Al Rajhi Bank buys property

KUALA LUMPUR: Al Rajhi Bank (Malaysia) is purchasing 36 units of i-City Cybercentre 1 office suites for RM95mil, marking its first property venture in the country.

The purchase accounted for 80% of the units completed in the first phase of i-City, a RM2bil township on 72 acres in Section 7, Shah Alam.

“The investment of Al Rajhi in i-City demonstrates its real value and increasing interest among Middle Eastern companies in our property market,” I-Bhd director Eu Hong Chew said after the parties signed a sale and purchase agreement yesterday.

I-Bhd is the developer of iCity.

I-Bhd director Eu Hong Chew (left) and Al Rajhi Bank (Malaysia) CEO Ahmed Rehman posing with the signed documents for the purchase of RM95m worth of office units in i-City, Shah Alam, by the Al Rajhi Bank.

The purchase is to be completed over the next two to three months.

The first phase of i-City comprises 44 units totalling 300,000 sq ft. I-Bhd will retain 20% of the units for local information and communications technology companies. – Bernama

i-City in Malaysia sold before it is built

by News Desk

I-Bhd’s i-City project in Shah Alam, will be the first commercial development in Malaysia to boast of three world class data centres following strategic partnerships with Intel, Telekom Malaysia and Universiti Industry Selangor, won an MSC status for the freehold commercial township and positioned itself as an ICT-based developer.

The data centres comprise a 3,500 sq ft hosting facility catering to small and medium enterprises and two 70,000 sq ft world-class Tier 4 purpose-built ready data centres catering to global information and communications technology companies. Al Raji bank (Malaysia) agreed on Monday to purchase 36 units of i-City Cybercentre 1 office suites for RM95mil. The purchase accounted for 80% of the units completed in the first phase of i-City.

Like Nexus Norwest, Australia’s most intelligent strata office building, i-City is about doing business in a faster, cheaper and simpler way. The difference between the two is that Nexus Norwest is a third the size of i-City’s Phase 1.

Ricky Lim, I-Bhd chief innovation officer, said with i-City’s MSC status, tenants could enjoy many benefits including super broadband with Gigabit connectivity, no import duties for multimedia equipment, 15 minutes emergency response, no restriction on recruitment of foreign workers and 10-years’ tax exemption. I-Bhd is also providing 100% power backup supply in 15 seconds. All buildings in i-City will be connected.

Lim Boon Siong, I-Bhd deputy chief executive officer, adds: “I-City is on track. We are creating a special niche by investing in technology that can add value to our property and benefit our tenants and purchasers.”

24-07-2008: SunCity: REIT listing later this year

by Lim Shie-Lynn

KUALA LUMPUR: Sunway City Bhd is evaluating various proposals for the listing of its real estate investment trust (REIT) in view of the overall bearish mood in the markets, its executive director Datuk Jeffrey Ng said.

Ng said that the property developer would continue with the listing of SunCity REIT in the second half of this year. However, he did not elaborate if the REIT listing would be delayed until market conditions improved. SunCity REIT has assets worth RM3.7billion.

Upon listing, the SunCity REIT was touted to be the largest in the country, with a property portfolio comprising three segments — retail, hotel and commercial.

Among the properties that would be injected include the Sunway Pyramid Mall which has a market value of RM1.63 billion, Carnival Shopping Mall in Penang, Monash University campus, Sunway University College and Menara Sunway.

Other properties included in the REIT would be the Sunway Resort Hotel & Spa and Pyramid Hotel.

“With the various properties involved, there would be fair bit of work to do as we recognise that the market is soft,” Ng told The Edge Financial Daily.

However, he declined to elaborate whether the company would opt to list in Singapore.

Compared with Malaysia, Singapore offers attractive incentives in REIT investments as investors are exempted from withholding tax.

According to the Singapore Exchange Ltd, foreign institutional investors and corporations are subjected to a 10% withholding tax up to February 2010. For REIT investment in Malaysia, a withholding tax of 28% is imposed on foreign institutional holders while individual investors are taxed 26%.

Analysts said the real estate investment industry in Malaysia (M-REITs) would be headed for tougher times as a result of the negative sentiment in the property sector due to rising construction costs and a decline in the housing take up rates.

JP Morgan said the growth of M-REITs was unlikely to outperform the property sector. It said the overall weak consumer and business sentiment arising from higher costs could lead to a slowdown in rental revisions.

The research firm said there was a lack of liquidity in the stocks. In a recent report, JP Morgan downgraded SunwayCity to a neutral stance as there was a possibility of the property developer delaying its REIT listing.

“Despite the strong asset base of properties to be injected into the REIT, we fear that the listing may be delayed given the lack of appetite for new equity and the recent de-rating of REITS overall,” property analyst Simone Yeoh said in the report.

JP Morgan revised the SunCity target price to RM2.16 from RM2.50 previously. It had also reduced the property developer’s earnings by 6% for FY08 and 13% for 2009 to account for softer residential property sales.

“Sunway City is evaluating proposals in the REIT structuring to make this listing successful. It is a matter of pricing and packaging the assets given the current market situation that we are in,” Ng said.

REIT growth held back by (lack of) incentives

REIT growth held back by (lack of) incentives

July 24, 2008 at 14:33 pm · Filed under Investment

This article by TonyCHGoh is extracted from The Edge online edition on 21 July 2008:

KUALA LUMPUR: Although most real estate investment trust (REIT) valuations are relatively cheap now, declining well below their current net asset value (NAV) per unit in tandem with the recent decline of the market, investors are still reluctant to invest in them due to the unattractive tax structure and incentives, analysts said.

Analysts said the lack of investor confidence in the REITS had to do more with the issue of withholding tax and lack of other incentives rather than the unattractive yields or asset quality.

At the moment, Malaysia has one of the most unfavourable tax regimes for REIT investment. A witholding tax of 28% is imposed on foreign investors, while individual distributions received by investors are taxed as high as 26%.

In comparison, Singapore’s REIT investors are exempted from withholding tax but foreign institutional investors and corporations are subjected to a 10% withholding tax. In Hong Kong, the withholding tax system no longer exists.

Based on selective counters, at the close of trading last Friday, Starhill REIT ended at 87 sen per unit (NAV: 97.2 sen), UOA at RM1.13 (NAV: RM1.39), Tower REIT at RM1.09 (NAV: RM1.45), Axis at RM1.64 (NAV: RM1.65), Quill Capita at RM1.04 (NAV: RM1.20) and Atrium REIT at 76 sen (NAV: 99 sen).

Atrium, StarHill and UOA are trading below their IPO prices. The annual yield of the six REITs averages 9.41%, representing a favourable and good return on investment (ROI), particularly amid the high inflation and slowing growth environment.

“Given the lack of new incentives and new regulations to spur the industry, we are unlikely to see any major upward movement in the unit prices of the REITs and their values will continue to be depressed in tandem with the current market condition,” an analyst said.

While REITs offered one of the highest ROI, analysts said it was not enough to lure investors to invest in small capitalised stocks.

“While the returns are basically good, if compared to the returns from the market, the current structure governing REIT investment has hardly changed since its inception in 2005 as the successor to the old property trust.

“The incentives, tax structure and rules have to be revised, hopefully in the coming budget, in order for the REIT industry in Malaysia to flourish,” an analyst said.

In terms of asset quality, the top picks among analysts are UOA REIT and Starhill REIT, while Axis REIT is the favourite in terms of management quality, as it has been one of the most aggressive in terms of acquisitions and property portfolio diversification.

UOA REIT, with properties predominantly consisting of offices and commercial buildings, provides a good benchmark in the recovery and demand of office space, especially in and around the Kuala Lumpur’s central business district (CBD).

Starhill REIT had on July 11 announced a revenue of RM108.23 million for the year ended June 30, 2008 (FYE08), an increase of 9.5% over RM98.84 million in FY07, while net income was up 11.8% to RM81.27 million from RM72.69 million.

Mayban Trustees Bhd, the trustee of Starhill REIT, undertook a revaluation exercise on Lot 10, Starhill Gallery and JW Marriot Hotel that would increase the valuation of the company’s prime properties by RM254.36 million. As at June 30, 2008, Starhill Gallery and Lot 10 had occupancy rates of 99% and 94%, respectively.

The analysts said the current depressed REIT prices did not reflect their relatively strong fundementals as an inflation-beating investment that could provide a consistent dividend stream due to the strong asset quality.

But for the sector to see some excitement among investors, there is no denying the fact that the local REIT industry needs a boost in having better incentives that are at least on par with regional peers.

Malaysian property market slowing as developers warn of soaring costs

Malaysian market slowing

Buyers in Malaysia are facing rising prices because of soaring construction costs, it is claimed.

Developers are warning that they are struggling to cope with higher costs which they are having to pass on at a time when demand is already slowing because of the global credit crunch.

Prices increases in fuel and power charges are pushing up costs by as much as a third but developers say they are hopeful interest from India, Pakistan and Russia will keep the market moving forward.

'If developers increase their prices by a third in the current climate it may be difficult to sell,' said Regroup Associates managing director Allan Soo.

Regroup's Klang Valley Housing Property Monitor, which keeps track of the secondary market, showed a slight decline even in prime areas. Compared with 2007, when foreigners bought up almost everything available, Mr Soo said this segment all but evaporated in the first quarter of 2008.

However huge price increases are not inevitable and location is the key to whether developers can ask higher prices, according to the Real Estate and Housing Developers Association (REHDA). 'Just because the cost of materials goes up does not mean the price of homes will also go up,' said chairman Ng Seing Liong.

But the outlook for the second half of this year is uncertain, he added. Local demand has waned and most developers will just have to accept lower profits, it is believed. There are concerns, however, that smaller builders without strong reserves may not survive.

Although interest from foreign buyers from traditional markets is falling the real estate industry remains confident that a surge in interest from other countries and from institutional buyers should help sustain the market.

BLand gets offers for Seychelles hotels

BERJAYA Land Bhd (BLand) has received offers to buy both its hotels in Seychelles for US$62 million (RM201 million), its resort and hotel division head Foo Toon Kee said.



They are the four-star 232-room Beau Vallon Bay Beach Resort & Casino on Mahe Island and the three-star 80-room Seychelles Berjaya Praslin Beach Resort Seychelles.

"We have been operating there for over 10 years. We might consider the sale. We are still contemplating whether to sell or redevelop the place," Foo, the acting head of Berjaya Hotels and Resorts, told Business Times in an interview.

Should Berjaya decide to sell the property, it would be in line with its future plans to focus on five-star hotels and resorts.

Berjaya has had a presence on the popular island resort for over a decade.

When asked what would be a comfortable sale number for the hotels, Foo said: "They could fetch US$70 million (RM227 million) ... but I am not saying that we will definitely sell.

Yet another property it may consider selling if the price is to its satisfaction is the three-star Berjaya Georgetown Hotel in Penang. The 323-room hotel has a book value of about RM80 million.

The hotel produces a lower profit margin than its five-star hotels. It has an earnings before interest, taxes, depreciation and amortisation margin of about 20 per cent versus 45 per cent for the five-star properties.

In the event that the hotel is not sold, Foo said, the group may consider rebranding it to better distinguish the various star categories of the hotels under Berjaya.



By New Straits Times - Business Times - (by Vasantha Ganesan)

Acacia Tower @ Park Residences, Bangsar South (New Launch - Introduction)

Acacia Tower @ Park Residences, Bangsar South (New Launch - Introduction)

Location : Bangsar South, Kerinchi
Description : Hillside condo part of large mixed development
Tenure : Leasehold
Land area : 60 acres
Launch Price : From RM629,000 to RM3,484,800(average of RM410psf)
Built-up : 1,190sf and 2,095sf
Total units : 470 (Block Acacia alone) out of 2100 units in the entire condominium development
Expected Completion : March 2011
Developer : Sunny Uptown Sdn. Bhd.(subsidiary of UOA Group)




Bangsar South is technically not part of Bangsar at all. It in fact lies right next to Kerinchi where Pantai Hillpark is, but as postcode sells, the developer has decided to associate this entire development with Bangsar instead. Bangsar South is an intergrated development consisting of 5 components altogether, rather similar to Mid Valley City just down the highway. There are The Park Residences, The Village, The Horizon, The Vertical and The Sphere. The Horizon are 2 blocks of 10 and 11 storey boutique offices, The Vertical are 10 blocks of 20 storey offices, The Village is an area where you find loads of F&B outlets, whereas The Sphere is a retail mall. The Park Residences will ultimately consist of 8 blocks of condominium towers altogether, eventually with 2100 residential units in total. First off would be Blocks Acacia and Begonia, with the first still open for sale now. At RM410 persf on average, it is very affordable compared to developments in actual Bangsar where prices have even breached RM1000 persf. However, there are still developments still within the borders of Bangsar though on the outskirts which are around RM520-570 persf still, namely Gaya Bangsar and Suasana Bangsar. If you would still prefer something with actual Bangsar address, then it would seem that Gaya and Suasana are both better options than Park Residences at Bangsar South. Of the three developments, only freehold one is Suasana Bangsar, an added edge.

For own stay, take a look at Mid Valley City further down Federal Highway. Is living in an intergrated mini city your idea of a residential abode? With the convenience comes loads of traffic congestion. You can forget the idea of seclusion or exclusivity. Everything is overly exposed when you choose areas like Mid Valley City or Bangsar South. Privacy is an issue, that's for sure. That's the price you have to pay for living within an intergrated city. If that is what you crave for, then yes, you can consider Bangsar South. There is one thing you might want to take note of, Bangsar South is located right next to some DBKL low cost flats. If that is a bother to you, then perhaps Mid Valley City might be a better option. Well, both developments are of leasehold tenure anyway, and Mid Valley City is completed after all.

For investment, capital appreciation and tenantability will mirror Mid Valley City's performance in the long run, not the whole of it, but rather a considerable fraction of it. That will take time however, as offices and retails in Bangsar South will take some time to fill up from the date of completion. So, do not expect overnight miracles the moment you receive your keys to The Park Residences. Capital appreciation at Mid Valley City was some 40% about 2-3 years after completion. Immediate capital appreciation was around 25% upon key handover. I foresee Bangsar South to appreciate some 20-25% in the long run, as Mid Valley City is generally better located than Bangsar South. Mid Valley Mega Mall was also more established when Northpoint Condominium came into the scene, whereas with Bangsar South, everything is starting from scratch. As for tenantibility, again, it will take time. Note that even when Acacia and Begonia blocks are completed in 2011, the other 6 blocks of condominium towers are not, and that will affect tenantibility to an extent. Also note that The Vertical, Horizon and Sphere will be far from completion as well. So, if you decide to invest here in Bangsar South, be prepared to wait for years before everything matures. Again, remember that with Mid Valley City, Northpoint was a built-then-sell development. When it was launched into the market, most of Mid Valley City was already shaping up, with Mid Valley Mega Mall much established already. This is not the case with Bangsar South.

KFH acquires KD20mn offices project in Malaysia

Kuwait Finance House (KFH) announced that it acquired a KD20m, 25,000 square meter, 20-storey office building in the Malaysian capital Kuala Lumpur, from Mah Sing Group in partnership with Autron Corporation that KFH possesses 80% share of the deal.

The International Real Estate Department Manager Ali Al-Ghannam stated that the real estate project called The Icon Jalan Tun Razak is rendered a fruitful investment opportunity.

Moreover, it is one of the businesses managed by KFH Asian Real Estate portfolio, which was established four years ago, and continues to achieve high returns for its investors.

Al-Ghannam stressed that the deal reveals the role that KFH plays in the East Asian region since it firmly planted its roots in Malaysia by establishing an independent bank that was capable of receiving many awards in a very short period of time that did not exceed four years.

KFH-Malaysia has sealed several prime investment deals in various fields, where it linked KFH with East Asia.

He added that the Asian markets are the platform that served as a turning point for other international markets, since it witnesses many benefits like flourished economy, prime investment environment, legislations, and encouraging laws; in addition to high growth rate witnessed by such markets.

National Real Estate Conference To Attract Over 600 High-profile Delegates

KUALA LUMPUR, July 16 (Bernama) -- The 19th National Real Estate Convention 2008(NREC 2008), from Aug.26-27, is expected to attract over 600 high-profile delegates from Malaysia and the region.

To be held at the One World Hotel in Bandar Utama, Petaling Jaya, the NREC 2008 would cater for those individuals who need to be in the inside-lane of the dynamic Malaysian real estate market.

"It will be held in a setting designed to maximise interaction and dialogue," said organising chairman, Previndran Singhe at a media briefing here today.

According to Previndran, a comprehensive and innovative professional programme had been drawn up for the NREC 2008.

"Among other things, the conference would highlight strategies for decision makers in real estate companies to deal with with the current economic situation," Previndran explained. the group chief executive officer of Zerin Properties explained.

Reputable and experienced speakers such as Ir. Ciputra,the past world president of FIABCI Indonesia and Wong Ah Long, the former chief executive officer of Suntec City Singapore will grace the NREC 2008.

Previndran, the group chief executive officer of Zerin Properties, urged all real estate industry players, including property developers, architects and bankers to attend the NREC 2008.

The registration fee for the NREC 2008 is RM599 per person, including convention materials, tea-breaks and lunch.

-- BERNAMA

Developers holding back projects amid rising costs

HE housing sector will suffer from a lack of new products as developers are holding back projects amid rising costs.

The number of projects abandoned by developers may also rise as they are not able to sustain the development cost, said the Malaysian head of Fiabci, an international real estate federation.

"While some developers are increasing selling price by 30 per cent due to higher costs, others may build smaller homes, or one third of the current size and maintain prices, to remain profitable," said Datuk Richard Fong, who is also Glomac Bhd group executive vice-chairman.

Fong was briefing the media on the upcoming 19th Real Estate Convention Conference (NREC 2008).

Besides cement price, which has gone up by 50 per cent in the last three months, and steel, which has doubled to RM4,000 per tonne, developers are burdened with more expensive copper wires, cables and transport charges.

"Some developers are taking the stand to postpone launches until prices stabilise," he added.

Fong said a slowdown in the housing sector, which encompasses 140 sub-sectors, will have a cascading effect on real estate, engineers, architects and consultants.

Banks and transport firms will also suffer unless the market improves, he said.

"The market is still sound. It's a good time to buy houses which have been launched as the next time a developer launches a new project, it will cost 30 per cent more," added Fong.

Institution of Surveyors Malaysia immediate past-president Datuk S.R. Abdullah Thalith Md Thani said new launches will slow down unless prices in the secondary real market rises, encouraging developers to launch again.

"The current scenario is an opportunity for the industry to innovate. In these challenging times, the government should revise the quota for low-cost housing and Bumiputera ownership," he said.

"The country is not facing a recession but cash flow problem," he added.

NREC 2008, which will be held at One World Hotel from August 26 to August 27, is organised by Fiabci, ISM and the Association of Valuers and Property Consultants in Private Practice, Malaysia.

It will address current industry concerns and strategies, among others.

More than 600 local and foreign delegates are due to attend the event, which will be launched by Minister of Housing and Local Government Datuk Ong Ka Chuan.

By Sharen Kaur (Business Times)

Increase in material cost

The recent increase of prices of building material are being published and discussed in many articles in the newspapers as well as online news portals. The extent of increase in price is reported to have caused more than 30% increase in cost of construction. Prices of items like steel bar and cement have increased the most and others to a lesser extent.

Some developers have announced that prices of new launch will see an increase of 25% to 30%. Let us see objectively if the proposed increase is justifiable.

The selling price of a property is computed with of the followings:-

1. Cost of construction
2. Professional fees
3. Finance charges
4. Authorities processing fees & contribution
5. Office overhead
6. Land cost
7. Profit margin

Out of the above list of cost, two items namely cost of construction and land cost constitute the major portion of the selling price.

Cost of construction forms about 40% or higher percentage of the selling price depending on the location of development. In city area where land cost is high, cost of construction constitute a smaller portion of selling price. In rural area where land cost is low, construction cost form the major part of the selling price.

Assuming if the construction cost constitute about 40% of the overall development cost, then an increase of 30% in cost of construction will only result in approximately 12% (0.4 x 30%) increase in the selling price if the developer were to maintain the profit margin in absolute dollars and cents, however if the developer would want to maintain the margin in term of percentage of the cost, then the resulting increase would be higher than 12%. In any case there would not be a corresponding increase of 30% in selling price just because the price of construction has increased by 30% as the cost construction is only a part of the overall selling price.

In fact, the price of properties in prime area has been increasing at much faster pace even before the recent huge hike in material price due to increased demand from investors hoping to sell later at higher price.

Those who have bought properties before the recent hike in material price may be pretty happy now that the price of property in good location will see good support because even if there are new launches in the same area, the price will not likely to be cheaper because the cost of construction has gone up and there are no indication at the moment that the price of material will soften.

KLCC Property Holdings positive on earnings

KUALA LUMPUR: Integrated real estate developer KLCC Property Holdings Bhd is optimistic of its earnings prospect despite challenges in the current economy.

According to group chief executive officer Hashim Wahir, its outlook remains positive, as the demand for office space in prime areas of the city centre remains strong and stable.

Kashim Wahir

A major part (46%) of the company's revenue is derived from property investment and office rental, followed by hotel property (21%), retail centre (27%) and management services (6%), he said after the company AGM yesterday.

“For the hotel operations we need to be innovative, focus more on marketing and sustain occupancy. For example, Suria KLCC is registering 99% occupancy. "

Hashim disclosed that ExxonMobil was renewing its lease agreement with KLCC Property's wholly owned subsidiary Arena Johan for Menara ExxonMobil. The management expects a 3% increase in rental revenue every three years.

“The traffic volume at the Suria KLCC currently stands at 40 million people per year. KLCC Property has yet to see any impact from the decline in domestic demand and consumer spending,” Hashim said.

Asked on KLCC Property's acquisition plans, Hashim said its hands were full with Lot C development in the KLCC precinct, which was under the substructure phase, and Lot D1, which is in the planning stage, but it did not discount the possibility in the future.

Plans for Lot D1are expected to be finalised in one to two years.

By The Star

Unesco boost for George Town

TOURISTS and Penangites have given the thumbs up to Tuesday's announcement of Georget Town obtaining the World Heritage Status from United Nations Educations, Scientific and Cultural Organisation (Unesco).

Australian tourists Kate Beckett, 30, and her boyfriend Jamie Wallis, 36, said it was important to preserve the cultural sights in Penang.

They had visited the clan jetties, E&0 Hotel, Fort Cornwallis and Goddess of Mercy temple.

Steve Teper, 59, from the United States said he found George Town a great city, adding that the announcement was just fabulous.

“George Town deserves to be listed and I enjoy visiting the heritage buildings in the city,” he said.

Australian tourist Elizabeth Ayders, 57, hoped for more heritage buildings to be retained.

“It is a pity to see some of the heritage buildings being demolished and blocks going up.

“These are the old colonial buildings that should be kept as part of history,’’ she said.

School teacher Dorothy Ramplin, 65, said some new buildings were ugly.

“I prefer the heritage buildings, especially the Cheong Fatt Tze mansion,” said the Australian tourist.

IT manager Frederic Misheletti, 35, who came from France with his family and friends said George Town was a great city which deserved to be preserved.

“Congratulations to the people of George Town,” he said.

Artist Alex Leong, 39, who loves to draw heritage buildings, said:

“I love Penang very much especially the heritage buildings, which is why I draw them so that I can still see them some day when they’re gone,” he said.

On Monday evening, Unesco accorded George Town and Malacca World Heritage Sites status when the Paris-based World Heritage Council met in Quebec, Canada.

Among the historical sites in George Town are Lebuh Acheh historical enclave, Lebuh Acheh Malay Mosque, Jalan Mesjid Kapitan Kling Mosque, Goddess of Mercy Temple, Khoo Kongsi, St George’s Church, Assumption Church, St Xavier's Institution, Convent Light Street, Little India, the museum and court building, the commercial area of Beach Street, Fort Cornwallis, Esplanade, City Hall, the clan jetties and the port areas.

By ANN TAN (The Star)

Servcorp investing RM96mil in i-City project

SYDNEY: Australia’s Servcorp Ltd, the world’s second largest serviced office operator, is investing US$30mil over five years into state-of-the-art concierge services for I-Bhd's RM2bil i-City project.

The 72-acre integrated commercial development in Section 7, Shah Alam, would be equipped with seamless wireless access, integrated information and communications technology and building networks, as well as multimedia and collaborative tools.

“This concierge services concept will make i-City the first real estate project in Asia where all the services are connected via one network,” said Servcorp chief information officer Marcus Moufarrige.

He was speaking to reporters yesterday prior to signing an agreement with I-Bhd, who was represented by deputy chief executive officer Lim Boon Siong.

The concierge services are divided into two areas – the human services element provided by Servcorp and the innovative technology element provided by i-Office2 Sdn Bhd.

i-Office2 is a joint venture with I-Bhd in which Servcorp’s subsidiary Office Squared would hold 65% equity interest.

The concierge services would also be supported by a gigaspeed fibre optics network that would allow for complete connectivity and mobility while its “last-mile fibre optics to the units” network would have a capacity of up to 10Mbps.

Additionally, the network would also have super broadband redundancy and the components for Web 2.0, a second-generation Internet development.

Servcorp has had a presence in Malaysia since 1988 when it provided office services to Menara Haw Par. The company currently extends these services to Menara Standard Chartered and Menara Citibank.

Moufarrige said businesses locating to i-City would have a choice of whether to take up the services offered by Servcorp and the joint-venture company.

“The average fee charged to our clients in Australia is about A$140 per seat per month (per Internet connection) but it really depends on what level of service the clients want,” he said.

He added that the services would be charged on a different scale in Malaysia.

When completed in 2012, i-City would comprise a shopping mall, corporate towers, corporate suites, shop offices, serviced apartments, data centres, a hotel and an innovation centre.

By FINTAN NG

Bolton eyes bigger Penang land bank

High-End Residence: Azman taking a closer look at the model of the Surin Condominium project

PROPERTY developer Bolton Bhd expects to spend RM200 million to increase the size of its land bank on Penang Island, giving a boost to its newly-launched maiden project, featuring a RM130 million condominium development, in the island-state.

Bolton said it is satisfied with its initial investment in Penang and is on the lookout for additional land bank for acquisition as well as opportunities to jointly develop with landowners to bring Bolton's brand and property products to the state.

"We are currently evaluating acquisition opportunities in Penang and have seen three or four proposals," its executive chairman Datuk Azman Yahaya told reporters at the launch of the "Surin" luxury condominium project in Tanjung Bungah yesterday.

"We feel Penang would be ideally suited to serve as a hub for our planned growth in the northern region, thus our commitment of another RM200 million investment," he added.

Azman said with the RM200 million, Bolton is looking at developing residential properties with a gross development value ranging between RM600 million and RM800 million.

He said the projects in Penang will comprise high-end landed properties in gated communities as well as high-rise developments.

"We hope to complete our acquisition during this financial year," he said, adding that one of the parcels of land being eyed is in George Town.

Azman also said that Bolton has no intention of slowing down, rather "in higher-end developments where margins are high, we will be able to absorb the increase in building materials cost".

With a development value of RM200 million, the Surin project sits on 1.4ha of land and offers 390 luxury condominium units tagged from RM364,988 to RM1.2 million per unit.

The project is scheduled for completion by 2011.

Bolton's executive director Chan Wong Kwong said 65 per cent of the 198 units in the first tower have been sold prior to the official launch.

"About 30 per cent of these buyers are foreigners from Hong Kong and Singapore," Chan said.

By New Straits Times (by Marina Emmanuel)

Fewer project launches in Penang

GEORGE TOWN: There will be fewer property projects launched this year in Penang due to the rising cost of fuel and building materials.

“This is reflected in the new launches lined up for exhibition at the upcoming Malaysian Property Exhibition (MAPEX) 2008 scheduled to be held on the island from July 11 to July 13.

There are only three new launches this year for MAPEX 2008, with a gross sales value (GSV) of RM44.5mil, compared to seven last year, which had a GSV of RM300mil,” Real Estate Housing & Developers' Association (Rehda) Penang chairman Datuk Jerry Chan said at a press conference.

The three launches would see 207 housing units launched on the island and mainland.

Chan said the majority of the units launched would be priced below RM250,000 a unit but the new houses were 30% more costlier than those available in the market.

There were currently 6,571 units of houses being constructed on the island and mainland with an estimated GSV of RM1.7bil, added Chan.

Chan said in view of soaring energy and building prices, there would be no new developments of low cost and low medium cost houses, which were currently priced at RM42,000 and RM75,000 respectively.

“We are appealing to the state government to revise these prices. Otherwise developers would resort to building only expensive homes comprising less than 150 units per scheme, which does not require them to build affordable housing,'' he said.

“We are also appealing to the state government to allow developers to have higher density and larger built-up areas for projects in the city.”

Chan said Malaysia was the only country where developers had to undertake the building of low and low-medium cost units.

“Worldwide, this responsibility is shouldered by governments as is the case with healthcare and education,” he added.

By The Star (by David Tan)

SP Setia beefs up commercial assets

SP SETIA Bhd, Malaysia's most valuable property developer, plans to build its first retail mall for RM750 million as part of plans to have more commercial assets.

Almost all of the group's income now comes from residential property but it wants to change that strategy.

"We are planning to increase our commercial content from three per cent now to some 20 to 30 per cent in two to three years. We want to move into commercial as the properties will give us higher value," group managing director Tan Sri Liew Kee Sin told reporters at a briefing in Shah Alam yesterday.

The four-level mall will be built within Setia City, the commercial hub of its flagship township, Setia Alam, in Shah Alam, Selangor. It will have almost as much space as the popular Mid Valley Megamall, with a gross floor area of 1.23 million sq ft.


SP Setia's unit, Bandar Setia Alam Sdn Bhd (BSA), will build it with Lend Lease Asian Retail Investment Fund 2 Ltd (ARIF) via an equally owned joint venture firm, Greenhill Resources Sdn Bhd.

ARIF is a real estate fund advised by Lend Lease Investment Management Pte Ltd, which is part of Lend Lease Corp Ltd, an Australian property group.

The mall is the fund's first retail project in Malaysia.

The mall, which may include a hypermarket, is expected to be opened by the end of 2011 as construction starts in the next six months.

At the signing of the joint venture agreement in Kuala Lumpur yesterday, Liew said Greenhill will buy 12.2ha from BSA for RM119.57 million.

There is also a hospital and university campus project in the pipeline at the 63.2ha Setia City, he said.

"We expect profits from the retail mall to flow through after 2011," he added.

Liew did not rule out building more commercial properties with ARIF, adding that it would sell more land to the Australian fund if it wants.

Meanwhile, Liew said SP Setia is on track to meet its RM1.5 billion sales target this year as it has been achieving monthly sales of up to RM120 million from its mature townships.

It has 16 ongoing projects worth RM30 billion.

The firm made a net profit of RM260 million for the 12 months to October 31 last year. Its revenue was RM1.15 billion.

Liew said SP Setia will continue to launch new projects despite weak market sentiments globally. It is also on track to launch its RM2.5 billion EcoLakes project in Vietnam by October.

By New Straits Times (by Sharen Kaur)

Malaysia’s Berjaya gets license to build HCMC university township

Chairman of the city people’s committee, Le Hoang Quan, handed over the license to Dato’ Francis Ng Sooi Lin, CEO of Berjaya, at the HCMC Reunification Palace in the presence of government officials from Vietnam and Malaysia and real estate executives.

The Vietnam International University Township (VIUT) will be located on a 925-hectare site in Tan Thoi Nhi Commune in Hoc Mon District, around 19 kilometers from the downtown area.

VIUT will be an integrated township comprising four main themes – work, knowledge, lifestyle and leisure.

Besides an international university campus, it will also have a town center with office buildings, commercial blocks, hotels and convention facilities and civic and administrative zones.

Berjaya said VIUT would have additional facilities, like a river port, entertainment parks and sports arenas.

A range of waterfront and riverfront housing is also planned to be built.

Dato Francis Ng said, “We are very happy to receive this investment certificate which is the fourth of our seven property development projects in Vietnam.”

The approved initial investment is $3.5 billion.

The township is expected to be ready in 10 years and accommodate 75,000 residents.

Nguyen Huu Tin, city deputy chairman, said, “The first half of 2008 saw HCMC draw FDI worth $7 billion, and VIUT is the single largest project to date.

“It will not only boost economic development but also provide a high quality workforce for HCMC and the key southern economic area.”

Berjaya has lined up projects worth $10 billion over the next 12 years in Vietnam, including a $230 million commercial center in Dong Nai Province, a $500-million commercial and residential project called Thach Ban New City in Hanoi and the $1.9 billion Vietnam Financial Center comprising six buildings in HCMC’s District 10.

Speaking at the ceremony, Datuk Sri Ong Ka Chuan, Malaysian Minister of Housing Development and Internal Affairs said, “Congratulations HCMC for the selection of Berjaya as the project investor.”

Berjaya is listed on the Malaysian Stock Exchange.

Reported by Vinh Bao

2nd Penang Bridge project right on schedule

The second Penang bridge will be completed in 2011 as scheduled, and the cost will be RM4.5bil.

UEM Group Berhad managing director and chief executive officer Ahmad Pardas Senin said the commonly quoted figure of RM3.6bil was only for the cost of the construction of the bridge over water.

This did not take into account the RM900mil needed to construct the 7km expressway linking it to the North South Expressway.

He explained that there was a price fluctuation clause to account for price changes in building materials and it did not necessarily mean that the final cost would be higher than the estimate because the clause took into consideration prices of building materials going up or down.

Ahmad Pardas said he believed that without the fluctuation clause, no organisation would be willing to start any construction because it would definitely be running at a loss.

“We are committed to completing the job by the end of 2011,” he told a press conference at the project site office here, after a site visit with the media yesterday.

He said the cost of building the bridge now stood at RM4.585bil, including RM285mil in development cost.

“The price of steel has increased by 60% and while fuel went up by 40%. The cost of building the bridge has only gone up by 10.4%,” he said.

Chief Minister Lim Guan Eng had last month asked the Federal Government to explain why the cost of the second Penang bridge project had ballooned from RM2.7bil to RM4.5bil within a year, saying that an explanation was necessary because Penangites would eventually have to bear the expense through toll rates.

Ahmad Pardas clarified that the original cost for the whole project was RM3.6bil and not RM2.7bil as reported in the media.

He said work to build the bridge had not stopped since Prime Minister Datuk Seri Abdullah Ahmad Badawi officiated at the ground-breaking ceremony in November 2006.

The project is undertaken by UEM and Chinese Harbour Engineering Company, which holds a 51% stake and the rest by UEM.

Ahmad Pardas said UEM would spend RM57mil to acquire about 113ha of land belonging to individuals and the Penang Development Corporation for the project.

By The Star

Growing shortage of materials a main concern for housing industry

WITH spiralling construction costs and more than a dozen ongoing projects to complete, Glomac Bhd group managing director Datuk F.D. Iskandar has every reason to be concerned.

He is not alone in this predicament, for the whole housing and construction industry is facing the same problem.

Some of the houses in Bandar Saujana Utama

As vice-president of the Real Estate & Housing Developers' Association (Rehda), Iskandar has also received many complaints from members that contractors have asked for an upward revision of their contract prices.

Some have even refused to participate in new tenders while others have threatened to walk away.

The industry is also faced with a growing shortage of certain raw materials like steel.

“The 9th Malaysia Plan (9MP) has not even started and there is already a big shortage of steel which has seen prices skyrocketed from RM2,350 per tonne to RM4,000 per tonne,” he said, adding that the big projects under the 9MP would need a lot of steel.

China, Iskandar said, was believed to be consuming a third of the global supply of steel for its Olympics projects and China's demand for steel was expected to go up with the massive reconstruction of Sichuan Province after the devastating earthquake in May.

He said Rehda, the International Real Estate Federation (Fiabci) Malaysia Chapter and Master Builders Association of Malaysia had made representations to the Government to allow controlled items like steel to be an open item with no ceiling prices.

Rehda has urged the Government to also abolish its decision to charge 10% import duty on cement importers and instead impose 10% to 20% export duty on all cement and steel materials to ensure adequate supply.

Iskandar said it was “a joke” that despite being a steel exporting country, Malaysia still faced a shortage of steel while contractors in Singapore could buy steel at a cheaper rate.

He said with soaring inflation, people would have lesser disposal income and might hive off purchase of properties.

Iskandar said the Government had given the “green light” for Fiabci Malaysia and Rehda to help promote Malaysian real estate to foreign investors under the Malaysia Property Incorporated scheme.

“We are still brain-storming. Malaysia needs to re-brand itself, be more transparent and attract more foreign investments,” he added.

by The Star

Iskandar Malaysia Not Part Of Singapore But Competitor, Says Johor MB

JOHOR BAHARU, June 30 (Bernama) -- The Iskandar Malaysia development project covering 2,217 sq km will not become part of Singapore but more accurately a competitor to the republic, Johor Menteri Besar Datuk Abdul Ghani Othman said.

He said the issue of Singapore becoming part of Iskandar Malaysia did not arise because until today, no direct investment from the country had flowed into the region.

"Iskandar Malaysia has drawn over 150 companies including from the Middle East and Japan besides local companies. It means the region is not being developed solely through foreign investments.

"Though foreign investors are encouraged to invest, the state government does not plan the development being made solely by them. So, if there are concerns over Singapore's role, I am more inclined to summarise that Iskandar Malaysia is Singapore's competitor," he said.

Ghani said this in reply to queries by Datuk Aziz Sapian (BN-Nusajaya), Datuk Dr Adham Baba (BN-Pasir Raja), Datuk Ir Hasni Mohamad (BN-Benut), Mok Chek Hou (BN-Stulang), Cheong Chin Liang (BN-Bukit Batu) and Dr Sheikh Ibrahim Salleh (Pas-Sungai Abong).

He said the state and federal governments would continue to ensure the Bumiputeras in Iskandar Malaysia are not sidelined by ensuring Bumiputera interests through agencies and companies like UDA, Johor Corporation, UEM Land and Pelangi Bhd.

He said the agencies played a role by ensuring real estate holdings by the Bumiputeras while agencies like MARA and Bumiputera Real Estate Trust Foundation would assist Bumiputera ownerships in strategic projects.

"Certain luxury developments in Iskandar Malaysia meanwhile are aimed at generating the economy and economic activities in the region while the Bumiputeras and local residents will enjoy benefits through economic activities generated through the projects," he said.

He said the state government would ensure the luxury project developers contribute to the Social Development Fund so that direct returns to the community through Affordable Housing and other social projects could continue.

Meanwhile, Johor Agriculture and Agro-Based Industry Committee Chairman Abdul Aziz Kaprawi said the Johor Agriculture Department aimed to create 550 group plantation projects with the involvement of 7,443 farmers in the state by the year 2010.

-- BERNAMA