year ended June 30, 2014. Excluding the fair value gain on investment properties and one off gain from the acquisition of subsidiaries of RM198 million, full year operating profit came in at RM596.86 million. In a filing with Bursa Malaysia yesterday, the group noted that its property development segment, which contributed 85% to group revenue at RM1.24 billion, reported an operating profit of RM494 million. “The main contributors include our development projects in the Klang Valley and Johor. In addition, our development project in Xiamen (China), has also contributed positively to the group’s results,” it said. Its property investment segment recorded revenue of RM104.9 million and operating profit of RM66.6 million, contributing 7% to group revenue and 11% to group operating profit respectively. The main contributors in this segment include IOI Mall and IOI Boulevard in Puchong, Selangor, and One & Two IOI Square and IOI Resort in Putrajaya. Meanwhile, its leisure and hospitality segment, with main contributors such as Putrajaya Marriott Hotel and Palm Garden Hotel in IOI Resort, reported a revenue of RM58.3 million with an operating profit of RM4.4 million. Its ‘other operations’ segments, which consists mainly of cultivation of plantation produce and property maintenance services, recorded a revenue of RM47.8 million, with an operating profit of RM31.9 million. On prospects, IOI Prop said the various regulatory measures to curb speculation introduced in Malaysia, Singapore and China, “are not expected to affect the sustainable growth of the property sector over the long term”. But it thinks the property market in Malaysia and Singapore will remain challenging in the shorter term as the property market sentiment has softened with a slowdown of investment decision. It expects the current market sentiment to continue over the first half of the new financial year. “Nonetheless with an unbilled sales of approximately RM1.5 billion and higher recurring income from newly-completed investment properties, the overall group’s performance is expected to be satisfactory,” it said. IOI Prop was listed on Jan 15 this year with a reference price of RM2.51 per share. It closed 2 sen down at RM2.38 yesterday. This article first appeared in The Edge Financial Daily, on August 26, 2014. For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Rapid Synergy buys into Shangri-La Malaysia

KUALA LUMPUR: Rapid Synergy Bhd has bought 2.04 million shares in hotel chain Shangri-La Hotels (M) Bhd for RM14.65 million cash.
In a filing with Bursa Malaysia yesterday, Rapid Synergy said the investment represents a 0.46% stake in Shangri-La, based on the group’s total share capital of 440 million shares.
“The investment is made in the ordinary course of business and is consistent with Rapid Synergy’s long-term intention of deploying capital into suitable quoted investment opportunities that could enhance shareholder value in the long term,” it said.
The investment was funded via internally-generated funds.
“As the investment is cash funded, there is no impact on the issued share capital or shareholdings of substantial shareholders of Rapid Synergy,” said the group in its filing.
The precision toolmaker has been accumulating the shares in Shangri-La since July 30.
Rapid Synergy’s major shareholder and non-executive, non-independent director Datuk Dr Yu Kuan Chon holds a 2.84% stake in Shangri-La. Dr Yu holds a direct stake of 20.99% in Rapid Synergy and an indirect stake of 8.61%.
The Edge weekly in its latest edition reported market watchers as saying that Rapid Synergy could be turned into a potential real estate play due to the property assets it already holds.
Rapid Synergy ended four sen higher yesterday to reach its one-year high of RM6.03, bringing its market capitalisation to RM527.1 million. Since July 8 this year, the stock has gained 20.8%.
Meanwhile, Shangri-La’s counter closed two sen up at RM7.10 with a market cap of RM3.1 billion.
For the second quarter ended June 30, Shangri-La posted a net profit of 17.5 million, on revenue of RM120.7 million.

This article first appeared in The Edge Financial Daily, on August 27, 2014.


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REITs offer various options

Ong said there are various sectors in which one can invest in REITs.

KUALA LUMPUR: The Real Estate and Housing Developers’ Association (Rehda) organised a seminar on real estate investment trusts (REITs) at Wisma Rehda on Aug 25. The seminar was held to educate participants on the various REITs available and what a REIT investor should look out for.

“The seminar is designed to elaborate on the various types, timeline and structuring methods of owning a REIT,” said chief executive officer of Sunway REIT Management, Datuk Jeffrey Ng.

“What people need to understand is that investing in a company that handles REIT is different from investing in [a] company itself,” said Ong Eu Jin, a partner with Lee Hishammuddin Allen & Gledhill Ong advocates and solicitors.

Ong said there are various sectors in which one can invest in REITs.

“For example in Australia, Arena REIT invests in childcare centres and is the first to do so. Then you have Boustead that does plantation, and Farmland partners which dabble in farmland. The Link REIT in Hong Kong invests hugely in parking lots,” said Ong.

He said in Malaysia to date, several ideas are being discussed by relevant parties on what are the REIT investment options. Islamic REITs were also discussed.

“There are companies that have converted from conventional REITs to Islamic REITs,” said Ong. “[By doing so], you can tap into [the whole] market and not just a certain sector. There is also a list of what constitutes permissible and non-permissible conditions which one can download from the Securities Commission Malaysia website,” he added.

The seminar also covered stamp duty and real property gains tax for M-REITs, business trusts, stapled REITs, and the types of initial public offerings allowed on Bursa Malaysia.


This article first appeared in The Edge Financial Daily, on August 29, 2014.


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US prime cities record stronger price growth in the first half of the year

KUALA LUMPUR: Prime residential prices in 32 cities rose 6.2% on average led by luxury homes in prime cities of the United States in the first half of 2014, putting Asia-Pacific and Europe at the bottom of the list, said Knight Frank Research’s international residential consultant Kate Everett-Allen in the Prime Global Cities Index report published this month. Everett-Allen noted that of the 32 prime residential markets tracked by the index, 27 recorded positive annual price growth in the year up to June 2014, up from 21 cities a year ago. “New York, Los Angeles, Miami and San Francisco all recorded double-digit annual price growth in the 12 months to June, placing them in the top 10 rankings,” she said. Everett-Allen noted that New York recorded growth at 18.4%, Los Angeles at 17.8%, Miami at 17.2% and San Francisco at 12.5% on a year-on-year (y-o-y) basis. Despite US prime cities being in the top 10, Jakarta and Dublin recorded the strongest y-o-y growth in the list with 27.3% and 23.5% respectively. “However, in both cases the rate of growth has slowed in the second quarter. In Dublin’s case, the rate of growth slowed from 5.6% in the first quarter to 2.1% in the second,” said Everett-Allen. “However, given Ireland’s improving economic landscape and the expiry of Ireland’s capital gains tax incentive at the end of 2014, we expect prime prices will continue their upward trajectory in the second half of the year.” While Jakarta took the first place for the most price growth globally, Beijing is at sixth place at 13.2%, Sydney at 10.9%, Bangkok at 6.4% while Bengaluru, Shanghai and Kuala Lumpur at 5.5%, 4.8% and 3.1% respectively. Dubai’s prime prices rose 6.3%, putting it at 13th place in the list. Its mortgage cap and the doubling of transfer fees at end-2013 contributed to the rise. “This has affected buyer activity more than forecast as new research by Knight Frank revealed around 25% of purchases are mortgage financed in the Emirates,” said Everett-Allen. This article first appeared in The Edge Financial Daily, on August 29, 2014. For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Paramount’s US$2.5b IPO largest REIT offer

NEW YORK: Paramount Group Inc, a US office landlord, filed for an initial public offering (IPO) that is poised to be the largest ever for a real estate investment trust (REIT). The New York-based company plans to raise more than US$2.5 billion (RM7.8 billion) in the stock sale, according to people familiar with the matter who asked not to be identified because the information is private. A filing by the company yesterday didn’t give a price range or number of shares to be sold. Paramount last month filed a confidential registration statement with the Securities and Exchange Commission. The company, which plans to qualify as a REIT, owns or has stakes in 12 office buildings in New York, Washington and San Francisco. Office rents in the two coastal cities are growing faster than in many other parts of the country as the economy grows and technology companies expand. The largest IPO of a US REIT was a US$1.4 billion offering by Douglas Emmett Inc in 2006, according to data compiled by Bloomberg. There have been only three initial stock sales via REITs this year, down from 19 in 2013, according to the National Association of Real Estate Investment Trusts. Paramount’s properties, which include San Francisco’s One Market Plaza and New York’s 712 Fifth Ave, were 90.7% leased to 253 tenants as of June 30, according to the filing. Its New York buildings accounted for 76% of its annualised rent. “San Francisco is the best, strongest office market in the country at the moment,” said Robert Gadsden, portfolio manager at Alpine Woods Capital Investors LLC in Purchase, New York. “New York is showing signs of slow, grind-it-out improvement.” Yesterday’s filing included a placeholder of US$100 million, an amount used to calculate registration fees that will change when the company sets the price range and number of shares it will sell, closer to the IPO. Jason Chudoba, a spokesman for Paramount, declined to comment on the offering. Effective rents, the amount paid after landlord discounts, may climb 6.1% next year in San Francisco and 5% in New York, compared with 3.8% growth in the US, according to a Reis Inc forecast. — Bloomberg This article first appeared in The Edge Financial Daily, on August 29, 2014.

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Mah Sing plans RM9.3b project on 88.7-acre Puchong land

A satellite image of the land Mah Sing has proposed to acquire in Puchong. It is located in one of the biggest catchment areas in Puchong.

 

 

 

 

 

KUALA LUMPUR: Mah Sing Group Bhd’s mixed development slated for the Puchong land that it proposed to acquire yesterday will increase the group’s gross development value (GDV) and unbilled sales by approximately 23% to RM50 billion and bring about earnings visibility for the next eight to 10 years.

The project has an estimated GDV of RM9.3 billion. Mah Sing has proposed to acquire the 88.7-acre (35.9ha) tract in Puchong for RM656.9 million or RM170 per sq ft (psf) from Huges Development Sdn Bhd.

Mah Sing was granted a four-year deferred term on the purchase, whereby 10% of the consideration will be paid upon the signing of the agreement, with the balance 90% stretched over 48 months.

According to a filing with Bursa Malaysia yesterday, Mah Sing said its wholly-owned subsidiary Mah Sing Group Ventures Sdn Bhd had signed a memorandum of understanding (MoU) with Huges Development to purchase or form a joint venture on a nearby piece of land measuring 170.58 acres.

The MoU will last for four years. During the MoU tenure, Huges Development will negotiate first with Mah Sing Ventures for development plans on the land, “failing which, Mah Sing Ventures shall have the first right of refusal for any arrangement in respect of the subject land”.

As for the 88.7-acre land, Mah Sing said it plans to develop serviced residences, office towers, shop offices, retail lots, a retail mall and a hotel there. The development of the project, work on which is expected to begin next year, will stretch over a period of 10 years.

According to Mah Sing, the units will cater to a full range of customers and will appeal to the mass market and medium- to high-income households. For the serviced residences, prices will start from RM585,000, it said.

Based on satellite images provided in the filing, the land Mah Sing has proposed to purchase is located in the vicinity of IOI Mall, and is in one of the biggest catchment areas in Puchong.

Mah Sing said the terrain is “generally flat” with its status currently  industrial.

Mah Sing also said the land is easily accessible via several highways, adding that various modes of transport will also be available in a couple of years.

“With the proposed acquisition, the group will have earnings visibility for eight to 10 years, thus providing greater clarity to shareholders on the earnings sustainability of the group,” it said, adding that its land bank will increase to approximately 3,720 acres from approximately 3,631 acres currently.

Analysts are positive on over the purchase, given that the price is deemed reasonable for a mature market.

RHB Research Institute’s Loong Kok Wen is positive on Mah Sing’s purchase because of the demand for properties in Puchong.

“The price is reasonable and it is similar to the price that Hua Yang Bhd paid in October 2012 at RM124 per sq ft,” RHB Research property analyst Loong Kok Wen told The Edge Financial Daily.

“However, Mah Sing’s proposed purchase is situated much closer to IOI Mall than the land Hua Yang bought.”

Loong, however, said Mah Sing’s proposal to sell the property on the land at about RM650 psf seems a tad pricey, given that it will be a high-rise development.

“But based on the popularity of Mah Sing’s Lakeview Residences, I think the group will package the property in a similar fashion by providing furnishing to [make them more] appealing to buyers,” said Loong.

She said while RHB has raised its fair value on Mah Sing to RM2.71 from RM2.58 after this purchase, the research house believes that Mah Sing’s rerating hinges on the status of its proposed RM359.557 million land purchase in Rantau, Negeri Sembilan. RHB has retained its “neutral” call on Mah Sing.

Mah Sing said on Tuesday that the land in Rantau, measuring 1,051 acres, has a caveat lodged on it and that it will evaluate its options.
 

This article first appeared in The Edge Financial Daily, on August 29, 2014.

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Tan to sell 70% of Berjaya GMOC to Carnival Group

KUALA LUMPUR: Tan Sri Vincent Tan’s business units are collectively selling a 70% stake in Berjaya (China) Great Mall Co Ltd (GMOC) to Hong Kong-listed Carnival Group for a price that is yet to be negotiated.

GMOC, which has a fully paid-up capital of US$185.51 million (RM589 million), is undertaking a massive project to build the world’s largest shopping mall in the Hebei province.

In an announcement to Bursa Malaysia, Berjaya Land Bhd said its wholly-owned subsidiary Berjaya Leisure (Cayman) Ltd (BCayman) will sell 35.7% of GMOC to Carnival Group or a relevant affiliate. BCayman presently has a 51% stake in GMOC.

Meanwhile, Berjaya Times Square (Cayman) Ltd (BTS-Cayman), which currently holds a 49% stake, will also sell a 14.3% stake in GMOC. Tan holds an 80% stake in BTS-Cayman, while his son Rayvin holds the remaining 20% stake.

This confirmed a January report by The Edge, quoting sources, that Tan was looking for ways to raise cash to build the Great Mall of China, which had fallen behind schedule. The proposed methods also included finding a new investor to take up a stake in GMOC.

“The MoU (memorandum of understanding) provides for satisfactory due diligence investigation to be conducted by Carnival Group within a period of 40 days. The parties agree to negotiate in good faith to enter into a sale and purchase agreement for the proposals no later than 30 days after the expiry of the due diligence period or a later date as may be mutually agreed,” said Berjaya Land in the filing.

The company said the consideration for the share sale will be subject to negotiations between the parties with reference to, among other things, the results of the due diligence investigation and an independent valuation on GMOC to be engaged by Carnival Group at its own costs and expenses.

Listed in Hong Kong, Carnival Group and its subsidiaries and affiliates are mainly involved in theme-based leisure and consumption business, said Berjaya Land. The former develops and operates integrated large-scale tourist complex projects, which include theme parks, hotels and shopping malls.

The Great Mall of China is an ambitious plan set forth by Tan. When he announced the development of the shopping mall sometime in 2012, he said it will cover 18.5 million sq ft, which will easily dislodge the 12.5 million sq ft Dubai Mall as the world’s largest shopping mall by a comfortable margin.

The first phase of The Great Mall of China was scheduled to be completed in October last year, but as at January 2014, according to The Edge’s report, citing sources, it was only one-sixth completed. The delay was because GMOC has utilised a significant amount of its capital to build the first phase.

Phase one was intended to be financed through GMOC’s paid-up capital and the sale of retail space. However, as at April 2012, GMOC was reported to have burnt through half its paid-up capital.

Because of the delay, there has been no revenue from the sale of retail space as envisaged, which explains why Tan is looking for a fresh capital injection for the project.

The first phase is planned to offer one million sq ft of retail space, a one million sq ft pedestrian mall, an extreme park, a water park and a family park. The entire project was initially slated for completion in 2017.


This article first appeared in The Edge Financial Daily, on September 3, 2014.

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Citigroup pays record US$697m for Hong Kong tower

HONG KONG: Citigroup Inc paid a record HK$5.4 billion (US$697 million or RM2.25 billion) to a unit of Wheelock & Co for a Hong Kong office tower that will bring most of its 5,000 employees in the city under one roof. The price for the 512,000 sq ft property in the Kowloon East district is the largest ever office transaction in Hong Kong, the New York-based bank said in a statement on Tuesday. The tower, scheduled for completion by the end of 2015, will be used to house staff currently spread out across offices in the city, said Weber Lo, the bank’s chief executive officer for Hong Kong and Macau. Citigroup’s purchase may mark a return of investment demand in Hong Kong’s office market as falling vacancies and high rents pose a challenge for companies seeking large office spaces. Banks and insurers, including Agricultural Bank of China Ltd and Manulife Financial Corp, have bought buildings in the city, which is home to the highest office rents in the world after London, according to property broker Cushman & Wakefield Inc. “The lack of supply in Hong Kong has been a challenge for many large occupiers, such as Citi, who are in Hong Kong for the long term,” said Sigrid Zialcita, managing director of research for Asia-Pacific at Cushman & Wakefield in Singapore. “Hong Kong has not lost its lustre as a regional financial hub, even with competition from Singapore and Shanghai.” The overall vacancy rate in Hong Kong fell for a second consecutive quarter in the first three months this year, to 3.6%, according to CBRE Group Inc, which advised on the transaction. Office rents in Central may drop as much as 5% this year on increased demand from mainland Chinese firms and an improved economic outlook, the realtor said. Citigroup is paying about 20% more for the Kowloon tower than Manulife, which paid HK$4.5 billion last year to Wheelock for a similar-sized block at the same development, called One Bay East. The waterfront district where the two towers are located, formerly an industrial zone, is earmarked by the Hong Kong government as an alternative financial hub. “There aren’t many banks historically that have bought their real estate,” said Ben Dickinson, head of Hong Kong markets at broker Jones Lang LaSalle Inc. “Most banks in Hong Kong prefer to retain the flexibility leasehold occupation offers them. It’s going to be interesting to see if it changes the perception for occupiers in Hong Kong whether more people will look at purchase.” Hong Kong is one of the eight markets in Asia where the bank generates more than US$1 billion of revenue annually and has close to 5,000 employees, Citigroup spokesman James Griffiths said. The purchase “underlines our belief and confidence in Hong Kong’s continued growth as a leading global financial centre and hub for some of our core regional businesses,” Stephen Bird, Citigroup’s Asia-Pacific chief executive officer, said in Tuesday’s statement. — Bloomberg This article first appeared in The Edge Financial Daily, on June 19, 2014.

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PJD to acquire Melbourne land for A$145m

KUALA LUMPUR: PJ Development Holdings Bhd (PJD), through its 75%-owned subsidiary Yarra Park City Pte Ltd, has entered into a put and call option deed with an Australian developer for the purchase of a piece of freehold land measuring 2.026ha in Southbank, Melbourne for A$145 million (RM439.8 million) cash. The proposed transaction works out to RM2,013 per sq ft. In a filing with Bursa Malaysia, PJD said the land, to be purchased from developer Dynasty Falls Pte Ltd, is located in the inner urban central business district (CBD), which houses many offices of major corporations, high-rise developments and landmark buildings such as the Melbourne Convention and Exhibition Centre, and Melbourne’s tallest building — Eureka Tower. PJD said in a statement that it deems the acquisition to be ideal for long-term development with strong growth potential, given that it is one of the last pieces of sizeable prime land available for development in the Melbourne CBD. The basis of deriving the purchase price, said PJD, is on a willing buyer, willing seller basis, premised on the strategic location of the property, best estimate of the indicative market value and comparison of recently transacted prices of properties located within the vicinity. “A formal valuation is currently being carried out, details of which will be disclosed upon signing of the contract of sale of real estate,” it said, adding that the estimated time frame for completion is expected to take effect in July 2014. However, PJD didn’t say how it would fund the acquisition that seems to be a major exercise for the group. PJD had net total borrowings of RM328 million as at March 31, 2014, against shareholders’ fund of almost RM1 billion. The group reported a net profit of RM75.9 million for the nine-month period ended March 31, on revenue of RM705.5 million. Nevertheless, there has been speculation that PJD may embark on a corporate exercise to raise funds or to be merged with OSK Property Holdings Bhd to form a bigger entity. Both property development outfits are controlled by veteran investment banker Tan Sri Ong Leong Huat who holds 26.8% and 70% stakes in the companies respectively. This article first appeared in The Edge Financial Daily, on June 20, 2014.   For more information on Building and Construction seminars, please visit www.asiapacificevents.com

Good variety of offerings at property fair

Value for money: Halimah, accompanied by Star Publications group managing director/CEO Datuk Seri Wong Chun Wai (left) and Yam (second from left), visiting the Mah Sing booth after launching StarProperty Fair 2014 at Setia City Convention Centre.

SHAH ALAM: Potential house buyers are spoilt for choice with the variety of properties on display at the popular StarProperty Fair 2014.

The three-day event features the country’s top property developers and their latest projects, suitable for both first-time buyers or investors.

Mah Sing Group Bhd corporate communications general manager Lyanna Tew said the company had seven projects at the fair with a good variety of offerings to meet different market needs.

The spotlight, however, is on a mixed ­development project called Lakeville Residence in Taman Wahyu, which is currently open for registration. The project boasts a spectacular lake view, mountain view and Kuala Lumpur city view and comes partially furnished with two car parks.

Other Mah Sing projects available at the fair include four landed residential projects in Rawang and Cyberjaya as well as two high-rise projects in Mont Kiara and Jalan Ampang.

Even though it is the new kid on the block, Eco World Development Sdn Bhd does not fall behind its veteran peers as it has eight projects on display at the fair.

“We are showcasing projects from Penang, the Klang Valley and Johor,” said Yuen Chee Meng, EcoWorld’s senior manager for corporate marketing.

The fair, featuring 28 exhibitors, ends this Sunday at Setia City Convention Centre. It opens from 11am to 7pm.

Visitors stand a chance to win 50 units of Sam­sung Galaxy Tab 3 Lite as part of a lucky draw contest in partnership with CIMB Property Mart.

StarProperty Fair 2014 is organised by StarProperty.my.

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S P Setia’s bid for Bangsar land turns unconditional

KUALA LUMPUR: S P Setia Bhd said the privatisation agreement between its 50%-owned unit Setia Federal Hill Sdn Bhd (formerly Sentosa Jitra Sdn Bhd), the government and Syarikat Tanah dan Harta Sdn Bhd has become unconditional.

This brings the property developer closer to acquiring the 51.568 acres (20.86ha) of land in Jalan Bangsar here, in exchange for the development of a RM845 million integrated health and research institute, 1NIH Complex, on a 41.115-acre piece of land located in S P Setia’s Setia Alam township in Shah Alam, Selangor.

In a filing with Bursa Malaysia yesterday, S P Setia said the Health Ministry was satisfied that the conditions set out in the privatisation agreement had been fulfilled and that the effective date of the privatisation agreement had been determined to be June 17.

The agreement dates back to a 2011 proposal in which the Public Private Partnership Unit (PPPU) in the Prime Minister’s Department had granted Setia Federal Hill approval-in-principle to enter into negotiations with the PPPU and the ministry over the development of the health complex.
The government’s approval-in-principle to the proposal submitted by Setia Federal Hill was subject to the transfer of the Setia Alam land to the government and the submission to the government of a letter of offer evidencing that Setia Federal Hill has secured the project financing in respect of the 1NIH Complex.

Setia Federal Hill plans to redevelop the Bangsar land into an integrated mixed residential and commercial project and provide the government with a 20% share of the net profit from the redevelopment.

Currently, five agencies of the National Institute of Health, which the Health Ministry is responsible for, are situated on the land. They are the NIH Secretariat, the Institute of Health Management, the Institute of Public Health, the Institute of Health System Research and the Institute for Health Behavioural Research.

This article first appeared in The Edge Financial Daily, on June 20, 2014.



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Eco World buys Semenyih land for RM3.5b township

KUALA LUMPUR: Eco World Development Group Bhd plans to develop a mixed residential township with a gross development value (GDV) of RM3.5 billion in Semenyih, Selangor, following the acquisition of a 492.66-acre (199.4ha) tract there.

The project will have a focus on affordable housing.

“It will complement the group’s overall master development strategy for [its current project called] EcoMajestic,” said Eco World president and chief executive officer Datuk Chang Khim Wah in a statement yesterday.

The group yesterday announced the acquisition of the Semenyih land from Univas (Far East) Sdn Bhd for RM225.33 million or RM10.50 per sq ft, as part of its plans to increase its pipeline of projects in the Klang Valley, Iskandar Malaysia and Penang to gain market share and lock in future growth.

The latest acquisition will increase the property developer’s landbank to more than 4,000 acres from 1,326.6 acres currently.

In a filing with Bursa Malaysia yesterday, Eco World said its unit Majestic Blossom Sdn Bhd had yesterday signed a conditional sale and purchase agreement (SPA) with Univas for the proposed acquisition which is expected to be completed by the fourth quarter of this year.

The SPA is conditional upon fulfilling conditions precedent within six months, including securing the approvals of the Estate Land Board for the transfer of the land, the shareholders of Eco World at an extraordinary general meeting to be convened and any relevant authorities.

“Majestic Blossom is currently in the initial stage of planning the development and it will need to submit a detailed development plan to the relevant authorities for approval,” said Eco World.

“It is now too preliminary to ascertain the total development costs, timing of development, expected profits as well as the additional financial commitment required for the project pending submission of the development plan for approval by the authorities,” it added.

The group expects to finance the proposed acquisition via internal funds and/or bank borrowings.

The freehold tract is located between the towns of Semenyih and Broga, and is within close proximity to the 1,073-acre EcoMajestic — Eco World’s first township project in the Klang Valley.

Chang said the group was encouraged by the response to its recently launched EcoMajestic, which saw a take-up of 95% for the first phase of 612 units of 2-storey terraced houses.

“This latest acquisition will increase our landbank in Semenyih to some 1,500 acres. With two sizeable projects in this fast-growing development corridor, Eco World is well-positioned to serve a broad range of customers and we intend to come up with exciting and innovative product offerings that will appeal strongly to the mass, upgrader and luxury home market,” said Chang.

“Given the location, there is good potential for upgraders and overspill demand to be captured from older neighbouring townships such as Bandar Rinching, Bandar Tasik Kesuma and Bandar Sunway Semenyih. The burgeoning student population created by Nottingham University and the land’s proximity to the proposed Bandar Kajang MRT Station are also supportive factors which bode well for its development prospects,” he added.

To further enhance accessibility and improve connectivity between EcoMajestic and the Semenyih land, Eco World plans to upgrade the existing connecting roads from EcoMajestic to Bandar Tasik Kesuma, an established residential area, and the Semenyih land.

Shares in Eco World closed four sen or 0.76% higher at RM5.31 yesterday, with a market capitalisation of RM1.34 billion.

EXPANDING LAND BANK... Univas (Far East) Sdn Bhd director Tee Cheng Hua (third from left) exchanging documents with Eco World Development Group Bhd president and chief executive officer Datuk Chang Khim Wah after the signing of a sale and purchase agreement yesterday for the acquisition of a 492-acre tract in Semenyih, Selangor by Eco World from Univas. Looking on are  Eco World director Tan Sri Liew Kee Sin (centre), executive director Liew Tian Xiong (right), Univas representative Jane Tee (left) and director Tee Lip Sin

This article first appeared in The Edge Financial Daily, on July 3, 2014.

Princess Cove set to be Johor Baru’s latest landmark

JOHOR BARU: The sprawling Princess Cove project in Tanjung Puteri by China-based property developer R&F Properties Co Ltd is expected to become the latest landmark in Johor Baru.

The project is located opposite Singapore’s Woodlands immigration complex and next to the Johor Causeway.

“It will be a new landmark in Johor Baru, similar to what Kuala Lumpur has in the Petronas Twin Towers, and will greet those who are coming to Johor via the Causeway,” R&F Properties sales representative Joe Tan said during a tour of the project’s yet-to-be officially launched sales gallery yesterday.

Tan said the new landmark will comprise twin skyscrapers, one of which will be a Grade A office tower while the other will house a five-star hotel. He declined to divulge further details about its height.

But several local property websites quoted the height of one of the skyscrapers at over 550m.

Tan said for the first phase, which is slated for completion in 2017, the developer will build 3,000 units of luxury condominiums in 15 blocks and a three-storey shopping complex.

“We already have enquiries from customers from the United States and Britain,” he said, adding that the project, targeted for Malaysian and foreign buyers, will be completed in five phases spanning eight years.

R&F Properties, one of the largest property developers in China and listed on the Hong Kong Stock Exchange, late last year bought 47ha of seafront, prime land in Johor Baru worth RM4.5 billion in a deal involving Johor royalty.

The land was formerly the site of Tanjung Puteri’s Royal Malaysian Customs Department. On a per sq ft (psf) basis, the prime land is valued at more than RM890, making it the second most highly priced piece of land in the city, trailing closely behind another China-based property firm that bought 15ha of land in Danga Bay for RM991 psf. — Bernama


This article first appeared in The Edge Financial Daily, on July 3, 2014.

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