Setia EcoHill 2 prospective buyers line up to book units

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PETALING JAYA (June 25): As at 10.30am, 50 units of the landed homes at Setia EcoHill 2's first phase, Springfield Residences, were booked.

A crowd of about 200 prospective buyers waited at the township's sales gallery in Semenyih since 6am to book their units, with some even camping overnight, said Setia EcoHill deputy general manager Koh Sooi Meng.

"We are excited to see the good turn up. Setia EcoHill 2 offers good concept and lifestyle living, we are certainly confident of the take up of the first phase (of Setia EcoHill 2)," he told TheEdgeProperty.com.

The sales gallery opened its doors at 7am today instead of the usual 10am for buyers to get their queue numbers, which will enable them to choose their units, he said.

"The signing of the sale and purchase agreements are expected to take place next month," he said.

First in the queue was business owner Ting, who said he was here since last night.

"My wife, son and daughter and I were here since 8pm last night. We saw the (partially) completed Setia EcoHill and really like the concept, infrastructure, facilities and the environment here. We came here earlier because we can’t afford to miss this," he told TheEdgeProperty.com after he completed the bookings for two semi-dee units.

Springfield Residences comprises 258 units of 2-storey terraced homes and 96 units of 2-storey cluster semi-detached homes, priced from RM553,000 to RM668,000 and are scheduled for completion by mid-2018.

The terraced homes will come in three designs with built-ups for the units starting from 1,859 sq ft to 2,148 sq ft while the semi-dees will have built-ups of 2,028 sq ft.

This phase has a gross development value (GDV) of RM228 million and will occupy 180 acres of the 1,010-acre Setia EcoHill 2, which has a GDV of RM5 billion.

The township is connected to the Kajang-Seremban (Lekas) highway, North–South Expressway, South Klang Valley Expressway and Sistem Lingkaran Lebuhraya Kajang Highway.

Nearby amenities include hypermarkets such as Tesco and eateries such as McDonald’s, Pizza Hut and KFC. Some of the educational institutions nearby include SK Kampung Rinching, Nottingham University (Malaysian campus) and Universiti Putra Malaysia.

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What is the impact of Brexit on M’sian property investors?

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LAST night, a referendum was held to decide if the United Kingdom should stay or leave the European Union (EU), a political and economic partnership of 28 countries.

The "leave" vote won by a narrow 2% margin.. 

The pound has also slipped to its lowest since 1985. At press time, the exchange rate is RM5.50 against one pound sterling.

And now, investors — including those in Malaysia — await its far-reaching implications with bated breath.

“If Britain does exit the EU, there will be a period of rewriting of a lot of trade agreements with Britain’s respective trading partners and there may be a revision of policies in the nation. Ultimately, all sectors are intertwined, including the property market,” independent economist Lee Heng Guie told TheEdgeProperty.com.

“Nonetheless, it is important to note that those who already have property investments in Britain are mostly long-term investors so, they would just have to stomach this period of uncertainty until things are more stable,” he added.

Why was the referendum held? In 2015, British prime minister David Cameron —an advocate of the remain stance — had promised to hold this referendum should he win the election in response to growing calls from his own Conservative MPs and the UK Independence Party (UKIP). They claim that Britain has not had a say since 1975, when it voted to stay in the then-European Economic Community.

Proponents of the “stay” vote say trade among EU members is easier, and a smoother flow of immigrants – mostly job-seeking youths — through the union will boost economic growth and help pay for public services.

Sadiq Khan, the newly appointed mayor of London, concurred. “About half a million jobs in London directly depend on Europe. As a city, we export more than £12 billion [RM71 billion] a year to Europe, and London is home to the European HQ of 60% of the world’s non-European global businesses. Having access to the EU markets is crucial to the success of the City of London. This is why the prospect of Britain leaving Europe is so catastrophic,” Khan said in a statement published by The Evening Standard.

An advocate of the “leave” campaign, ex-London mayor Boris Johnson said if the Brexit is successful, the UK will be like a “prisoner escaping jail”. It will finally be able to negotiate its own free trades, he added.

What does this mean for the property market?

JLL London head of residential research Adam Challis believed that the mainstream residential market is broadly undeterred by the EU referendum, although the risks of leaving the EU are becoming a bigger concern.

“Buyers are centrally focused more on economic and job prospects, both of which are expected to experience modest negative impact should British voters wish to leave the European Union. Some purchases are now being delayed until after June 23, which could mean a busier than usual summer selling period, particularly if voters chose to remain,” Challis toldTheEdgeProperty.com.

He said international investors will balance uncertainty against potential currency arbitrage opportunities.

“London’s role as the world’s de-facto capital city will remain unchallenged and this will continue to support and draw demand for real estate,” said Challis.

Knight Frank global head of research Liam Bailey noted that the mainstream UK housing market is primarily driven by domestic dynamics and an exit from the EU will not impact the demand and supply imbalance, which is a key feature underpinning current housing market trends.

JLL’s Challis agrees. “There are downside market risks if the Brexit takes place, but there are also arguments to suggest that the UK will adjust relatively quickly to the new reality. While institutional structures will undergo quite large changes, the trading relationship with the rest of Europe will remain vital to both the UK and the rest of Europe regardless of the outcome,” he concluded.

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Eco Majestic’s Rumah Selangorku Open Day draws 500 interested buyers

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SEMENYIH (June 25): Eco Majestic’s Rumah Selangorku Open Day has attracted 500 interested buyers to its sales gallery in Semenyih today, with some of them waiting since 7am to get the front place, according to the developer Eco World Development Group Bhd (EcoWorld).

Eco Majestic general manager Evon Yap said the open day idea is a first for Eco Majestic as well as the property development industry.

“We expected about 300 people to turn up, but instead, the numbers totalled as many as 500 and the crowd started queueing as early as 7am this morning,” she said in a press statement today.

The objective of the open day is to provide a one-stop service for first-time homebuyers to cut down the waiting process for Rumah Selangorku applications, which normally takes about three months.

“Interested purchasers can submit their documents and obtain on-the-spot approval to purchase apartments under the Rumah Selangorku scheme,” she added.

Officers from government agencies including Selangor Housing and Real Property Board (LPHS), RAM Credit Information (RAMCI) and The National Higher Education Fund (PTPTN) were also present today to assist the applicants.

She noted that amongst the 500 interested buyers who submitted their applications today, 300 successful applicants have also booked a unit in Simfoni Apartments.

“The other 200 applicants who have failed today due to incomplete documents can submit their applications to us by next week and we will deliver their applications to LHPS for approval,” she added.

Simfoni Apartments comprises three blocks of 11-storey residential towers which house 870 units of freehold apartments with built-up size of 750 sq ft. The selling price is RM100,000.

Launched in September last year, Simfoni Apartments' construction has started in early this year and it is slated to be completed within three years.

Meanwhile, EcoWorld president and chief executive officer Datuk Chang Khim Wah said with this initiative, the developer hopes that the first-time experience of buying a property would be more than pleasant and a breeze.

“We are delighted to be able to do this for our interested purchasers who want to make Eco Majestic their new home. It is also an EcoWorld initiative to reach out to first-time homebuyers,” he added.

He noted that Simfoni Apartments offers affordable homes that come with with an incomparable quality of life. Residents can enjoy access to a comprehensive range of amenities that have been planned for the Eco Majestic township.

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Sunway least affected by softness in property market, says Nomura

KUALA LUMPUR: Sunway Bhd is the property company which is least impacted by the softness in the property market in Malaysia because the proportion of its earnings from property development is the lowest.

Nomura Research said this was highlighted by Sunway Bhd’s management at the Nomura Investment Forum Asia 2016 in Singapore over June 7 to 10.

“This is consistent with our expectation as we estimate the property development segment will make up 44% of Sunway Bhd’s core PBT in FY16F, compared to peers under our coverage where more than 90% of profit before tax is from property development,” it said.

It pointed out that construction and property investments (Sunway REIT and non-REIT assets) segments will offset the softness in property development earnings in FY16F.

“The manager (Sunway Bhd) is generally positive about the construction segment outlook due to the public infrastructure projects wins by Sunway Bhd’s construction arm – Sunway Construction (Neutral) – as well as the future pipeline for such projects.

“This is in line with our expectation as highlighted in our recent report on Sunway Construction (Neutral) where the orderbook replenishment win target has been raised to RM2.8bil in FY16F (from RM2bil),” it said.

Nomura said Sunway Bhd is trading at a FY16F P/E of 10.5 times and price-to-book (P/B) of 0.9 times, which is at a discount when compared to its peers’ FY16F P/E of 13.6 times.

“We value Sunway based on sum-of-parts derived realised net asset value (RNAV). We sum the values from all businesses to get the group’s RNAV and add cash from warrants and ESOS to get fully-diluted RNAV of RM12.4bil.

“To that we ascribe a 50% discount to the property development and non-REIT investment RNAV and derive our TP of RM4,” it said.

However, Nomura said downside risks are: 1) any project delays or disappointing take-up rates could dent our earnings forecasts; 2) a failure of the company to meet its sales targets or pass on cost increases to customers; 3) further weakening of Iskandar sentiment; 4) failure of Sunway Putra Mall to get tenancy targets.

It also said any contractions in GDP growth or unexpected government policy measures to curb the sentiment in the property sector are downside risks to its call.

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Sapura to bank on Lot 91 KLCC project

PETALING JAYA: Sapura Resources Bhd is banking on its latest Lot 91 KLCC project to be the key driver of the group’s earnings now that it has sold off its education business for RM246.99mil.

Its shareholders yesterday had approved the proposal to dispose of its remaining stakes in APIIT Sdn Bhd, Asia Pacific University Sdn Bhd and Asia Pacific Institute of Information Technology Lanka to Ekuinas’ Ilmu Education Group Sdn Bhd.

Managing director Datuk Shahriman Shamsuddin said Sapura Resources was focusing on its Lot 91 KLCC project and planned to rent out the building once it’s completed in 2020.

“So our profit and cashflow will be coming from that direction,” he told reporters after the group’s AGM and EGM yesterday.

Based on Sapura Resources’ latest annual report for the financial year ended Jan 31, 2015, StarBiz’s earlier report mentioned that the investment division where its education business was parked made an operating profit of RM44.26mil, making it a major contributor to the company’s overall bottom line.

Shahriman said that the group’s Lot 91 KLCC, which is a 52-storey building with about 1.2 million sq ft attached to the Kuala Lumpur Convention Centre, promises a gross development value of about RM1.5bil.

“We hope to get this ready by 2020. We shall be putting the majority of the proceeds from the disposal into this project,” Shahriman added.

Sapura Resources had earlier formed a joint venture with KLCC (Holdings) Sdn Bhd (KLCCH) to form a company called Impian Bebas Sdn Bhd to develop 82,000 sq ft located along Jalan Kia Peng, just a stone’s throw away from the popular Suria KLCC shopping mall.

The Lot 91 KLCC project includes a premier office tower, exhibition space and a retail podium.

Sapura Resources owns 50% stake in Impian Bebas while KLCCH holds the other half.

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Prasarana completes pre-qualification of LRT 3 project

“The first set of awards revolves around advanced works packages in preparing the construction sites. As of now, we have confirmed the locations of the 26 stations and have started land acquisitions,” Prasarana president and group chief executive Datuk Azmi Abdul Aziz said.

KUALA LUMPUR: Prasarana Malaysia Bhd, a state-owned urban public transport operator, has completed the pre-qualification process of the RM9bil light rail transit line three (LRT 3) project, with the final leg being the system works packages leading up to the first set of contract to be awarded in two to three months time.

Yesterday, Prasarana announced the three system work packages consisting of track works and conductor power rails, depot equipment and track maintenance vehicles and automated fare collection.

Twenty-four successful companies have pre-qualified for three LRT 3 system work packages dominated by foreign companies and their joint-venture partners such as Mitsubishi Heavy Industries Ltd and Sumitomo Heavy Industries Consortim, Alstom Transport SA, China Communication Construction Company Ltd and Gerbang Kesuma Sdn Bhd, Colas Rail System Engineering Sdn Bhd and Colas Rail SA Consortium, KUB Telekomunikasi Sdn Bhd and Samwon FA Co Ltd among others,

“The tender process is now in full swing and we want to reiterate our commitment that all parties will adhere to high standards of integrity throughout the execution of the project.

“The first set of awards revolves around advanced works packages in preparing the construction sites. As of now, we have confirmed the locations of the 26 stations and have started land acquisitions,” Prasarana president and group chief executive Datuk Azmi Abdul Aziz said yesterday.

Adding to that, the project delivery partner MRCB-GK project director Ong Gin Lip said companies who were successful would be the ones that could give the assurance of quality and timely delivery within their cost parameters without compromising high safety standards.

“We will not settle for less,” he said.

On May 4, Prasarana announced the completion of the pre-qualification stage of competitive tendering of the LRT 3 project. The first batch of pre-qualified companies for the tendering process were also announced.

A total of 22 companies have been shortlisted to bid for the large infrastructure jobs that would be awarded on a competitive basis.

Another 22 companies have been shortlisted on a restricted tender basis among majority bumiputra-owned companies. Also, eight companies have been shortlisted for the tunnelling portion, which will span 2km.

The system works have been broken up into four different categories, including the rolling stocks that are mainly dominated by international players.

Each applicant was evaluated based on its company structure, financial information, proven experience, project implementation structure, among others, in order to qualify.

The tender period commenced earlier last month, following the announcement of phase one and will end when the final award of the last scheduled tender by the second half of 2017.

The LRT 3 project starts from Bandar Utama to Johan Setia, Klang that will see the development of 37km rail lines and its stations.

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Report: SP Setia may be affected by Brexit

Exit fear: OUB Kay Hian says SP Setia’s longer-term earnings may be impacted by lower take-up rate of its Battersea Power Station project emanating from uncertainty of prolonged economic slowdown and sentiment in the event of Brexit.

PETALING JAYA: A number of Malaysian companies with investments in Britain would be affected should Brits decide to leave the European Union (EU) in a referendum on June 23, UOB Kay Hian said in a report.

The research house said property developer SP Setia Bhd, which has a big exposure to Britain due the Battersea Power Station project would likely be affected. It derived 40% of its earnings from the London project.

“Based on our sensitivity analysis, every 10% depreciation of the British pound would result in a marginal single- to mid-single digit impact on the company’s earnings.

“However, for SP Setia its longer-term earnings could be impacted by lower take-up rate of its Battersea Power Station project emanating from uncertainty of prolonged economic slowdown and sentiment in the event of Brexit,” it said.

Sime Darby Bhd, a diversified conglomerate with plantations as its main business, also has exposure to the Battersea project.

“Potential slower future take-up rate due to weaker economy and depreciation of pounds against ringgit will lead to lower translated earnings. However, we reckon the negative impact to the group would be minimal,” it said.

The research house said Genting Malaysia Bhd would be another Malaysian company affected by a British exit from the EU.

“Genting Malaysia UK operations could be affected due to a slowdown in consumer spending and hence lower visitation from home market players (but this could potentially be offset by higher foreigners’ visitations due to cheaper British pounds and lower translated ringgit profit from UK operations due to weaker pound sterling.

“UK operations made up 11% of our 2016 earnings before interest, tax, depreciation and ammortisation (Ebitda) forecast and a 10% weakness in British pounds to ringgit will have a 1.0% mild negative impact to our Ebitda forecast and 0.8% negative impact to revised net asset value.

“However, we note that there could be potential non-core translation loss from its pound-dominated assets,” it said.

It added that YTL Power International Bhd, which owns Wessex Water, would see lower ringgit-translated earnings too although the underlying asset has a natural hedge due to revenue and cost being transacted in pound sterling. “Importantly, Wessex Water’s earnings and cashflow visibility will remain high against a backdrop of OFWAT’s regulatory framework,” it said.

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‘Bandar Malaysia a top destination’

KUALA LUMPUR: Bandar Malaysia will not only be a place for businesses as there will be a social element with 5,000 affordable homes, says Datuk Seri Najib Tun Razak.

Shareholders Ministry of Finance Inc (MOF Inc) and Iskandar Waterfront Holdings and China Railway Engineering Corporation (IWH-CREC), the Prime Minister said, had committed to build the homes in the first phase of development.

“Construction of the homes will be fast-tracked as a matter of priority,” said Najib, who pointed out that it was proof of the Govern­ment’s commitment to meet the needs of all Malaysians.

Najib, who attended the signing of Bandar Malaysia’s Shareholders Agreement, said 40% of Bandar Malaysia Sdn Bhd would be owned by MOF Inc and 60% by Johor-China consortium IWH-CREC.

The Federal Government, together with the Johor government, will jointly hold 54% of the equity in the transport-oriented integrated development, with IWH holding 22% and CREC 24%.

Present at the event were CREC chairman Li Changjin and IWH executive vice-chairman Tan Sri Lim Kang Hoo.

Najib also announced incentives for the master developer and its subsidiaries. These include income exemption for 10 years, exemption from stamp duty (eight years), Real Property Gains Tax (eight years), withholding tax (eight years) and exemption from import duty on selected construction materials not manufactured locally.

In addition, the Government had agreed to consider granting tax incentives to top global companies and financial institutions, he added.

He invited international companies to “seize the moment and come to Bandar Malaysia”, which he described as an unbeatable destination for multinationals to set up their regional headquarters.

This, he said, would bring international professionals and make it attractive for qualified locals, who might otherwise decide to work abroad, to stay.

Two other Memorandums of Understanding (MOU) were signed yesterday – for the Bandar Malaysia Fund by a consortium of banks and for an intergrated Transportation Terminal.

MRCB Berhad, which is 38% owned by the Employees Provident Fund, will also be participating as a joint-venture partner in building Bandar Malaysia’s Integrated Transportation Terminal.

China Ambassador to Malaysia Dr Huang Huikang encouraged companies from his country to invest and set up their regional headquarters here.

Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong was also present, his first official function after undergoing spinal surgery early last month and a brief period of rest and recovery.

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MRCB aims big at Bandar M’sia transport terminal

KUALA LUMPUR: Construction and property firm Malaysian Resources Corp Bhd (MRCB), which has entered into a non-binding memorandum of understanding (MoU) with Wondrous Vista Development Sdn Bhd and IWH CREC Sdn Bhd to collaborate on developing an integrated transportation terminal at Bandar Malaysia, intends to do better than the flagship KL Sentral project in its future projects.

MRCB executive director Mohd Imran Mohd Salim, who spoke to StarBiz following the signing of three agreements related to the multi-billion-ringgit Bandar Malaysia project, said the company was planning to negotiate with the master developer for 60 acres – “hopefully more” – for the development of various commercial development other than just the transport terminal.

IWH CREC – a joint venture between Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corp (CREC) – owns a 60% stake in Bandar Malaysia Sdn Bhd, the master developer and owner of Bandar Malaysia, with the Finance Ministry owning the remainder stake.

MRCB, in a filing with Bursa Malaysia, said the company intended to form a strategic alliance with Wondrous Vista and IWH CREC for the purpose of acquiring, constructing, developing and operating the transportation hub.

“It could be for commercial retail, food and beverage, and hotels. What is important to remember is that MRCB is a transportation developer. We did PJ Sentral and KL Sentral,” Imran said.

He added that the Bandar Malaysia transport terminal could easily make up 35 to 40 acres in size compared to the 10-acre KL Sentral Station. Imran said the company had the capacity and willingness to take on more projects because KL Sentral only has about five acres left to be developed.

“The transport terminal at Bandar Malaysia is a very high-profile one. But we need to iron out issues like acreage, the integrated nature of the development and the density and other factors,” he said, adding that there would be more clarity on the project soon.

“We will come to a decision in six months,” Imran said. The MoU will remain valid for a period of six months or may be terminated at any time by mutual consent.

It was previously reported that 1Malaysia Development Bhd’s sale of the 60% stake in Bandar Malaysia to the IWH-CREC consortium for RM7.41bil would be completed this month.

The 486-acre Bandar Malaysia, located on the former Sungai Besi air force base, will house the Kuala Lumpur-Singapore high-speed rail terminus and become a central transport hub with connections to the mass rapid transit lines, KTM Komuter, Express Rail Link and 12 other highways.

Bandar Malaysia, vide its wholly owned subsidiary, would be the registered owner of 486 acres at Bandar Malaysia, of which 55 to 60 acres have been earmarked for the integrated transportation terminal.

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