Dubai Investment on the hunt

MALAYSIAN CAPITAL MARKET SUMMIT 2007

DUBAI Investment Group (DIG), which has invested just under US$300 million (RM1 billion) in Malaysia to date, is looking to invest more here and in Asia, its managing director Datuk Amin Rafie Othman said.

Amin: The company is committed to Asia, particularly Southeast Asia

"Our financial year is coming to an end, so we're already seriously looking for our next serious investment. We're in talks with people all the time. We're open to both strategic and passive stakes," he told reporters on the sidelines of the second day of the 12th Malaysian Capital Market Summit yesterday.

DIG particularly likes the property sector in Malaysia at present.

"We like it. There's still potential upside. Relative to our Asian neighbours, property prices are still relatively low in Malaysia," Amin said.

DIG's largest shareholding in property here is a 7 per cent stake in Bolton Bhd.

The group, Amin said, looks for a rate of return of no less than 20 per cent from all its investments.

Asked if Malaysia had provided those kind of returns, he said: "Yes, it depends on valuations and if we came in at the right price, (but) we've on the whole made money in Malaysia," he said.

It mostly holds minority stakes in Malaysia, with few exceptions such as a 40 per cent strategic stake in Bank Islam Malaysia Bhd, for which it paid RM840 million.

"We are committed to Asia, particularly Southeast Asia, and we're on the lookout for good investments," he said.

In Asia, DIG is most heavily invested in Hong Kong and China. The group has no plans to make hostile acquisitions.

"We'd rather not. The key for us is finding good partners that we can work with," Amin said.

By New Straits Times (By Adeline Paul Raj)

REITs offer returns in good and bad times

KUALA LUMPUR: Real estate investment trusts (REITs) remain as the ideal investment in an uncertain economic environment as REITS has low correlation with the equity markets, said Quill Capita Management Sdn Bhd’s chief executive officer Chan Say Yeong yesterday.

“Although REITs value may drop during a financial crisis, you may still get your returns,” Chan said at the 12th Malaysian Capital Market Summit 2007 here yesterday.

Citing the 1997 financial crisis as an example, Chan said most companies were unable to issue dividends for a few years; however, REITs guaranteed returns on investments to investors.

REITs are trust funds that hold or invest in rental properties and are required to distribute most of its profit as dividend to its holders.

Furthermore, Chan said Malaysian REITs (M-REIT) offered attractive yield spread.

He added that M-REIT had a 2.47% yield as end of October, which was higher than Singapore’s REITs (S-REITs) at 1.80% and Japan at 1.91%.

Meanwhile, Axis REIT Managers Bhd chief operating officer George Stewart LaBrooy said REITs could boost and help reduce capital cost.

“REITs create conditions for building an integrated property business and attracting foreign capital,” he said.

LaBrooy added the trust fund could help develop the broader economy and bring in new players, citing S-REITs as an example in attracting established property developers like CapitaLand Ltd and Keppel Land Ltd.

However, LaBrooy said the local REITs industry needed consistent improvement in the regulatory environment and the removal of withholding tax.

He added that REIT dividends should be treated in the same manner as bonds.

“We need to re look at the deregulation of the equity structure of the REIT managers to allow foreign and local participation without restriction,” LaBrooy said.

Going forward, he said: “In the next phase, we will see the introduction of a regulation that will allow REITs to go into development projects that would propel further growth, driven by the higher growth expected from the REITs earnings.”

By The EDGE

KFHMB plans to build Malaysia’s tallest building

KUALA LUMPUR: Kuwait Finance House (Malaysia) Bhd (KFHMB) is teaming up with a local bank to jointly develop the country’s tallest building that will overtake the Petronas Twin Towers.

Its managing director, Datuk K Salman Younis said it would be “a high-end real estate project that will stand taller than the Petronas Twin Towers”.

Speaking to The Edge Financial Daily, he said the JV with the property arm of a local bank had just been approved yesterday, and work on the project would begin next year

Declining to elaborate further on the project, Salman could only say that further announcements on the project would be made soon.

On KFHMB, he said the Islamic banking group planned to open two or three new branches in the Iskandar Development Region (IDR) and Taman Molek in Johor early next year.

Speaking to reporters after hosting a media tutorial on Islamic banking and finance here yesterday, Salman said KFHMB also planned to open branches in Penang and Kuching within three months and to start its marketing efforts in Sabah early next year.

“KFH already has some customers in Sandakan. We plan to build our presence in Sabah,” he said. KFHMB, the first foreign Islamic bank to be licensed by the Ministry of Finance, currently operates two branches in Kuala Lumpur and one in Shah Alam.

In August, KFHMB announced it would jointly develop a 902.4ha land in the IDR with Mubadala Development Co and Millennium Development International Co for RM4.2 billion. This will involve the building of three clusters, namely a lifestyle and leisure cluster, a cultural cluster and a financial district in the IDR’s first integrated international city.

Last week KFHMB had said it would jointly team up with local real estate investor Prestige Scale Sdn Bhd to fund the RM577 million Glomac Tower project in Kuala Lumpur.

Salman had said both companies would be involved in the on-block purchase of the 36-storey class A commercial office block. The project is to start soon and is expected to be completed within two-and-a-half years.

Meanwhile, it was also reported that the Islamic bank was in discussions with investors from Australia, China, Indonesia, Singapore and the Middle East to jointly develop its 252.5ha land in Bandar Nusajaya, near the Johor State New Administrative Centre project in the IDR.

By The EDGE (By Ellina Badri)

Hunza to deliver good results

PETALING JAYA: Hunza Properties Bhd is expected to deliver promising results in the future, thanks to its projects in the luxury sector amid the property boom in Penang, says Kenanga Investment Bank Bhd.

“We expect quicker take-up rates for Infiniti and Gurney Paragon than for typical Penang properties, given the iconic appeal of both projects,” Kenanga said in a report, noting that Infiniti and Gurney Paragon had recorded 22% take-up rates each since their launch in mid-2007.

In addition, there would be more profit recognition and accelerated sales at Ailila in Tanjung Bungah, Penang and Mutiara Seputeh, Kuala Lumpur as these projects neared completion in the third quarter of its financial year ending June 30, 2008 (FY08), it said.

For the first quarter ended Sept 30, Hunza Properties recorded a 62% increase in pre-tax profit to RM18mil, driven mainly by higher profit recognition for Alila and Mutiara Seputeh, which had 85% and 70% take-up rates respectively.

Kenanga said while the RM12mil net profit was below its expectations and accounted for 19% of its FY08 forecast of RM62mil, first-half results “tend to be softer than” the second. It forecast FY09 net profit of RM78mil.

OSK Research Sdn Bhd concurred that Hunza Properties was coming largely in line with its full-year projection, with a year-on-year growth of 86.3% and 66.8% in turnover and net profit respectively in the first quarter.

OSK had forecast Hunza's FY08 turnover and net profit at RM270mil and RM51.3mil respectively.

“With more cash flowing in from its property development projects, Hunza Properties net gearing position has improved further to 0.57 time in the first quarter from 0.67 time in the fourth.

“Hunza Properties has an unbilled sales of RM194mil from its development projects of Alila, phase one of Gurney Paragon and Infiniti, and semi-detached units and bungalows in Mutiara Seputeh,” it added.

CIMB Research said: “We believe the stock should outperform given the upside to our conservative sales and margin assumptions, the entry of reputable partners for Gurney Paragon and the landbank acquisitions,” it said.

Hunza Properties closed at RM2.69 on volume of 298,700 shares.

By The Star (By Shannen Wong)

Good take-up for Indah Residences units

An artist's impression of the Indah Residences link homes

PETALING JAYA: It was an expected quiet week over the Deepavali holidays but Paramount
Property Development Sdn Bhd (Paramount) still managed to achieve its target sales of 20% when it soft launched 284 units of 22 ft by 70 ft link houses. Called Indah Residences, it is Phase 8 of Paramount’s ongoing Kemuning Utama project located in Shah Alam.

Paramount’s sales and marketing manager Chan Jy Mei said the developer decided to go
ahead with the soft launch even though the show unit was not ready as it was the “best time” before the school holidays started. According to Chan, a show unit will be ready before Chinese New Year next year.

With a gross development value (GDV) of RM93.98 million, there will be a total of 429 units
of Indah Residences homes built on 39 acres of freehold land. The remaining units are expected
to be launched in the second quarter of 2008. With a built-up of 2,100 sq ft and priced between
RM308,000 and RM496,411, the units have 4 + 1 bedrooms and 4 bathrooms. Construction has
begun and completion is expected in November 2009.

Paramount’s previous launch, called Indah Elite, is 90% sold since its launch in April. With a
GDV of RM106 million, Indah Elite comprises 335 units of 2-storey terraced homes.

According to Chan, the difference between Indah Elite and Indah Residences is the extra
room the latter offers and its more modern façade. “The slick, sharp and maximum glass opening makes the house instantly recognisable from afar. The façade comprises large glass windows and aluminium louvers to enhance the sense of openness to the outdoors. The façade’s simplicity reflects the modern lifestyle,” she said.

Chan said the developer is targeting young families and those living in USJ and Section 25,
Shah Alam, who are looking to upgrade. The main attraction of Kemuning Utama is its gated and
guarded concept, offering 24-hour security guard patrol, perimeter fencing, CCTV monitoring at the entrance guard house and touch card access.

“To date, Kemuning Utama is almost 70% developed. Our commercial phase, Kemuning
Utama Commercial Centre, will be completed by the end of 2009,” said Chan. The commercial
centre, comprising 175 units of 2-storey and 3- storey shop offices has been sold out.

The 524.7-acre township is divided into two parcels, namely, the KU Eastern Precinct and the
KU Western Precinct in which the Indah Elite and Indah Residences are located. “We have completed KU Eastern Precinct and are now focusing on KU Western Precinct which has a total of 338 acres,” said Chan. The next launch after Indah Residences would be the ninth phase, comprising 2-storey terraced homes to be launched early 2009.

Residential offerings in Kemuning Utama include 2-storey semidees, 2-storey linked
semidees, 2-storey terraced homes and medium to low-cost apartments. To be completed in 2010, the township is accessible via Kesas Highway, New Klang Valley Expressway, North-South Central Link, New Pantai Expressway, Jalan Bukit Kemuning and the proposed Bukit Rimau Interchange.

By theSun (By Yeong Ee Wah)