Richard Hassell is one half of one of the hottest design and architectural firms in town, WOHA, which he set up with co-founding director, Wong Mun Summ. He grew up in Southern Australia back in the 1970s. Amid a global oil crisis then, his father, who had a great interest in sustainable energy, built a holiday home in the outback powered by a wind generator and a solar panel system to capture solar power. Until now, that is. It was a hotel resort property in Uluwatu, on the southern tip of the island of Bali in Indonesia, that presented him with the opportunity. In most sectors of real estate, especially in office, the designer, the developer and the end-users or occupiers are not connected, thus there are no feedback channels as to whether a design worked, or what else can be done to improve sustainability. "The hotel industry is quite interesting in that the missing connections between the designer, the developer and the end-user or operator have actually been [in place] for a long time because of the kind of operation agreements they have and because they usually benefit from the shared profits of the organisation," explains Hassell. "And customers respond very well to the green idea." Through the design of the Alila Villas Uluwatu, Hassell shows that being eco-friendly doesn't come at the expense of luxury and comfort. The 13.5ha plot, owned by Indonesian property developer Franky Tjahyadikarta of PT Bukit Uluwatu Villas, was perched on the edge of a steep cliff overlooking the Indian Ocean. The idea was to build a project based on the principles of Environmentally Sustainable Design (ESD). The resort is also registered for Green Globe certification and will be the first hotel in Bali to get the highest level of certification for ESD. "We were trying to create something contemporary, [while being] conscious of the environment," says Hassell. This was the overall theme driving the design of the Alila Villas Uluwatu, which has 41 one-bedroom hotel villas available only for rent, and 25 three-bedroom hillside bungalows and villas for sale. The hillside bungalows and villas, which will be completed in mid-2008, are priced from US$2 million (RM6.7 million). "We wanted to capitalise on the dramatic site and the views of the sea," says Hassell. So, instead of the traditional Balinese steep rooftops that would have blocked all the million-dollar views, the roofs have been made flat and turned into terrace gardens that follow the contours of the terrain. The roofs were covered with lava rocks, which absorb solar energy, thereby keeping the villas cool, but they are also ideal for growing the local Balinese Savannah-like vegetation. The developer turned the rooftops of the hotel villas into nurseries to see which plants thrived best in the local climate, which was drier than central Bali and "very much like South Africa", says Hassell. All material used came from Bali and Java, and the biggest challenge was getting timber. Fortunately, the government was converting telephone poles in Bali from wood to concrete, and also replacing old railway tracks, so the company managed to buy all the discarded wood. Inspired by Central Java's 2,000-year history in the use of bronze for furniture and ornaments, the design team used the material for their furnishing. "The problem was that we had so much bronze in our furniture that they were stolen and had already been recycled," Hassell says. "But I think it's nice to use local materials and provide employment for the local community. It's the idea of thinking globally, but doing a lot of research locally to make a lot of these things." All the hard work was worth it, though. "I think it's philanthropy — sharing knowledge, having an environmental plan and involving the community," he adds. (Cecilia Chow is City & Country editor at The EDGE Singapore) By The EDGE Malaysia (By Cecilia Chow)
"I remember listening to the radio, and my mum running around with the vacuum cleaner, all using solar power," reminisces Hassell, who spoke at the Jones Lang LaSalle (JLL) inaugural conference on sustainability on Aug 30, with the theme "Sustainable Real Estate in Singapore: Where to from Here?".
He became fascinated with the idea of building a completely self-sustainable property, way before it became fashionable. "It's something that we've always wanted to do," says Hassell. "But all through the 1980s, because of cheap fuel, no one was interested in doing anything sustainable."
The architect was also conscious of keeping the existing terrain and not discharging water from the site into the sea, which would have damaged the coral reef system. In clearing the land, large trees were left untouched. To conserve water, rain gardens were created to serve as water catchments during the rainy season; they were designed such that water is gradually drained from them to irrigate the plants.
Monday, October 29, 2007
Designing sustainable luxury villas
What a makeover can do
Attracted by the potential return on investment, interior design contracting company Bukit Kiara Interiors Sdn Bhd paid RM2.05 million for a bungalow in Pantai Hill in early 2004. After obtaining approval from the relevant authorities, the company invested another RM1million in renovations and other incidental costs. Upon completion of the renovation works a year ago, the property was put back on the market and within weeks it was sold for RM4.2 million, says Bukit Kiara Properties group managing director N K Tong. Bukit Kiara Interiors is a sister company of Bukit Kiara Properties, a developer of landed and high-rise residences in the upmarket Mont'Kiara.
The 10,000 sq ft property had some 4,500 sq ft in built-up but this was expanded to about 5,500 sq ft with the renovations.
This was the second such property in Pantai Hill that Bukit Kiara Interiors has bought, renovated and sold. The first was acquired in 2002 for RM1.95 million. This freehold 9,100 sq ft property was sold in early 2005 for RM2.8 million after the gross built-up area had been expanded by 10% to 4,400sq ft.
On the renovations that went into the recently sold house, Tong says the main objective was to capture the advantage of the elevated site, as the location has little obstruction in terms of city view.
With that in mind, new walls, glass panels and partitions were erected; an outdoor pool was created, the wet kitchen extended and the roof dismantled and replaced. A walk-in wardrobe was added to the master bedroom, while a part of the courtyard area was converted into a wet kitchen and maid's room. A new study with en-suite bathroom was also created. Almost all the floor finishes were replaced with quality tiles or solid timber. The electric supply, electrical wiring and air-con piping were upgraded while all plumbing pipes and sanitary ware changed. New designer grilles and a new gate went up at the driveway. A new alarm system was also installed. Outside, the gardens were re-landscaped.
"By doing this and more, about 1,100 sq ft was added to the built-up area. But more importantly, the property now fully capitalises on its potential and enjoys breathtaking city views both day and night," adds Tong.
According to Pillai Properties managing director Prasad Pillai, refurbishing an old home and then selling it at a premium is a lucrative business especially in land-scarce prime areas. "Pantai Hill is a target of investors who are waiting to pounce on any old rundown bungalow for sale here," he says.
Pantai Hills is an old and established area, which makes it ideal for investors. They pay mainly for the land value as the house itself would be of little value. "I have a long list of clients who constantly call me up asking me to remember them if there are any such houses for sale," he reveals.
There are, however, few houses among the 300-odd bungalows that come on the market. If there is any house up for sale, it is usually taken up within weeks, he says, adding that those who buy into the area are usually successful businessmen between the ages of 40 and 45, wishing to upgrade their lifestyle. They are willing to pay for something they like and since they have the means, they are fussy about quality. Not only do they look for refurbished homes, but also at the quality of the design, adds Pillai.
Rahim & Co managing director Robert Ang says it is quite common nowadays to redevelop an old house. "A number of houses built 30 years ago are small but the land area is large so today's purchasers with new money, will tear down the house and rebuild with a much bigger built-up to show they have 'arrived'. They are not going to stay in a house with four rooms and two bathrooms. They want a house with seven bedrooms and seven bathrooms."
Ang cites the experience of a buyer who paid RM2.8 million for a house in Pantai Hills two years ago, spent RM1 million over 1½ years to upgrade it and then sold it for RM5.1 million recently.
Prices, offers Ang, will continue to appreciate as demand increases and supply diminishes. Sellers are also getting very savvy and many are not selling just yet.
By The EDGE MALAYSIA
Pantai Hill, the hidden gem
There is one other place that is just as exclusive, but which has remained hidden. In the words of some real-estate agents, Pantai Hill or Bukit Pantai is probably one of the country's best-kept secrets in terms of exclusivity.
Located between Bangsar and the part of the SPRINT Highway that runs next to the grounds of Universiti Malaya, Pantai Hill covers about 120 acres of mainly freehold land, estimates real estate consultancy Rahim & Co.
Pantai Hill is appealing, especially to owner-occupiers, given its centralised location with easy access to Petaling Jaya and the city centre. While the area enjoys the benefits of being neighbours with popular Bangsar in terms of accessibility and amenities, it remains relatively private, Robert Ang, managing director of Rahim & Co, tells City & Country.
Not only that, the homes on Pantai Hill sit on sizeable plots. "We are talking about an average 10,000 sq ft of land for the bungalows here. Some even have up to 20,000 sq ft of land," Ang points out.
In comparison, the average land area for bungalows in Damansara Heights is between 5,000 and 6,000 sq ft. Value-wise, on a per sq ft basis, Damansara Heights is more expensive.
With such appealing features, why has Pantai Hill been so "quiet"?
Pantai Hill is not as well known because there are not as many houses on sale here, reasons Ang. This could be because, as resident Katherine Lim emphatically declares, "once you have lived here, you don't want to move".
Lim, who is also a real-estate agent, has been living in Pantai Hill for 16 years, since relocating from Damansara Heights.
"I love the place. It is centralised. It is also extremely convenient; you want to get a bottle of milk, just go down the road. We go to Bangsar for everything and yet we are away from the hustle and bustle of Bangsar," she says.
"My house is on top of a hill, so it is quiet and the view is great. We have tree-lined roads and lots of cul-de-sacs. Many of the residents here are from the older generation and have been in the area for a long time. There are quite a number of doctors who own houses here, maybe because of the hospital nearby," she adds.
For Prasad Pillai, managing director of Pillai Properties, Pantai Hill's success is thanks to neighbouring Bangsar with its excellent amenities, including thriving retail offerings such as Bangsar Shopping Centre and Bangsar Village 1 and 2.
However, unlike Bangsar, Pantai Hill has lower density and is quieter. Its busiest part would be the houses along the main road of Jalan Bukti Pantai, Pillai points out.
The view seen from Lim's house, says Pillai, is one of the area's selling points.
"The houses are, after all, on a hill. So, many of them have magnificent views. There are actually not many high-rises here getting in the way of these views. One of the high-rises is the rather old Pantai Towers and the other is the spanking new Zehn Bukit Pantai, which has received tremendous response," he adds.
Pantai Hill is about 35 years old and its values have been climbing at no less than 10% per annum over the last five years, Pillai says, adding that today's prices are as high as RM350 to RM400 psf, depending on the location and condition of the property. His office is in the vicinity.
Rahim & Co's Yap Kong Keong says the average price of a bungalow that is more than 10 years old averages around RM2.5 million, while it is around RM3.5 million for a newer one (based on transactions handled by the agency over the last five years). This works out to about RM250 to RM350 psf. The average growth in property values here is about 10% a year but just over the last one year, there has been a jump of as high as 50%, notes Yap. Prices are certainly rising fast.
"One landowner in Pantai Hill recently even asked for RM350 psf just for the land and he is not settling for anything less," he adds.
Although the hilly terrain here is quite challenging, most of the land here has already been carved out, with houses on them. So, "one good thing about the area is you won't find a condo suddenly in front of you," offers Rahim & Co's Ang.
The recent jump in prices, he says, is in tandem with the rise in value of high-end residential properties across the Klang Valley. This is mainly due to the various government incentives for the property market and resultant influx of foreign investors, and the generally positive outlook for the economy, buoyed by a strong stock market.
For example, Rahim & Co sold a property for RM5 million in Kenny Hills a few months ago and the owner is now looking to selling it for RM7 million. This is a potential gain of 30% to 40% in less than six months.
Clearly, more investors are looking at Pantai Hill for its potential upside. Resident and property agent Lim sold a bungalow here for RM4.3 million early this year. The property had a land area of 9,000 sq ft, with a built-up of 4,000 sq ft and a swimming pool, but it still needed doing up.
Lim herself paid RM180 psf for a parcel here early last year. She sees the land going for probably RM300 psf now. She also believes that property prices here will eventually be on a par with those in Damansara Heights.
By The EDGE MALAYSIA
Managing your mortgage well
Part of managing the investment that is your home is managing the mortgage that comes with it. Here are ways to maximise cost savings when getting your home loan.
A good mortgage package is integral when investing in a home for the long term as you would want to hold down the lowest interest rates to maximise savings.
Adrian Un: Fixed rates allow you to hedge against future interest-rate hikes
Just as with buying property, shop around for the best rates. Although the first offer may look good, with mortgage packages as competitive as they are today, you may be able to get a better deal. Compare the quotations given by financial institutions and talk to the officers in charge about a counter-offer if their competitors are able to provide better rates. Adrian Un, director of Mortgage Broker Sdn Bhd, says banks would usually consider giving a more attractive deal if the applicants have a good record. "If they come from a good background (for example, working for a multinational company) and have a good credit rating, the banks would usually provide better rates."
What sort of mortgage package should you get? Un and Martin Chow, head of sales and business development at Fiscal Wise Sdn Bhd, give some tips.
Refinance, but be cautious
Since banks are becoming more competitive, refinancing an old home loan may be a smart move. If you had bought your home five years ago, your loan could be as high as BLR + 1%. Today, banks are offering rates as low as BLR - 1.6%. Imagine that you had borrowed RM250,000 over 25 years at a rate of 7%. That translates into RM1,770 per month. Say you have whittled down your outstanding loan to RM230,000 after five years. Refinance now at a fixed rate of 6% for the remaining 20 years and this lowers the monthly instalments to RM1,650.
Watch out, though. There is always a potential to get deeper into debt when you refinance. Banks now offer 30-year mortgages even though the borrower may already be 35 years of age. Refinancing a 20-year mortgage to a 30-year one can be tempting because it effectively reduces your monthly payments. But on the whole, you may be worse off, especially if you spend the savings.
Foo: Consider your overall cash flow and risk profile
"A leverage itself is not bad but needs to be managed depending on a person's situation," says financial planner Robert Foo, financial planner and principal consultant of MyFP Services Sdn Bhd. By the time you retire, you should be debt-free, note financial planners.
"A 30-year loan would normally mean that you will still be repaying it when you're retired," says Foo.
Making prepayments
One good way to pay off your mortgage faster is to make payments on the principal. This effectively lowers the total interest amount. You can achieve this by paying extra amounts each month or dumping in a lump sum, such as your year-end bonus.
In a 25-year, RM250,000 loan at an interest rate of 6%, making an extra payment of RM5,000 a year would result in the loan being paid off eight years earlier.
Sure, it sounds good. If the interest rate is at 6%, paying down your loan effectively gives you a 6% return on the funds, fuss-free.
But again, consider your overall cash flow and risk profile, says Foo. "There could be better uses for your money."
By The EDGE MALAYSIA (By Tho Li Ming)
Lien Hoe makes baffling moves
It seems that Lien Hoe, which had in January this year sold its Kompleks Lien Hoe in Johor Baru to Perduren for RM94.7 million, now has exposure to the same asset at the cheaper price of RM22.7 million.
To recap, in August, Lien Hoe forked out RM10 million to increase its shareholding in Perduren from 2.94% to 10.28%. On Oct 22, Lien Hoe purchased an additional 13 million Perduren shares in a married off-market deal for RM11.7 million. Both were bought at a premium to Perduren's share price at the time.
However, given that property prices are likely to rise in the coming months, Perduren could see a significant improvement in the value of its two shopping complexes. As such, there could be some potential upside to Lien Hoe's investment.
At present, Lien Hoe's biggest shareholder is its managing director Datuk Yap Sing Hock, who directly holds a 26.9% stake.
Although it looks to be a sweet deal, it should be noted that Lien Hoe is increasing its exposure to a company which is holding an asset that it (Lien Hoe) had earlier sold because the property was giving diminishing returns. Also, the fact that Lien Hoe is increasing its stake in Perduren when its own finances are still on shaky ground has baffled property analysts.
"Lien Hoe has been actively disposing of its assets in the past year as part of its restructuring exercise, and using the money to pare down its debts. Logic suggests that Lien Hoe would not undertake such an investment at this point in time," says an analyst.
Yap could not be reached for comments.
Lien Hoe now holds a 20.56% stake in Perduren and is its largest shareholder. This is significant, considering that Perduren's previous shareholding structure was highly fragmented, according to its latest annual report, with no one shareholder holding more than 10% of the company's shares.
However, Lien Hoe shareholders might want to question whether this investment in Perduren is making the best use of the company's limited resources.
When Lien Hoe first upped its stake, the company came under flak for increasing its gearing from 0.67 to 0.70 times. Although marginal, analysts found it unusual that a company that had been focusing on shoring up its balance sheet would intentionally increase its debt level.
In its latest exercise, Lien Hoe stated that it would be funding the share purchase using its cash reserves. But, according to its latest second-quarter results, the group's cash and bank balances only total RM7.2 million. Add in the short-term borrowings of Lien Hoe totalling RM89.3 million, and it appears that the company can ill-afford its latest purchase.
However, Lien Hoe is confident that turning Perduren into an associate company will prove beneficial in the long run.
"This move will enable the company (Lien Hoe) to equity account the financial results of Perduren in its books.
Further earnings growth for Perduren can be expected from its intended venture into property development," Lien Hoe states in an announcement.
But if Lien Hoe's reasons for increasing its stake is to equity account the share of profits, it is not going to be anytime soon, considering Perduren's less than stellar financial results. For the financial year ended March 31, 2007, Perduren made a loss of RM1.8 million while its revenue stood at RM6.9 million.
The good news is, the losses came from Perduren's discontinued garment operations and are hence a one-off thing. As such, Perduren is optimistic about returning to profitability for FY2008, on the back of its two main properties Holiday Plaza and Kompleks Lien Hoe.
Lien Hoe had seen income from its various shopping complexes decline in the face of stiff competition. The company also saw the resignation of its executive director Kenneth Vun, who left on Oct 24 under a cloud of controversy. Earlier this month, the Securities Commission had filed a civil suit against Vun for RM2.5 million for alleged misuse of funds from the initial public offering of FTEC Resources Bhd, where Vun is the managing director.
There also could be another potential twist to the tale. On Oct 1, Perduren appointed its current property manager Holiday Plaza Sdn Bhd to manage Kompleks Lien Hoe for RM285,000 per month.
"The price paid appears rather steep, given the condition and location of the mall," says an industry observer, who admits he was surprised at the pricing.
Coincidentally, listed in Lien Hoe's latest annual report as a wholly owned but dormant subsidiary is a company named Holiday Plaza Complex Management Sdn Bhd. However, information given by Perduren about Holiday Plaza reveals no obvious links to Lien Hoe or any of its subsidiaries.
Whatever the case, Lien Hoe, by being the single largest shareholder in Perduren, has indirect control over the complex it sold to the latter. And that too at a much cheaper cost. So, has Perduren shareholders really benefited from its acquisition of Komplek Lien Hoe? It certainly does not appear so.
By The EDGE
Hospitality investments trending up
Foreign investments in the local real estate sector are not confined to just commercial and residential properties: Money is being put into the leisure/resort sector as well.
According to Zerin Properties chief executive officer Previndran Singhe, foreign investors accounted for a hefty 85 per cent of the value of hotel transactions last year, compared with 44 per cent the previous year.
Increasing investments in the hospitality market are a growing trend, he said, adding that foreign investments in hotels in Malaysia grew by 64 per cent in 2006, with both hotel funds and investment funds driving the demand.
Among the hotel transactions, Previndran added, were the 571-room Crown Princess which was transacted at RM240 million or RM420,315 per room, Grand Centrepoint (100 rooms for RM12.5 million/RM125,000 per room) and Westin (452 rooms for RM455 million/RM1 million) in Kuala Lumpur; and Sheraton Subang (502 rooms for RM140 million/RM278,884) in Selangor.
The others were Ferringhi Beach Hotel (350 rooms for RM43 million/RM122,857 per room) and Midtown Hotel (96 rooms; RM12 million/RM125,000) in Penang; Holiday Villa (258; RM55 million/RM213,178) in Langkawi; Holiday Villa (160; RM31 million/ RM193,750) in Kedah; Holiday Villa (100; RM21.87 million/RM195,286) in Kuantan; and Berjaya Palace Hotel (160; RM21 million/ RM131,250) in Sabah.
In the four- and five-star hotel sector in KL, local investors accounted for 58 per cent of the ownership as of December 2006 and foreigners the remaining 42 per cent.
In 2005, hotel transactions in KL included the Mandarin Oriental in KL City Centre (642 rooms; RM600 million/RM933,000), Sheraton Imperial (398; RM225 million/ RM565,000) and Nikko Hotel (470; RM235 million/RM500,000).
Elsewhere, the transactions included Sheraton Perdana (207; RM77.5 million/ RM374,396) in Langkawi; Merlin Inn (66; RM13.5 million/RM204,545) in Cameron Highlands; Merlin Johor Baru (149; RM10.46 million/RM70,201); and Sheraton Kuantan (267; RM36.6 million/RM137,078).
Previndran envisages the advent of resort homes in Langkawi, Kuala Terengganu and Kuantan in Peninsular Malaysia as well as Kudat, Kota Kinabalu, Tuaran and Papar in Sabah, given the country's gorgeous islands, breathtaking sceneries, spectacular diving spots, laid-back charm and good quality of life.
For Far East Consortium International Ltd (Fecil) deputy chairman and chief executive officer Tan Sri David Chiu, growing tourist arrivals, which rose from 15.7 million in 2004 to 16.4 million in 2005 and on to 17.6 million last year, was a key factor in his decision to invest in the local hospitality real estate.
Other reasons are the improving infrastructure, Malaysia's evolvement as a shopping haven, low hotel rates, and of course commendable real gross domestic product growth.
Besides Malaysia, which is expected to see a 10.8 per cent increase in tourist arrivals next year, Fecil also owns and operates hotels in Hong Kong, Macau and China.
According to the Leisure Stock Report for the second quarter of this year from the Valuation and Property Services Department's National Property Information Centre (Napic), the average occupancy rate at five-, four- and three-star hotels was well maintained at 65.4 per cent, 60.8 per cent and 62.6 per cent respectively.
The average occupancy rate for hotels in KL ranged from below 50 per cent at those in Jalan Ipoh and Jalan Raja Laut to near 100 per cent at hotels in Jalan Bukit Bintang, Jalan Changkat Bukit Bintang and Jalan Masjid India.
In Selangor, the rate ranged from 60 per cent at hotels in Shah Alam to 70 per cent in Subang and above 80 per cent in Sepang.
In Johor, the figures varied from below 20 per cent in Muar to above 70 per cent in Batu Pahat and Kluang.
In Penang, the average occupancy rate of hotels in the city centre and those at beachfronts ranged from 65 per cent to almost 90 per cent, while Genting Highlands, dubbed Asia's leading integrated leisure and entertainment resort, saw an average rate of 75 per cent for a five-star hotel and over 90 per cent for a three-star.
The country has a total of 2,180 hotels and 149,820 rooms, with KL, Johor, Pahang, Sabah and Sarawak accounting for over 200 hotels each.
KL has the highest number of "incoming supply" of hotels and rooms, at 16 and 5,066; followed by Johor's nine and 3,038; while Selangor, Pahang and Terengganu are getting four hotels each, offering 3,163, 994 and 725 rooms.
Of the total of 128 "planned supply" of hotels offering 33,713 rooms, KL again accounted for the lion's share of 95 hotels with 21,650 rooms. Terengganu was a distant second with six hotels offering 482 rooms while Negeri Sembilan and Pahang each will have five new hotels offering 1,805 and 4,977 rooms.
Overwhelming response to Tan & Tan's One Jelatek
TAN & Tan Developments Bhd's latest low-density condominium, One Jelatek, received overwhelming response during a recent sales preview. Purchasers snapped up 90 per cent of the 90 available units in just two hours, leaving behind only Bumiputera units.
One Jelatek is expected to achieve attractive rental returns when it is completed in 2010, the developer said in a statement.
"This 20-storey chic and stylish development sits on a valuable pocket of freehold land along Jalan Jelatek, located just minutes away from KLCC, Great Eastern Mall, The Amp Walk, and Gleneagles Medical Centre, and conveniently connected to the rest of Klang Valley via the Jalan Ampang, the Ampang Elevated Highway and two Putra LRT stations," Tan & Tan group marketing general manager Kevin Kuok said.
The built-up area of One Jelatek standard units range from 1,327 to 1,649 sq ft, with one bedroom and study, two bedrooms and study, and 3-bedroom configurations at an average price of RM420 per sq ft.
All units come with split unit air-conditioning, built-in kitchen cabinets, sizeable four-fixture master bathrooms, dedicated powder room, store and laundry area and two car park bays.
"Over the years we have been one of the leading property players in the city area. With the record success of One Jelatek and other developments such as U-Thant Residence, Northpoint, Cendana, Bukit Sri Persekutuan, Desa Damansara 2 and Hampshire Park, Tan & Tan's prime focus will remain within the city," added Teh Boon Ghee, Tan & Tan senior general manager (project developments).
He said Kuala Lumpur will continue to be the location for Tan & Tan's new developments next year.
Tradewinds mulls setting up property trust
TRADEWINDS Corp Bhd, which recently reorganised its business to focus on its hotel and property businesses, is weighing the option of setting up a real estate investment trust (REIT) possibly on a joint venture basis.
"Doing a REIT is a possibility on our property side," chairman Datuk Seri Megat Najmuddin Megat Khas said.
"We have been approached by a few managers to spin off a REIT and approached by parties to do it on a joint venture basis," Tradewinds Hotels and Resorts Sdn Bhd's chief executive officer Shaharul Farez Hassan said.
Shaharul added that the properties likely to be injected into the REIT vehicle are the non-hotel commercial properties such as the 657,866 sq ft Menara Tun Razak and 60,153 sq m Komplex Antarabangsa which have an estimated value of RM350 million.
The rental for the former is RM3.80 per sq ft and the latter is RM4.60.
In a recent interview with Business Times, Shaharul said that while the company's plan to set up the REIT instrument is still preliminary, it is an option the firm is looking into.
"As a rule of thumb, we want to have a minimum asset value of RM500 million before we do a REIT," he said, adding that at this point it does not have the said portfolio.
"If we do a REIT, we cannot do it by ourselves ... either we build more or we do it on partnership," Shaharul said.
"The ones who have approached us are those who also have about two or three buildings, he said.
"Together there would be two promoters with the required critical mass."
The company owns some 10 hotels including Crowne Plaza Mutiara Kuala Lumpur, Hotel Istana, Hilton Petaling Jaya and Mutiara Johor Baru.
Asked why it does not want to inject one of the hotel components into the REIT to achieve the RM500 million asset target, Shaharul said the group does not see value in pumping in the hotel and then to underwriting the yield return on the property.
Tradewinds recently split its plantation and sugar refining business from the group to focus on its hotel and property businesses.
On the likely date when the REIT will take off, Shaharul said it will depend on timing, including whether the market is willing to pay a premium for it.
BLand eyes upmarket buyers
Taman Seputeh link bungalows expected to draw strong response
BERJAYA Land Bhd (BLand) hopes to attract upmarket homebuyers with its soon-to-be-launched link bungalows in Taman Seputeh, Kuala Lumpur.
The project, known as Vasana 25, spreads across two hectares of freehold land and will house 22 link bungalows and three bungalows.
The gross development value of the project is RM109 million and the selling price of the link bungalows will begin at RM3 million.
"By early next year we will launch (this project)," BLand properties marketing general manager Mah Siew Wan told reporters after the company's shareholders' meeting last Friday.
Mah said she expected the three-storey bungalows to be "very well-received", given its gated community concept but declined to provide the expected take-up rate.
The built-up area is 4,000 to 5,000 sq ft with land area of 5,000 to 7,000 sq ft.
She added that since some link bungalows would be built on higher ground, these units would come complete with elevators.
"As you age, it becomes more difficult to climb stairs hence we've factored that consideration into our design," she said.
Mah said another project to be launched by end-2007 is Savanna 2 in Bukit Jalil, which is currently awaiting building plan approval.
This project is a four-storey block with 32 units of condominium villas built on 0.49 hectares of freehold land.
This follows the success of Savanna, two blocks of condominium units fully sold after the launch in October 2005.
"One block was taken by Korea's Hanju I & D Co Ltd, which has also expressed interest in purchasing another development in Bukit Jalil," she said.
Hanju signed a memorandum of understanding mid-2007 for RM126 million in cash to purchase the KM3 project, which is a 20-storey condominium with 308 units on 1.18 hectares of freehold land.
Mulpha Land wins another Fiabci award
MULPHA Land Bhd has bagged another Fiabci award for its Leisure Farm Resort.
Picture: view of the Pinggiran Bayou housing development.
This time, it won the Fiabci Malaysia Property Award 2007 in the best residential development (low rise) category for its lovely Pinggiran Bayou Village Homes, an exclusive enclave of 122 courtyard homes in a secure and double-gated and guarded community.
The low-density series of courtyard homes lines a linear waterway and fronts the expansive Canal Park.
One has to visit the place to truly appreciate the amount of effort Mulpha Land has put in.
The environmentally-friendly clubhouse at Pinggiran Bayou Village Homes.
The freehold, 1,765-acre Leisure Farm Resort in Gelang Patah, Johor, has bagged numerous accolades such as the Fiabci Malaysia Property Award for Best Masterplan 2005, Fiabci Prix d'Excellence 2006, and PAM Architecture Steel Award.
Pinggiran Bayou homes are not only attractive but they were designed to reflect its philosophy of creating a healthy balance of mind, body and soul. One can see the effort to protect, preserve, recycle and conserve as much of its natural surroundings as possible.
For example, these clustered homes (following the successful launch of the Garden Court cluster homes) feature wide spaces and private garden.
They are carefully sculptured with a series of interior and exterior green spaces that retain much of the land's natural contour and maximises natural lighting and ventilation. The building design is one of the winners of the PAM Architectural Award 2003-Johor Chapter.
Mulpha International Bhd general manager (property division) Ronn Yong said: “We're very honoured to win this award. It is a result of great teamwork and our efforts to build a product that is a market leader.
“We are constantly setting new benchmarks as a long-term commitment to our purchasers.”
Yong said the concept took into consideration the need to conserve and recycle rainwater, the provision of shades and a children-friendly and handicapped-friendly environment.
The double-volume living room of a Pinggiran Bayou Village Home.
“As such, we have provided ramps in public areas where one can push a trolley or wheelchair. There are also parking bays for the handicapped,” he said, adding that the internal streets had low curbs.
For example, the roof of the clubhouse does not have gutters but rainwater falls into a pond and all surface water runs off into the canal. Some of the water is recycled for watering the gardens.
Rain is collected and recycled in ponds and weir canals that also form pocket parks and eco-friendly recreational spaces. “The idea is adapted from the Four Seasons Resort Bali at Sayan,” said Yong.
Features of the Pinggiran Bayou Village Homes include double-volume ceilings for the living area, natural lighting, cross ventilation, private sanctuary, roof deck garden, floor-to-ceiling windows, private courtyard, open plan kitchen, formal dining area, forecourt garden, two covered parking bays, 26ft-wide frontage (Type A), private enclosed yard, alarm system and split level living and dining rooms.
In its effort to live up to its tagline Redefining Community Living, the developer has also designed meandering textured streets and landscaped corridors. It even built a canal link bridge.
There is a small but cute clubhouse with Spanish step garden, steam pool and a reflective roof pond, garden maze, amphitheatre, water features and children-friendly pool.
About 70% of the 122 completed units (with certificates of fitness) have been sold. A two-room unit with 1,900-sq-ft built up is priced from RM522,000. A three-room 1,600-sq-ft unit is priced around RM500,000 (sold out) while a four-room unit with 2,300-sq-ft built-up area is priced from RM570,000.
Yong said 15 new show bungalows would be built along the canal. They would have land size of 20,000 to 30,000 sq ft with built-up areas from 7,000 sq ft. Prices are from RM4mil to RM5mil each.
There are plans to revamp the completed Golf View zero lot bungalows. As for the sale of bungalow lots, there are still left about 100 Phase 1 lots (an acre each) and 80 lots of the Phase 2 bungalow land. Prices have risen from RM18 per sq ft to between RM35 and RM60 per sq ft.
Meanwhile, 10 of the 11 big show villas in the resort, including the majestic Colonade, have been sold.
For this writer, it has been an unforgettable experience staying in several of these mansions over the past eight years or so, and Leisure Farm is truly a gem of a resort that is waiting to be discovered.
Hotel sector high on investors’ radar screen
FOREIGN groups are coming in greater numbers to acquire hotels in Malaysia, especially in the Klang Valley, to take advantage of the good value and expected strong growth in the industry.
Last year, a whopping 85% of the value of hotel transactions in the country was by foreigners compared with 44% in 2005.
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»I think we are going to see a consolidation of hotel ownership« PREVINDRAN SINGHE |
According to Zerin Properties chief executive officer Previndran Singhe, the growing interest among foreigners in the hotel sector was triggered by the strong growth in the tourism sector and the economy.
Generally the foreign investors were from the region and the Middle East, he said, adding that there was also a growing interest from investors in Singapore, Thailand and Europe and American funds and hotel chains.
“The advent of low-cost carriers and the strong tourism drive may create an insatiable appetite for hotels,” Previndran told StarBiz.
In the past few years, Zerin Properties has concluded a number of hotel transactions within and outside the country for foreign groups.
“We are basically hotel dealmakers in the region. We are in the midst of concluding a sale in Indochina and selling a resort in the Philippines, and has been appointed by a Middle East fund to negotiate the purchase of hotels in the region.”
Previndran said Zerin was also involved in hotel sales in Vietnam, the Philippines, Indonesia, Australia and other emerging markets.
As the exclusive agent for the asset disposal programme of the Sheraton Chain of Hotels in Malaysia, it concluded the sale of the 207-room Sheraton Perdana in Langkawi for RM77.5mil and the 267-room Sheraton Kuantan for RM36.6mil in 2005.
It was also involved in the sale of the 149-room Merlin Johor Baru for RM10.46mil and the 66-room Merlin Inn in Cameron Highlands for RM13.5mil.
Last year, the 100-room Grand Centerpoint in Kuala Lumpur was sold for RM12.5mil, and the latest deal was the sale of the 91-room Four Seasons in Langkawi for RM435mil.
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The 452-room Westin Kuala Lumpur was sold for RM455mil in 2006, or a whopping RM1mil a room |
“The hotels here are on par with other international markets and the local industry is leading in terms of product innovation through products such as The Datai, Hilton Batang Ai and Tune Hotel.
“New hotels coming in with truly leading designs include Maya Hotel and KL Hilton, which are niche in their market positioning and are market leading,” Previndran said.
Renovation work to spruce up some of the leading existing hotels such as Shangri-La Kuala Lumpur, Sheraton Imperial and The Regent is also underway.
With the tourism drive, average room rates (ARR) for 5-star hotels have moved up by at least 20% over the past two years while other categories of hotels have recorded an ARR increase of to 5% 10%.
Hotel occupancy rates in the Klang Valley have also increased from the mid-60's two years ago to about 70% now.
In August, 4- and 5-star hotels recorded an average occupancy rate of 86% while the average room rate climbed to RM361 from below RM300 previously.
“Moving forward, I think we are going to see a consolidation of hotel ownership – from fragmented ownership to chain ownership, and maybe even a hospitality-based real estate investment trust (REIT) like the Starwood REIT in the US.
“These consolidated owners will be locals and foreigners from the region who are already chain owners. There is also a strong Middle Eastern interest coming into the market, mainly in the premium properties,” Previndran said.
He said more top class brands, such as Conrad and Intercontinental, were expected to come into the market in the near future.
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Around the region, Previndran said Vietnam was experiencing a boom in the hotel industry due to shortage of good hotels.
“We see strong opportunities in the Vietnamese cities and resorts for premium and limited service hotels.
“The Philippines is also a good market as the population base is big and its islands are truly a big attraction for the Korean and Japanese markets.
“Australia is also another strong market, with Sydney being the most visited city in the Asia-Pacific.”
CIMB-Mapletree buying YNH condo, say sources
CIMB-Mapletree has agreed to purchase one block of YNH Property Bhd's Ceriaan Kiara project in Mont' Kiara, according to sources close to the deal.
The project comprises two luxurious condominium blocks, each with 119 units, located opposite the Garden International School.
StarBiz learned that the acquisition had an estimated gross sales value of over RM60mil. It is understood that there would also be other deals with CIMB-Mapletree soon.
YNH has sold over 85% of the units in the other block.
It is learnt that the capital value of similar properties in the Mont' Kiara area has risen about 20% from a year ago. At present, the selling price is RM450 to RM600 per sq ft.
The Ceriaan Kiara project, currently under construction, is about 30% completed and will be fully finished in 2009.
CIMB-Mapletree is a joint venture between CIMB Real Estate Sdn Bhd, a wholly owned subsidiary of CIMB Group, and Mapletree Capital Management Pte Ltd, a wholly owned unit of Mapletree Investments Pte Ltd.
Mapletree Investments, in turn, is wholly owned by Temasek Holdings (Private) Ltd.
Recently, YNH Property appointed Fraser Hospitality Pte Ltd to manage its RM300mil Lot 163 Suites project in Jalan Perak, Kuala Lumpur.
Fraser Hospitality, which is a wholly owned subsidiary of Fraser & Neave Ltd, is an international serviced residence management company providing consultancy and other services.
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