Growing shortage of materials a main concern for housing industry

Some of the houses in Bandar Saujana Utama

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.

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

A thriving Bandar Saujana Utama

Herbert Leong with a model of Bandar Saujana Utama

BANDAR Saujana Utama in Sungai Buloh has matured into a thriving township with about 6,000 housing units built since the project began in 1995.

Unlike some suburban townships where there are still many vacant houses, Bandar Saujana Utama is more than 90% occupied and now has five precincts called SU1, SU2, SU3, Bukit Saujana and Sungai Buloh Country Resort (SBCR) that were the first to be developed more than a decade ago.

Purchasers who initially bought double-storey terrace houses there for RM90,000 have enjoyed good capital appreciation as new launches are now priced RM230,000 to RM250,000.

In the early 1990s, visitors to the township have to exit the Sungai Buloh toll plaza of the North-South Expressway and drive along Jalan Kepong-Kuala Selangor before reaching SBCR. Visitors have to pass through a narrow road leading to SBCR that was jointly developed by Glomac Bhd and the Farmers' Association of Kuala Selangor.

Today, there is a new access road via the Batu Arang-Shah Alam Highway while the Guthrie Corridor Expressway has also helped to open a new growth corridor.

I recall visiting the resort several times in the past where carnivals and horse-riding shows were held at the equestrian. There was also a small wooden “clubhouse” at the equestrian, some show bungalows and Saujana Utama houses were just being built.

Today, the area is unrecognisable, as the township has blossomed into one of the more desirable places to live in Sungai Buloh.

Although much of the forests and plantations had made way for houses, the country-like ambience is still there. The place is very quiet and breezy.

Over the past decade, several housing estates have mushroomed on both sides of this Batu Arang-Shah Alam Highway. They include Perdana Heights, Alam Budiman, Sunway Alam Suria, Cahaya SPK, Kayangan Heights and Sunway Kayangan.

Opposite this townships are Seri Pristana, a fairly new housing estate, and the 1,000-acre Universiti Teknologi Mara (UiTM) in Puncak Alam that would be a catalyst for the further growth of Sungai Buloh.

Bandar Saujana Utama will benefit from the housing needs and economic activities of the campus.

Phase 1 of the UiTM campus is expected to be completed by 2009 and will house 20,000 students. The expected total student and staff population upon completion is about 50,000. Nearby developments along the Sungai Buloh Road includes the Desa Coalfield (8km away), and Puncak Alam.

Meanwhile, the estimated 30,000 residents (80% Malays, 10% Indians and 8% Chinese) of Bandar Saujana Utama have reasons to be pleased, as they have got their first hypermarket and an upcoming neighbourhood mall in the township.

The 50,000-sq-ft Central Mart hypermarket that initially leased the building from the developer had within a year bought it in April, reflecting its confidence in doing business in the 1,100-acre leasehold township. The SU Mall next to Central Mart is almost completed.

Glomac Bhd general manager (Group A) Herbert Leong said 65% of the 72 retail lots in SU Mall had been sold since sales began 15 months ago. A typical lot size is 40ft by 40ft and is priced from RM270,000 to RM500,000.

“This is the biggest retail complex in the area. The mall is scheduled for completion by August and we hope to get the tenants in by year-end. The Central Mart and Ace Hardware is the only hypermarket within 15km radius,” he said.

The earlier house designs are average looking. However, Glomac is coming up with new designs in Bukit Saujana, a new precinct sited on higher grounds. Bukit Saujana's first phase will have 94 semi-detached houses with 45ft by 80ft units with typical built-up sizes of 2,467sq ft and priced from RM425,000.

Another 87 double-storey terrace houses with 24ft by 70ft and 24ft by 75ft lot sizes and built-up area of 1,845 sq ft and 2,214 sq ft respectively would be priced from RM260,000.

Glomac will also be offering bungalow lots with average area of 8,000 sq ft and an option to build a bungalow with 3,200 sq ft built-up area and priced from RM600,000. There is a new police station, a primary and a secondary school as well as a clubhouse for SBCR residents. A mosque and wet market are in the pipeline.

About 50 bungalows have been built in the gated and guarded SBCR where only 30 of the 550 bungalow lots remained unsold. The 85 double-storey shops and 119 single-storey shops are 85% and 95% occupied.

Glomac Bhd group managing director Datuk F.D. Iskandar F.D. Mansor said Glomac had increased its land bank in the township over the years. “Of the 1,100 acres, we are now left with about 300 acres yet to be developed,” he said.

It has sold about RM900mil worth of properties out of a gross development value of RM1.35bil.

By The Star (by S.C.Cheah)

Piccolo Hotel KL hitting all the right notes

STRATEGIC LOCATION: An artist's impression of the Hotel Piccolo building on Bintang Walk

PICCOLO Hotel Kuala Lumpur may have set a new benchmark for new four-star hotels in the city centre by filling up half of its available rooms and achieving RM255 in average room rate (ARR) in just a month after its opening.

At the current pace its business is going, the hotel expects to break even within two years.

The hotel, formerly Wisma Peladang, is owned and managed by Absolute Prestige Sdn Bhd, which has taken a 60-year lease on the building beginning 2002. Berjaya Land recently acquired a 51 per cent stake in Absolute Prestige.

The leased structure includes the hotel and a commercial component. An annexe tower comprising 70 rooms will be ready next year. The cost of all the components is RM70 million and RM45 million for the lease.

"We have achieved RM255 in ARR and 50 per cent occupancy based on available rooms. A huge portion are walk-in guests," Absolute Prestige executive director Suzianna Wong-Svrcula told Business Times in an interview.


MARINE INSPIRED: Wong-Svrcula in one of the rooms. The hotel strives to be as environmentally friendly and energy-efficient as possible

The hotel opened in mid-April with 60 rooms and was supposed to open the remaining 108 rooms in June.

"In the first year of operations, we are targeting RM250++ (in ARR) and an average occupancy of 50 per cent," Wong-Svrcula said.

"We target to break even in the second year with 70 per cent average occupancy and an ARR of RM280 to RM300 per night," she added.

The projections are achievable, given Piccolo Hotel's strategic location on Bintang Walk and its focus on room operations only. The retail space, spa and restaurants of the building are not operated by the hotel.

The hotel's tagline is "Dive Into Pleasure", based on its theme of marine life.

The carpeting in the hotel carries the anemone design, while the curtains has a shimmer which look like moving water.

Each room displays pictures of the underwater world and photographs are hung on the walls along the corridors, creating the the impression of walking through an art gallery.

This marine-inspired hotel strives to be environmentally friendly and energy efficient.

Hot water is produced through heat exchange generated from the air-conditioners and the hotel's power supply uses high-tension power which helps save up to 28 per cent in rates.

In fact, the hotel has no swimming pool as it considers that a waste of resources.

Whatever is saved on laundry - sheets not changed for those who stay more than one day - is donated to the "Safe Our Seahorses" and "Reef Check Malaysia" programmes.

Piccolo Hotel is also planning to make its working environment as paperless as possible.

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

Y&Y development promises value

PROPERTY developer Y&Y Property Development Sdn Bhd is positioning its latest commercial development project, Shamelin Heights, as a value-for-money offering for business operators.

The group has invested some RM110 million in the development, which offers an opportunity for businesses to operate on bigger premises in a strategic location, yet at affordable rental rates.

Shamelin Heights offers 31 exclusive bungalows from 8,500 sq ft onwards, with a rentals starting from RM18,800 per month.

Targeted at light industrial business owners, Shamelin Heights is suitable for tenants to place their warehouse, gallery, research and development centre, service centre or healthcare centre, Y&Y Property project consultant Billy Tan said


TAN: Shamelin Heights is built to accommodate market demand for bigger business premises at affordable rents and located in the heart of Kuala Lumpur

"The development is built to accommodate market demand for bigger business premises at affordable rents and located in the heart of Kuala Lumpur," he said in a statement.

Tan said that under its "build-for-lease" concept, Shamelin Heights tenants can maximise profits by focusing on their businesses as the developer will take care of the maintenance and management of the premises.

By New Straits Times

Glomac gears up for challenges ahead

GLOMAC Bhd has, over the past 20 years, emerged from a mere township developer to become a niche, high-end property player.

The recent en bloc sale of its 40-storey Glomac Tower for RM577mil (a record breaking RM1,120 per sq ft), is another outstanding achievement for the Bursa Malaysia main board company.

Group managing director Datuk F.D. Iskandar F.D. Mansor said while going for more niche projects in the Klang Valley, Glomac was constantly improving its traditional mixed housing projects.

Datuk F.D. Iskandar F.D. Mansor

For example, the company has introduced a Balinese theme with Balinese style garden and pavilion by a lake for its 350-acre Saujana Rawang (next to Bandar Country Homes) and has generously landscaped the 450-acre Sri Saujana in Ulu Tiram, Johor.

Iskandar is passionate about Bandar Saujana Utama in Sungai Buloh, Selangor. It is this early flagship project that has positioned Glomac as one of the key pioneer players in Sungai Buloh's development in the mid 1990s.

“Moving forward, we would like to bring more amenities to Bandar Saujana Utama, which has within 10 years transformed from a God forsaken place into a very affordable and family-orientated place to live. It has become a thriving township with amenities and facilities.

“We're proud to develop this township which will have 9,000 mixed units. It is two-thirds completed and the houses are 93% occupied,” he told StarBiz.

He recalled how the company started off with the Sungai Buloh Country Resort (SBCR) that is now part of Bandar Saujana Utama. Bungalow lots were sold for only RM18 per sq ft then. Prices now hover around RM25 to RM28 per sq ft.

He said the equestrian project at SBCR had been scaled down and privatised to an operator that conducted horse-riding lessons.

Iskandar said the township had a new precinct, the 43-acre Bukit Saujana, where it planned to launch terraced (1,860-sq-ft built-up) and semi-detached houses (2,500 sq ft) tagged at a bumiputra price of RM238,000/RM248,000 and RM428,000/RM438,000 respectively.

“We're working with the Government to have more schools there. At present, many children from other areas come to study at our secondary and primary schools,” he said.

Meanwhile, Glomac, like all property development companies, are affected by the big jump in oil prices, inflation and rising construction costs. It is bracing for the worst.

“It's either we increase the prices of our products or reduce the built-up area. All our margins will be wiped out if we continue selling our 22ft by 75ft terraced houses at RM180,000 in Bandar Saujana Utama.

“Steel price was below RM2,000 per tonne less than a year ago. It has now gone up to RM4,000 per tonne and we will be lucky if we have enough supply,” he added.

It is understood that it would be inevitable for the company to raise house prices and also to give smaller built-up area for certain products.

However, Iskandar realises that he has to tread carefully with suburban township projects like Bandar Saujana Utama where the buyers are more price sensitive.

On its Sri Saujana in Johor, Iskandar said the township began in 1999 and was a third completed. It has sold RM400mil out of RM600mil worth of properties.

“We are facing a more challenging market in Johor. House prices in Johor are not going up as fast as those in the Klang Valley.

'There are about 50,000 Malaysians working in Singapore and many of them buy houses in Johor,” he noted, adding that the recent slowdown in Singapore had also affected market sentiments in Johor.

“However, Johor is slowly recovering and hopefully, the Iskandar Malaysia will spur further economic growth,” he added.

On its latest project the Glomac Damansara, Iskandar said it would be launched soon. The seven-acre freehold commercial-cum-residential development would have a gross development value of about RM600mil. It will comprise shop offices, serviced apartments, a small mall and an office tower.

“We will be launching the shop offices first. We bought the land about a year ago,” he said.

Its Sri Bangi gated project in Section 8, Bandar Baru Bangi, has also done well with all 63 units of shop offices sold within two weeks of launch in March. However, in view of the current market uncertainty, the launch of 230 terraced houses has been delayed.

“We will wait and see until prices stabilise,” said Iskandar.

Glomac currently has 10 ongoing projects and should have 14 projects worth RM3.3bil by end of this year.

However, it may review further launches if fuel prices and other costs continue to soar. Its focus is on smaller pockets of prime land for niche projects that have a fast turn-around and yield better returns for its shareholders.

Glomac has constantly been re-inventing itself through innovative products as seen in new projects such as the Plaza Kelana Jaya (newly completed and built next to a lake with large central courtyard), Plaza Glomac, Glomac Galleria (shop offices priced RM3.8mil to RM4.5mil) in Sri Hartamas and Menara Glomac.

Its successful upmarket residential projects like Suria Stonor and Suria Residen have set new benchmarks in quality and pricing. For example, Suria Stonor's initial price of RM650 per sq ft in 2005 has now breached RM1,300 per sq ft and is still rising.

“We hope to do slightly better than last year. We were still okay late last year. The challenges started from April this year,” said Iskandar.

By The Star - StarBiz - (by S.C.Cheah)

Cyberview: More jobs in the pipeline

CYBERVIEW Sdn Bhd, which has four contracts in hand in Cyberjaya worth in excess of RM200 million, is eyeing more jobs, said managing director Redza Rafiq.

"A few local and foreign information technology firms have expressed interest to move to Cyberjaya. Discussions are still in initial stages. We are planning to design and construct buildings for them according to their specific requirements," Redza told Business Times.

"We have 100.8ha in our pockets ready for development. The areas are suitable to build data centres and for high-impact companies to operate from," he added.

Cyberview is currently building a global delivery campus for Satyam Computer Services Ltd, a leading global consulting and information technology services provider, for RM100 million.

Its other contracts are to build a knowledge workers' development institute for the nation, a four-storey data centre for a prominent local firm, and park-and-ride facilities to improve the transportation system in Cyberjaya.

"Satyam is planning to relocate from its existing premises to a bigger space. We are building the campus in two phases. The first phase will be completed by September and the second, by March next year," said Redza.

The building of the 300,000 sq ft data centre, meanwhile, is part of the company's programme to encourage local firms to do business in Cyberjaya.

The data centre will be operational by year-end. Redza, however, declined to identify the company.

It is learnt that the data centre is being constructed for E-Basis Bay Sdn Bhd, a unit of technology services and hardware solutions vendor Basis Bay Group.

By New Straits Times

Cyberview to launch housing project in August

CYBERVIEW Sdn Bhd, a government-linked entity mandated to spearhead the development of Cyberjaya, will launch its flagship housing project, myHome@Cyberjaya, for more than RM150 million by August.

It will build 1,000 units of affordable apartments, double-storey houses and two- and three-storey shopoffices in two phases over a span of four years to cater to the needs of the Cyberjaya knowledge workers.

Managing director Redza Rafiq told Business Times in an interview that the apartments and houses will be priced from RM88,000 to RM168,000 respectively, while pricing for the shop-offices is still being planned.


REDZA: Cyberview together with the other major stakeholders of Cyberjaya are all hard at work to ensure Cyberjaya's position is firmly entrenched in the global ICT map

"The 11.63ha myHome@Cyberjaya project will be our first residential development. All the units will be uniquely designed by award-winning architects. As the development progresses, we will invest in new projects to build corporate buildings suited to clients' specific requirements. We will also construct international schools," Redza said.

The main objective of Cyberview is to ensure that the development of Cyberjaya adheres the government's guidelines and aspirations and to advise it on Multimedia Super Corridor/Cyberjaya development matters.

It has 100.8ha in its pockets, of which less than 32ha have been utilised or are being developed.

The land was given up by Setia Haruman Sdn Bhd, the master developer of Cyberjaya, under a revamp exercise.

In 1999, Cyberview signed a development agreement with Setia Haruman granting it the right to develop 2,832ha in Cyberjaya as the master developer in exchange for 8.5 per cent return on equity, while Cyberview became the landowner.

By 2002, the development model became unsustainable and had to be restructured.

Cyberview was asked to come in by the government to save the Cyberjaya project from being derailed due to Setia Haruman's high gearing and its inability to service its obligations to the tune of RM3 billion.

Cyberview had taken over a substantial portion of the obligations and helmed the restructuring exercise for the project, which phased the remaining amount to give Setia Haruman breathing space and to ensure the development of Cyberjaya will be continued.

The exercise was concluded in May 2006. Under the exercise, Setia Haruman gave up its sale and development rights over a 101ha tract of land to Cyberview for RM500 million.

Initially, Setia Haruman was equally held by UEM World Bhd, Country Heights Holdings Bhd (CHHB), Landmarks Bhd and Tan Sri Mustapha Kamal Abu Bakar's Emkay Group.

In 2004, Mustapha Kamal bought over the shares from CHHB and Landmarks for RM100 million cash resulting in Emkay gaining 75 per cent control over Setia Haruman. UEM holds 25 per cent.

"With the restructuring exercise, Cyberjaya was able to move forward again and now houses more than 400 local and foreign corporations. The amount of office space is expected to breach the five million sq ft mark before the end of 2010, from 3.7 million sq ft currently," said Redza.

Emkay, which is one of the bigger private developers in Cyberjaya, will alone offer 3.5 million sq ft of office space by 2011.

"Cyberview, together with the other major stakeholders of Cyberjaya such as Multimedia Development Corp (MDeC), Majlis Perbandaran Sepang and Setia Haruman, are all hard at work to ensure Cyberjaya's position is firmly entrenched in the global ICT map," added Redza.

By New Straits Times (by Sharen Kaur)

Piccolo operator plans to set up boutique hotel chain

The owner and operator of the Piccolo Hotel Kuala Lumpur, Absolute Prestige Sdn Bhd, plans to establish a boutique hotel chain in Malaysia.

The proposition is ambitious given that its Piccolo Hotel on Jalan Bukit Bintang is only two months old and the company's maiden foray into the hotel industry.

Nevetheless, realising its goal may not be too far off as Absolute Prestige has already been approached by other property owners who are keen to replicate its hotel model nationwide.

Piccolo Hotel not only showcases marine life and conservation in the hotel, but also strives to be as environmentally-friendly as possible.

"We are talking to parties and looking at the location. These are people who have existing properties that we can take over (and convert to hotels) around the country," Absolute Prestige executive director Suzianna Wong-Svrcula said.

"We want to share the beauty of the marine world and about conservation," she said, indicating that she would like to have a hotel in Kota Kinabalu, Sabah.

Should anything materialise, she expects it to be in 2009/2010.

"We believe we have an exciting product and hope to replicate it," she said.

In 2001, Absolute Prestige paid RM45mil for a 60-year lease on the 13-storey Wisma Peladang to turn it into a boutique hotel.

By New Straits Times

Upmarket challenge for Bolton

Chan posing in front of a Tijani home.

FOR decades, Kenny Hills has been known to be the home of the rich and famous. Be they corporate leaders, politicians, members of the royal families or someone with heaps of money, Kenny Hills drew them with her meandering tree-lined roads and mosquito-filled slopes.

But the community who lived there also treasured and protected what they have with passion. And because they had influence and power, Kenny Hills continued to remain green.

Several years ago, residents of Kenny Hills were up in arms when they discovered that certain parts of their beloved neighbourhood in Jalan Langgak Tunku would come under the bulldozer. Their concerns were natural as Kenny Hills, one of the most up-market residential urban living in the city, is also the last of the green bastion of modern city living.

Having a home here is equivalent to having arrived. There is nothing to upgrade to. With a benchmark as challenging as this, what can any developer offer that will appease the current community and at the same time, appeal to new buyers?

This challenge was presented to Bolton Bhd when it became one of the largest land owners there with 42 acres in the late 1990s.

Says Bolton executive director Chan Wing Kwong: “Kenny Hills is like a gentleman’s club. How exclusive can any developer be?”

It was a challenge they decided to take up. They took a second look at their plans, which at that time, was to be a high dense commercial, retail and residential area.

“We decided to adopt a more seamless approach, taking into consideration the current community. If anyone were to buy, our first catchment would be the community here,” says Chan.

Hence the governing rule was to consider the wishes of the community. The second thing they did was branding. Bolton had previously done two other high-end projects in the city, but nothing of this scale. That was when Bolton decided to put greater emphasis on branding. That led to the birth of the Tijani (crown in Arabic) brand. Bolton plans to use the brand Tijani for their upmarket projects across the country, eventually.

Says Chan: “We decided to focus on long-term value.”

Because Kenny Hills was like a gentleman’s club comprising the rich and their sons and daughters, relationships matter.

There is the old rich who made their money by the sweat of their brow. At least their fathers did. Now that they have their third generation, they too want their children to live close by. But the young rich did not want the cumbersome duties of having to look after a home on half an acre. (That’s the land area of some of the properties there).

That was when Bolton came up with a 3-in-1 strategy – the natural, modern tropical and modern minimalist – to meet the needs and demands of the community they were targeting.

Tijani 1, comprising 33 vacant lots, took on a natural theme. Its entrance was understated with lots of greens and land area between 13,000 and 54,000 sq ft (more than an acre).

A small house on a large piece of land – the definition of Kenny Hills homes and this was what the community lived by.

Bolton was targeting an audience who is used to living on large pieces of land. When Tijani 2 South came about, the concept changed to appeal to a community who wanted to downsize but who nevertheless, wanted an oasis of green to remain. Forty-four semi-detached homes were introduced in this modern tropical setting.

Needs and wants change with the season but some basic needs have to be respected. With emphasis on that, Tijani 2 North, with its 70 units of low-rise duplexes and 84 units of condominiums, was launched in 2005.

(Bolton will launch its low-rise block of eight storeys comprising 28 units before the end of the year at between RM1,000 and RM1,200 per sq ft in Tijani 2 North. There will be a Tijani 3 later on, which comprises 100 odd units of condominiums. Tijani 2 North was launched in 2005 at RM650 psf.)

“We are now appealing to the youngest generation. They may be buying with their own money, their father’s or grandfather’s money. They don’t want to maintain the grounds, they want to enjoy life and socialise. They are adventurous and don’t mind mixing with the neighbourhood. So we provide them with a clubhouse and other facilities,” says Chan.

Looking back, he says the single factor that gel this 3-in-1 strategy is relationships.

“Location, quality and being green are important but above all these lie the importance of relationships. But having said that, 30% of our buyers were foreigners. They know they cannot go wrong with this location.”

By The Star (by Thean Lee Cheng)

Construction sector seen as main loser

PETALING JAYA: The mid-term review of the Ninth Malaysia Plan (9MP) reveals that the construction sector appears to be the main loser due to cutback in spending.

CIMB Research in an update report said the review was neutral on most sectors as there were no strong commitments to spend on them.

“Food and beverage, oil and gas and building materials (sectors) were marginal winners,” it said.

A woman walking past a poster in George Town. The removal of both the Penang Monorail and Penang Outer Ring Road projects from the 9MP allocation was negative for the construction sector.

CIMB Research said the RM30bil increase in development expenditure to RM230bil was positive over the next 12 months for the building material sector, as part of the expenditure would address rising cost of materials.

“However, in the longer term, the outlook for building material demand is less optimistic given the reduction in construction spending,” it added.

The removal of both the RM2bil Penang monorail and RM1.5bil Penang Outer Ring Road project from the 9MP allocation was negative for the sector and outweighed the potential positives arising from the additional development budget, the research house noted.

CIMB Research remains “overweight” on the oil and gas sector due to the current overriding demand for energy but is “neutral” for the plantation sector.

“The Government's policy of expanding arable land and increasing food production, in view of the global increase in food prices, are expected to have minimal impact on the listed oil palm players in Malaysia,” the report said.

While it maintains its “overweight” rating for the telecommunications sector, CIMB Research has reduced its target price for Telekom Malaysia Bhd as it remains negative on the rate of penetration for the household high-speed broadband project.

“Although continued efforts would be made to push household broadband penetration to 50% by 2010, affordability and demand for such speeds from most residential customers are likely to be limited,” it said.

The research house noted that VADS Bhd and JobStreet Corp Bhd were clear beneficiaries in the technology sector as the review envisaged an increase in exports from Multimedia Supercorridor companies and an increase in information and communications technology (ICT) global players' investments in high-valued outsourcing.

“On VADS' part, it harbours the aspiration of being a local ICT champion while its core divisions should benefit from increased transactional flow from shared service outsourcing. Meanwhile, JobStreet will see a positive impact from the creation of more jobs,” it added.

By The Star (by Laalitha Hunt)

SP Setia to ride out tough times

SP Setia Bhd shares have been under pressure since the release of its latest quarterly results on June 24. Traditionally seen as a safe stock for investment, SP Setia's share price has dropped by more than 15% in just a week and it is now at its lowest level in 52 weeks.

The developer’s net profit fell 19.68% to RM47.99mil for the second quarter ended April 30 mainly due to escalating costs of building materials. Revenue, however, was slightly higher at RM301.5mil.

Despite the weak results, some brokerages are still upbeat on SP Setia's prospects.

Citi Investment Research said that despite weaker-than-expected results, SP Setia's management was still confident of meeting the RM1.5bil new property sales target for the current year ending Oct 31 (FY08).

“SP Setia has already achieved RM951mil sales for the first seven months of FY08 and if the company can maintain its sales of RM100mil per month, it should not be a problem to achieve the RM1.5bil sales target,” the research house said in a report.

It added that the only exception was Vietnam, where the company has a current sales target of about US$10mil for FY08.

“We believe the current sell-down is overdone. Previously, despite a lethargic market, SP Setia has been able to consistently chalk up at least RM1bil annual sales,’’ Citi said. “In our opinion, SP Setia is in a league of its own and would be able to withstand a more challenging environment than most of its peers.”

AmResearch has reiterated its “hold” rating on SP Setia with an unchanged target price of RM3.50 based on a 10% discount to its estimated net asset value per share of RM3.89.

In a recent research report, Kim Eng Securities retained a “buy” on the counter, with a target price of RM3.50. It said the stock offered attractive gross dividend yields of around 6% and that SP Setia had a good track record in delivering its promises.

By The Star (by Leong Hung Yee)

PJD sees brisk sales

KUALA LUMPUR: PJ Development Holdings Bhd (PJD) has sold all 185 serviced apartments in one of two blocks for its Swiss-Garden Residences project.

Executive director Yap Yoon Kong said the 33-storey Tower A was fully sold when the 1.7-acre freehold development at Jalan Galloway, off Jalan Pudu here was launched on May 31.

Yap Yoon Kong (left) and James Chew with a model of the Swiss-Garden Residences.

“We launched the 37-storey Tower B the following weekend and sold about 40% of the 251 units,” he said, adding that buyers were local and foreigners from Hong Kong and Singapore.

Yap said construction work would be stepped up in view of the rising costs. “We have made some adjustments with our contractors who are also committed to ensuring the success of the project,” he told StarBiz.

He said the apartments, priced from RM333,888 for the first block were the only one of its kind in the area and would be managed by the Swiss-Garden International Hotels, Resorts & Inns.

The apartments have built-up areas ranging from 550 to 2,700 sq ft for the penthouse units. Tower A has four layout designs and Tower B seven.

The facilities include 24-hour security, CCTV cameras, access card system to the lifts, squash court, sauna, infinity and wading pool, gymnasium and children’s play area while services include broadband, laundrette and convenience store. There will also be a banquet hall and function rooms.

Slated for completion in April 2011, the project is being developed by Superville Sdn Bhd, a wholly-owned subsidiary of PJD.

Superville general manager James Chew said buyers would get a free parking bay per unit. There will be basement car park and five levels of above ground car park. There will also be a link to the adjacent Swiss-Garden Hotel.

Chew said sales were still moving despite the recent oil price increase. “When we did piling the price of steel was RM1,800 per tonne. It has now gone up to RM4,000 per tonne.”

PJD has several projects in the pipeline. They include the leasehold Sierra Oakleaf in Bukit Antarabangsa here that would be developed on a “build-then-sell” concept. It would comprise 20 semi-detached homes priced around RM2mil each.

The company bought over a project in Jalan Tun Razak a year ago. It plans to build offices and retail units there and hopes to sell it en bloc.

It also has a high-end project called Duta Kingsbury @ Dutamas in Sri Hartamas here where it will build three-storey super-link houses and two blocks of condominiums.

Yap said it has not yet decided on the launch dates of the three projects.

By The Star - StarBiz - (by S.C.Cheah)

Visionary Designers - Pictures courtesy of PAM 2008

A futuristic theatre in Rotterdam designed by Ben Van Berkel.

Are traditional construction material such as timber and stone still relevant in modern buildings and urban development? Global design visionaries Kengo Kuma from Japan and Ben Van Berkel from The Netherlands will offer a peek into futuristic designs at the PAM 2008 architectural convention in KL from July 3-5.

Organised by the Malaysia Institute of Architects (PAM), the annual event which includes the Kuala Lumpur Design Forum (KLDF08), will also have 13 other avant-garde architects and designers presenting their ideas, namely:

* Bjarke Ingels (Denmark)

* Hanif Kara (UK)

* Hou Liang (China)

* Nader Tehrani (USA)

* Rene Tan & Quek Tse Kwang (Singapore)

* Hailim Suh (Korea)

* Voon Wong (Malaysia/UK)

* Dr Tan Loke Mun (Malaysia)

* Shinya Kamuro (Japan)

* Benson Saw (Malaysia/UK)

* John Jong (Malaysia)

*Lewre Lew (Malaysia)

It is expected to attract 1,000 architects and designers from around the region. Regarded as a master in his field, the multiple-award winning architect Kengo Kuma, 54, is best known for his use of timber in a modern way. He was awarded the International Spirit of Nature Wood Architecture Award in 2002. Among his major works include the Kirosan Observatory (1995) and the Stone Museum (2000) for which he received the International Stone Architecture Award in 2001. Since 2001, he has been a professor at the Faculty of Science & Technology, Keio University in Japan. His architectural practice, Kengo Kuma & Associates was established in 1990.

Kengo Kuma

Hanif Kara

In an email interview, Kuma says he favours timber as it is a “light” material and can be “tender, warm and soft” on the human body.

“Every single tree is different and beautifully varied,” explains Kuma, “I commonly use cedar which has a sharp contrast of colours between red and white, and its grain is dynamic. Also, it is more ‘tender’ than other trees.” Other material used by the architect include stones but preferably those found locally.

“Stones produced in the region where the project is taking place. By using the local stone, you can draw out the originality of that particular region, such as Oya Ishi stone of the Tochigi Prefecture in Japan.” Kuma regards the way he makes full use of natural materials as his best achievement as an architect. And “making the architecture transparent”.

Ben Van Berkel is the architect for the Design School in Hong Kong.

He cites traditional Japanese architecture and garden - especially wooden teahouses - as his greatest inspiration. As for design trends in Japan today, Kuma notes that people are paying more attention to the design of ‘small spaces’. “Japanese people have always liked small spaces. If people lose interest in big space or the city, it might mean that the city would lose their energy and momentum.”

And any design that ignores or overlooks its environment can be considered as ugly in his opinion.

The most outstanding design project he has ever seen?

“Venice as a city. The city itself is the result of design, the result of the Venetians’ philosophy.”

An unlikely-looking Frankfurt teahouse designed by Kengo Kuma.

His dream project will be an architectural work built with nature in mind, “as if it is hidden in it”, he says, “The smaller it is, the more it becomes challenging to test our wisdom”.

As for his lecture in Kuala Lumpur, Kuma hope to enable participants to feel and be exposed to the philosophy behind his projects.

At the KLDF 08 preceding the main convention, two key speakers will be Malaysian products designer Benson Saw and his Singaporean partner Voon Wong, a graduate of the Architectural Association in London.

“We intend to share with participants our experiences of how we got started in London and what were the obstacles in being a product designer not just in Malaysia but in Europe,” says Saw, in an email interview.

“When I was working as a design engineer for Motorola, I realised that there are more than just compacting technology into a small apparatus. There were at least 200 engineers and designers involved in bringing a product to end-users. Each one of us had a role in changing how people interact with technology. Subsequently, I enrolled in a post graduate design course and quickly realised how good product design could change a person’s way of life.

“We started doing very small batch productions for European clients. Within a short period of time, we were engaged by some Italian companies and that’s when we started to have a more international audience. We have also recently started our own production of tableware which are distributed world wide.

“Most of our clients are those who wanted something more than just mass produced products. These are people who are highly sensitive to the value of good design.

“The media and press in the West are very encouraging throughout our careers as product designers. Through such exposure, clients who appreciate the language of our design come to us for commissions and collaborations.

Buildings of the future will look like this, if Hanif Kara has his ways.

“Our recently launched tableware were less receptive in Asia as consumers here in general are still not yet drawn to products that are not associated to established brands. We design lamps, lighting installation, furniture and tableware.” And the duo’s proudest achievement to have come out of the Voonwong & Bensonsaw company, was the Loop lamp for Fontana Arte which was short-listed for the prestigious Compasso d’Oro award.

“We came in second to Herzog and de Meuron. However, I think we are most proud of being beaten but these two great architects,” says Saw.

Does KL or Malaysia, offer a conducive environment for the kind of work that they do?

Hanif Kara designed this building as a science centre.

“The low cost of living in Malaysia enables me to experiment with various ideas. In Europe, it will cost too much to get certain ideas onto the prototype level. On the other hand, the number of practising product designers in this country has subsided, hence, it is increasingly difficult to engage good product designers. Most product designers get disillusioned with this profession two or three years after completing their formal education,” explains Saw.

“Product design is very much in its infancy in this region. One needs a lot of perseverance and determination. He or she needs to find his or her own identity and not merely duplicating others. There are a lot of European companies now looking for new ideas from the Far East. The time will come when there will be more designers from this region being recognised on the international level. This will not happen overnight but maybe in 10 years’ time when the designers in Asia have matured.

“It is very challenging to make ends meet being a product designer in Malaysia at this stage as the country is still very manufacturing-based. I do practise consultancy work in interior architecture.

This design project by Voonwong & Bensonsaw is for a private residence in London. It is actually a loft apartment converted from an old school in Kenington.

"From time to time, I do get projects where clients require a one-off product and furniture to be designed specifically for the project. More and more clients are beginning to be aware of the value of such commissioned designs. These kind of projects enable me to think more from a product designer’s point of view.” And what kind of design that he can't stand the sight of?

“The kind of design that make too much of a statement especially about the designer. It should be more about the idea and product not about the designer.”

* For details of the PAM 2008 Convention, log on to www.pam.org.my or call Pusat Binaan Sdn Bhd at 03-26932843.

By the Star (by Johnni Wong)

Bangunan MAS to become hotel, apartment complex

PERMODALAN Nasional Bhd (PNB) plans to redevelop the Bangunan MAS which it bought from Malaysia Airlines (MAS) two years ago, into a hotel and apartments.

President and group chief executive Tan Sri Hamad Kama Piah Che Othman said work is expected to start soon.



"We hope to do it as soon as possible, once we go through all processes and obtain the necessary approvals," he told reporters after a news conference to announce Amanah Saham Nasional 2 income distribution in Kuala Lumpur yesterday.

PNB had bought the 35-storey building located at Jalan Sultan Ismail, Kuala Lumpur, for RM130 million.

The 21-year old building was the former headquarters for the airline.

Hamad Kama Piah said the development cost for the project has yet to be finalised. He also did not say if the new properties would be in the high-end segment.

PNB started to grow its property assets about 10 years ago. Its holdings are made up of office buildings, resorts, serviced apartments, shopping complexes and retail outlets, among others.

Besides Bangunan MAS, other buildings directly owned by PNB in Kuala Lumpur include Menara PNB, PNB Darby Park, Menara Tun Ismail Mohamed Ali, Wisma KPMG and PNB Damansara.

By New Straits Times (by Hamisah Hamid)

Boustead plans non-core assets sale

CONGLOMERATE Boustead Holdings Bhd plans to sell assets that are not part of its core business, as well as those that are not performing to pare debts, its chief said.

The group has business in plantation, banking, property, manufacturing, trading and heavy industries.

It has also started preliminary talks to buy plantation land in Sabah, Sarawak and Peninsular Malaysia, group managing director Tan Sri Lodin Wok Kamaruddin said.

Plans to expand the asset size of its 53.4 per cent owned property trust, Al-Hadharah Boustead REIT, are also on the cards this year.

He said Boustead will trim its gearing to below its shareholders' fund by the year-end through asset sale. A buyout offer for its 65 per cent-owned property unit will boost its gearing ratio to slightly above one.

"Some shareholders were a little concerned about our gearing, since we need to pay a bit for those who opt for cash (in the takeover)," Lodin said in Kuala Lumpur yesterday after securing shareholders' nod to buy out the unit.

Shareholders of Boustead Properties Bhd can opt for RM5.50 cash per share, a share swap into Boustead, or a combination of both. Boustead Holdings may need to spend up to RM400 million if all shareholders take up the cash offer.

It has so far controlled 86 per cent of the property firm, whose shareholders have until an extended July 10 deadline to respond to the offer. It will need at least a 97 per cent acceptance before it can compulsorily buy the rest of the shares.

Datuk Ghazali Mohd Ali, the group divisional director for property, said its property developments may generate another RM500 million salesfor the rest of this financial year. This will likely come from the sale of condominiums in Mutiara Damansara and some corporate lots, he said.

The property division generally sells about 600 to 700 units each year and it has done half of the amount so far this year.

The flagship developments of Boustead Properties include the Mutiara Damansara in Selangor and Mutiara Rini in Johor.

By New Straits Times (by Chong Pooi Koon)

Credit Suisse cuts rating on Malaysia property mart

CREDIT Suisse has cut its rating on Malaysia's property market in anticipation of slower property purchases as higher fuel and power prices, as well as political uncertainty, eat into consumer confidence.

The foreign investment bank said in a research report yesterday that it cut its rating to "market weight" from "overweight" before.

"We are reducing it, primarily because we believe that consumer sentiment will be hit by rising inflation and political "noise", which will result in potential house buyers holding back," it said.

Consumer sentiment historically takes a severe beating during the quarter in which there is a petrol price hike, it noted.

Rising building material prices will also result in higher house prices, thus hurting affordability.

Affordability should, how-ever, improve in the medium term when Malaysians adapt to the rising inflation, and as wages adjust, it said.

"In the short term, we expect a stalemate; property transactions will likely dry up as developers hold back launching projects, while buyers take a wait-and-see attitude," it said.

Credit Suisse believes that developers that have diversified landbanks, hands-on management and a broad product mix will fare better during this slow period, citing SP Setia and IOI Properties as examples.

Building owners such as KLCC Property Holdings, IGB Corp or property trusts, should see their property prices appreciating, it said.

SP Setia, considered a bellwhether of Malaysia's property market, was one of the biggest losers on the stock market yesterday after it reported second quarter earnings that came in below market expectations.

This was because of margin pressure arising from higher construction, marketing and funding costs.

Credit Suisse and Merrill Lynch both downgraded their recommendation on the stock to "neutral" and "underperform" respectively.

"These margin pressures are not one-off events and will likely continue to have an impact on earnings going forward," said Merrill Lynch, in a report yesterday.

"While we are firm believers in SP Setia, we think its stock price is unlikely to outperform given the uncertain domestic outlook," it added.

The stock closed 22 sen, or 6.3 per cent, lower to RM3.28, making it the day's fourth biggest loser on the stock market yesterday.

By New Straits Times (by Adeline Paul Raj)

Dolomite sees gain from highway, housing projects

DOLOMITE Corp Bhd, a construction and property development firm, expects to gain from the execution of projects such as Kemuning-Shah Alam Expressway and Kesas Highway Extension as well as housing projects now under construction.

Its chairman, Tan Sri Mohd Jamil Johari, said the continued uptrend in the construction sector, underpinned by ongoing implementations of the Ninth Malaysia Plan, has provided opportunities for the group’s building materials division in the Klang Valley.

The quarrying and trading division showed a satisfactory improvement during the financial year under review, he said. The group is operating two granite quarries located in Hulu Langat, Selangor, and Bentong, Pahang.

“While competition in local construction industry is intensifying, Dolomite has not relaxed in its effort to improve its order book. The group will leverage on the high volume of construction activities rolled out under the Ninth Malaysia Plan,” he told reporters after the company’s annual general meeting in Kuala Lumpur yesterday.

The group’s construction division will continue to bid for civil engineering and building works called by government agencies and the private sector, Mohd Jamil said.

On the group’s property development, Mohd Jamil said its proposed mixed development project in Kuala Kuantan, Pahang, measuring 3,085,893 sq metres, is due to begin in the third quarter of 2008. Its proposed residential development scheme near Templer’s Park, Selangor, is expected to start next year.

For the financial year ended December 31, 2007, the group posted a revenue of RM160.64 million, up 12.94 per cent from RM142.23 million recorded in the previous year.

It posted a pre-tax profit of RM0.37 million from a loss of RM6.86 million previously.

By Bernama

CapitaLand buys 62pc of Sungei Wang's retail area

The Singapore-based CapitaLand Ltd has bought 62 per cent of the retail area at Sungei Wang Plaza for RM595 million.

The purchase covers 510,418 million sq ft retail area and parking bays at the mall, which enjoys close to 100 per cent occupancy and more than 24 million visitors annually.

CapitaLand, which is also the largest real estate company in Southeast Asia, had undertaken an asset securitisation structure for the purpose, which its spokesperson said was the most suitable platform at the moment.

"This asset base structure the company has decided upon is the most optimum capital structure for the purpose," the spokesperson told Business Timess yesterday.

The mall is held by a special purpose vehicle, Vast Winners Sdn Bhd, which has issued three tranches of senior medium- term notes and a tranche of subordinated Class D medium- term notes.

Under the exercise, CapitaLand subsidiary Gain 888 Investments Pte Ltd has fully subscribed to the subordinated Class D medium-term notes, worth about RM338 million, which are under equity bond.

The remaining Class A, B and C medium-term notes, which fall under debt, are undertaken by a Malaysian financial institution.

Commenting on the acquisition, chief executive officer Pua Seck Guan said the purchase puts CapitaLand's plan to create a Malaysian retail real estate investment trust (REIT) this year on track.

CapitaLand had earlier bought Gurney Plaza in Penang and Mines Shopping Fair in Seri Kembangan, near Kuala Lumpur. Collectively, the three assets amount to approximately RM2 billion.

"Through our proactive management and by leveraging on our retail real estate management expertise, there are tenancy remixing opportunities to create significant value at Sungei Wang," Pua said in a statement.

Last year, Landmarks Bhd sold Sungei Wang Plaza for RM284.8 million cash to Kencana Property Management Sdn Bhd, which is 70 per cent owned by Abdul Jaliludin Jamalludin and 30 per cent by Simon Wee Howe Yew.

Opened in 1977, the eleven-storey mall has over 824,000 sq ft retail area, more than 800 retail outlets and 1,300 parking bays.

By New Straits Times (by Zurinna Raja Adam)

CapitaLand buys 62% of Sungei Wang Plaza

PETALING JAYA: Singapore-listed CapitaLand Ltd has acquired 61.9% of Sungei Wang Plaza, a popular retail mall sited within the Bukit Bintang shopping precinct, for RM595mil.

The acquisition is the third by CapitaLand, which is planning to set up a pure-play Malaysian retail real estate investment trust (REIT) by the year-end.

StarBiz reported on May 17 that Sungei Wang was attracting the attention of investors that included CapitaLand.

In a statement yesterday, CapitaLand Retail Ltd chief executive officer Pua Seck Gun said that together with the earlier acquisitions of Gurney Plaza and Mines Shopping Fair, the three seed assets collectively amounted to an asset size of about RM2bil.

This would put CapitaLand “firmly on track to create its proposed pure-play Malaysian retail REIT by end-2008”, he said.

CapitaLand said it would pay RM595mil for 61.9% of the total retail strata area, or 510,418 sq ft, as well as car parks of Sungei Wang through an asset securitisation structure.

Under the asset securitisation structure, Sungei Wang will be held by special-purpose vehicle Vast Winners Sdn Bhd, which has issued three tranches of senior medium-term notes, namely class A, B and C, as well as a tranche of subordinated class D medium-term notes.

CapitaLand unit Gain 888 Investment Pte Ltd has fully subscribed to the subordinated class D medium-term notes in the principal amount of RM338mil.

The senior medium-term notes are fully subscribed by a Malaysian financial institution.

“Through our proactive management and by leveraging on our retail real estate management expertise, there are tenancy remixing opportunities to create significant value at Sungei Wang,” Pua said.

Sungei Wang has almost 100% occupancy and draws more than 24 million visitors a year. The 11-storey mall, built in 1977 by Tan Sri Chong Kok Lim, has over 800 retail outlets and 1,300 carparking lots.

By The Star (by Izwan Idris)

Housing in US set to recover

AMIDST all the doom and gloom so prevalent nowadays, it is very easy to lose one’s sense of perspective.

After reading all the bearish news and high-profile bearish forecasts, one can easily become convinced that the world or the economy is coming to an end.

Fortunately or unfortunately, there are independent folks out there like i Capital who look at the situation objectively, instead of with hidden agenda.

Since the subprime issue broke out in August 2007, i Capital has stuck its neck out again and again, by saying that the global and US economies are still in fine shape. It has been maintaining that the subprime problem is a containable problem. Period.

Even though Greenspan, Buffett, Soros, etc. have all said otherwise many times, data point to the fact that the US economy was not in recession in 2007 and will not be in a recession in 2008, simply because the global economy has decoupled from the US economy.

And the rest of the world, with more than six billion people, is pulling the US economy out of its housing rut.

The latest ISM manufacturing indicator for May showed a US economy that is still very resilient and an important reason for this is strong and sustained export growth.

To understand what is going on in the US economy, understand the i Capital Long Boom.

Besides the strong exports, one should not overlook the fact that the US housing starts and sales cannot go to zero.

With more than three million extra people every year, the US economy needs plenty of houses and the current US housing contraction is only a temporary and not a permanent trend.

After more than two years of steep decline and with house prices dropping as well, houses are getting more affordable.

If there is only one piece of advice that i Capital would like to give in the current turbulent environment, it would be that the US housing contraction is coming close to its end.

As advised previously, the current US economy is not like the Japanese economy of the 1990s. If the US housing contraction is really close to its end, this would have major implications for the US economy in 2008 and 2009.

It would imply that US gross domestic product growth in 2008 and 2009 would be higher than what most have forecast and in the process, surprise folks like Buffett, Greenspan, Soros, etc. who had made bold, highly publicised forecasts of a US recession or financial crisis.

The chart shows that the housing sector has been weighing down the US economy for more than two years or nine quarters in a row.

As the US economy escapes recession in 2008, courtesy of the China-led economic block, and as consumers regain some sense of composure, the US housing sector would see a bottoming in sales and then an eventual recovery.

For now, it does not matter whether the recovery is V or U-shaped. What matters is that the US economy would end 2008 with solid positive growth, in contrast to the generally pessimistic views.

By The Star / By Capital Talk (www.icapital.biz)

Builders seek longer construction hours

MASTER Builders Association of Malaysia (MBAM) is appealing to the Kuala Lumpur City Hall for longer working hours at construction sites in the capital city to prevent project delays.

In a statement, MBAM secretary general Yap Yoke Keong said contractors need longer working hours at non-residential areas to facilitate smoother delivery of steel bars, concrete, sand, bricks and other building materials to construction sites in the city centre.

MBAM is the umbrella body representing some 600 contractors throughout the country.

Yap said extension of construction activities beyond the current 6pm to 10pm would indirectly help ease traffic in the city centre during the day time.

"If work is allowed after 6pm, delivery of building materials can be planned to run in the night, thus relieving congestion in the city centre during office hours," he said.

He said the current restriction on working hours is not helping contractors who are striving to finish their projects within schedule, fearing which they would be slapped with heavy penalties for late delivery.

Another significant justification for longer working hours is the time-consuming nature of concrete casting for high rises.

"Concrete casting must be executed continuously, in one sequence, to achieve the structural strength that it is designed for," Yap said.

Following MBAM's dialogue with Kuala Lumpur City Hall director general on June 9 2008, Yap is hopeful of a faster approval process.

"We're thankful to City Hall for considering to shorten approval time to within two weeks after the submission of the application," he said.

By New Straits Times

UEM to sign new 2nd Penang bridge pact

UEM Group, together with its Chinese partner, expects to sign a new agreement to build the second Penang bridge next month, its top executives said.

The new contract will cap the project's total cost at RM4.3 billion but the UEM-China Harbour Engineering Co Ltd consortium can claim extra expenses from fluctuating material costs, they said.

The new deal follows the government's decision to allow for an open tender of the bridge's toll concession, amid rising costs due to soaring energy and commodity prices worldwide. The move reversed the original plan to let UEM, via subsidiary UEM Builders Bhd, manage the concession once the bridge is completed.

"The (new) contract agreement has been finalised and we hope to sign it soon," group chairman Tan Sri Dr Ahmad Tajuddin Ali said.

Tajuddin and managing director Datuk Ahmad Pardas Senin said the group was managing the construction cost partly through forward- and pre-buying of key materials like steel and cement.

They said the group was well poised to bid for the toll concession when the time comes. UEM is bullish about its chances, given its experience and expertise in highway and toll operation and maintenance locally and abroad.

Tajuddin and Ahmad Pardas were speaking at a press conference after UEM World Bhd's annual general meeting in Kuala Lumpur yesterday.

Ahmad Pardas, who is also group chief executive officer, said the bridge's design had been tweaked with some "esthetic changes" but the alignment remains as in the original plan.

Tajuddin, meanwhile, said the listing of the group's property arm, UEM Land Bhd, is expected to take place in early November. The listing is part of the UEM group's restructuring announced in February this year.

The planned capital repayment to UEM group shareholders, another key component of the restructuring, should be made by the third quarter, he added.

On revenue growth this year, Ahmad Pardas said the target set under its KPI (key performance indicator) is achievable despite a more challenging business and economic environment.

He added that construction, engineering, healthcare and property divisions would continue to contribute significantly to the company's performance.

UEM announced recently a 13 per cent growth each in revenue and return on equity under its KPI targets for the year ending December 2008.

Last year, the group's revenue grew 46 per cent to nearly RM7 billion, although the growth is still short of its targeted 65 per cent under its KPI. Group net profit rose fourfold to RM939.2 million from RM194.9 million previously.

The performance was largely due to major land sales in Nusajaya in Johor, the benefits from the dilution of its investment in Costain plc and a gain of the listing of Opus International Consultants Ltd in New Zealand.

By New Straits Times (by Zuraimi Abdullah)

I-Berhad to deliver 1st phase of office suites

I-BERHAD is ready to deliver the first phase of its cybercentre office suites, a RM2 billion information and communications technology-enabled development in i-City.

In a statement in Kuala Lumpur yesterday, deputy chief executive officer, Lim Boon Siong, said the first phase, which consisted of 44 units of office suites, was targeted at Multimedia Super Corridor and knowledge companies.

“The tenants are expected to be fully operational by September this year,” he said.

Lim said the second phase, which would consist of data centre and 34 units of office suites, would be ready for occupancy by year-end and mid-2009 respectively.

Meanwhile, I-Berhad said groundwork for the shopping mall was scheduled to start in September.

“It will have cosmopolitan lifestyle outlets to cater to the needs of the i-City community,” it said.

By Bernama

UMLand to launch high-end projects in KL

UNITED Malayan Land Bhd (UMLand) expects to launch another two high-end development projects within Kuala Lumpur city centre after the soft launch of Suasana Bangsar last April.

Its group chief executive officer, Anthony Yap, said the combined gross development value of all three niche projects was in excess of RM1.5 billion.

“Suasana Bangsar, a 190-unit freehold condominium, offers a choice of two-, three- and four-bedroom suites ranging from 1,112 to 2,200 sq ft each.

“Priced from only RM550 per sq ft, the RM185 million project was well-received at the soft launch,” he told a media briefing after the company’s annual general meeting in Kuala Lumpur yesterday.

Yap said in the second half of 2008, UMLand would develop a 34-storey 310 units of serviced residences on a 0.6-hectare site nestled within the serene enclave of Bukit Ceylon.

He said in early 2009, UMLand would also be developing a premium luxury low-density residences with townhouses and condominiums housed in two 45-storey towers on a 1.72ha site near the Petronas Twin Towers.

“This is a 50:50 joint venture project with Bolton Bhd. Given the attractive locations and development potential of these projects, they are expected to contribute positively to future earnings of the group,” he said.

He said the group has acquired two parcels of freehold commercial land in Johor Baru Central Business District and Golden Triangle of Kuala Lumpur for RM27 million and RM9 million respectively.

“The proposed developments for both land parcels comprise a mix of commercial and residential uses,” he said.

Group net profit for the financial year ended Dec 31, 2007 rose by 16 per cent to RM46.6 million on the back of RM396.8 million in revenue.

“Year on year revenue declined marginally from RM416.6 million in the preceding financial year due to lower revenue recognition from our Suasana Sentral Loft condominium project which tapered off in 2007 and was subsequently completed at the end of the financial year,” he said.

By Bernama

Pasdec to develop tourism-related project

PROPERTY developer Pasdec Holdings Bhd will go into tourism-related development projects in Bukit Tinggi near Bentong, Pahang.

Its chairman Datuk Seri Adnan Yaakob said this follows the acquisition of a 70 per cent stake in Bentong Aquarium & Sanctuary Park Sdn Bhd from AWP Aquarium & Park Sdn Bhd, which holds the remaining 30 per cent.


ADNAN: Infrastructure work on the Bukit Tinggi project is slated to commence next year

"This partnership will embark on tourism-related development on 115 acres of land in Bukit Tinggi, Bentong," he told reporters after chairing Pasdec's annual general meeting in Kuantan yesterday.

Adnan, who is also Pahang Menteri Besar, said infrastructure work on the project is slated to commence next year.

This may include the incorporation of an earthquake-proof technology, taking into account the recent detection of tremors in Bukit Tinggi.

Meanwhile, rising oil prices are expected to affect the group's property development growth prospects, particularly its residential properties.

"It will have an impact on the overall cost of living, affecting particularly the middle to lower income groups," said Adnan.

He added that a rise in building material costs will lead to an increase in the cost of construction, thus putting pressure on buyers' affordability and the price of properties.

"(As such,) we are strategically moving into non-property related businesses to reduce our reliance on property development," he said.

Pasdec recorded a profit of RM26.4 million for the financial year ended December 31 2007, from RM1.25 million a year ago.

Its revenue was RM107.2 million, up 1.5 per cent from RM105.7 million in 2006.

Adnan attributed the higher profit to the development of Putra Square in Transit Quarters, Kuantan, and the gains from the exchange of rights by bondholders of its Rainbow Exchangeable Bonds (REBs).

Pasdec announced the distribution of a first and final dividend of two sen per share less tax in respect of financial year 2007 for shareholders as approved during the meeting.

By New Straits Times (by B. Suresh Ram)

UEM Land signs pacts to buy properties

UEM Land Bhd, a subsidiary of UEM World Bhd and the master developer of Nusajaya, has signed agreements with UEM Builders Bhd and UEM Group Bhd to acquire properties to enhance and expand its property business in Nusajaya.

The consideration for these properties, estimated at RM155 million, is proposed to be satisfied via the issuance of mandatory convertible redeemable preference shares (MCRPS) of RM0.01 each in UEM Land or a holding company to be identified (and to be listed), at an issued price of RM1.00 for each MCRPS.

In a statement in Kuala Lumpur yesterday, UEM Land said UEM Builders has proposed to offer its shareholders the MCRPS to be received as consideration for the sale of properties under a non-renounceable restricted offer for sale (ROS).

UEM Group has also provided an undertaking to acquire all the MCRPS under the ROS.

“This ensures that UEM Builders will receive cash for the properties that it disposes of to UEM Land and at the same time give its shareholders a first right of refusal to buy the MCRPS,” it said.

UEM World managing director/chief executive officer, Datuk Ahmad Pardas Senin, said the acquisition was part of the on-going process by UEM Land to manage and consolidate its landbank in Nusajaya.

By Bernama

SP Setia hurt by high material costs

PETALING JAYA: SP Setia Bhd's net profit for its second quarter ended Apr 30 dropped 19.68% to RM47.99mil from the previous corresponding period mainly due to the escalating costs of building materials.

Revenue was 5.12% higher at RM301.51mil.

In a note attached to its quarterly result, the company said despite the challenging economic and business environment, expansion plans were on track.

Sales for the financial year 2008 (ending Oct 31) so far had remained strong and had hit RM951mil as at May 31, it said.

The company said rising costs remained the key concern and would be dealt with via a review of how contracts were awarded by incorporating cost-escalation clauses.

It added that operations would be restructured to make it more cost efficient while key infrastructure and amenities in the townships that the company was developing would be expedited and improved to “enable justifiable price increases to be passed on to purchasers”.

Aseambankers Malaysia Bhd said in an equity research report dated June 23 that SP Setia faced the twin risks of dwindling buyers' confidence and margin compression, which might cripple earnings growth.

“We conservatively cut our FY09 earnings forecasts by 12% to 19% in anticipation of slowdown in launches and margins pressure,” it said.

It added that with no immediate catalyst amid domestic and external uncertainties, the company's stock price was expected to languish over the next three to six months.

Recently, Real Estate and Housing Developers Association vice president Datuk F.D. Iskandar F.D. Mansor said the residential segment of the property industry faced “challenging times” due to higher oil price-fuelling inflation.

He said contractors were also not keen to take on new projects as they were adopting a wait-and-see attitude.

However, Sime Darby Property senior executive vice-president Datuk Abdul Wahab Maskan was quoted as saying in a report yesterday that despite the escalating costs of construction, the property arm of Sime Darby Bhd would not be deferring launches of new projects.

By The Star (by Fintan Ng)

Accor eyes 20-70pc stake in Malaysia hotels

ACCOR SA is keen to take a 20 to 70 per cent stake in the hotels that it operates in Malaysia.

Accor, which is on a aggressive expansion mode in Asia Pacific including Malaysia, operates brands ranging from the budget Formule 1 to the five-star Sofitel.

"Like our strategy globally, Accor want to be an equity partner, especially in economy (class) hotels, as we want to control the product and be consistent (in our service offerings)," Accor Asia-Pacific vice president for Indonesia, Malaysia and Singapore, Gerard Guillouet, said.

"We are looking at anything between 20 per cent and 70 per cent stake. We have started discussions with several hotel owners," he said.


Malaysian Operation: The Novotel Hydro Majestic in Kuala Lumpur

"We are happy to have investments in flagship hotels like Sofitel, Novotel or Pullman," he added.

Investments in four- and five-star hotels should not exceed 30 per cent, while in budget hotels will be up to 70 per cent.

Accor has sold many of its properties in Europe and is now investing some of those funds in new hotels in other parts of the world.

On the performance of its two existing hotels in Malaysia, namely the Sofitel Palm Suite in Johor and the Novotel Hydro Majestic Kuala Lumpur, Guillouet said revenue is expected to increase by 15 per cent this year against 2007.

By New Straits Times

Accor: 5,000 hotel rooms in Malaysia by 2012

FRENCH hotel and services group Accor SA plans to operate 5,000 hotel rooms in Malaysia by 2012, including 12 under the three-star Ibis brand.

It is now in talks with 10 parties in Malaysia to expand its existing brands and introduce new mid-market brands like All Seasons.

In Malaysia, the hotel group operates the Sofitel Palm Suite in Johor and the Novotel Hydro Majestic Kuala Lumpur.

The stable of two hotels will expand with the opening of Pullman Putrajaya Lakeside, Novotel 1 Borneo Kota Kinabalu, Mercure Kota Kinabalu and Novotel Kuching.

"We are confident that the Malaysian market is strong and it is getting stronger and infrastructure is strong too. There is also a drive to develop tourism (in Malaysia)," Accor Asia Pacific vice-president for Indonesia, Malaysia and Singapore, Gerard Guillouet, told Business Times on the sidelines of the World of Accor Expo in Jakarta, Indonesia, recently.

The World of Accor brings together the hotel and travel agents, wholesalers, corporate travel bookers, meetings, conference and exhibition specialists and travel industry partner.

"We are looking to open a flagship Sofitel in Kuala Lumpur and one more Pullman in Kuala Lumpur, and we are also in talks to open Ibis," Guillouet said.

"We would like to have 12 Ibis hotels in Malaysia. This is our five-year plan," he said.

Accor also expressed keenness to have three of its brands - Pullman, Novotel and Sofitel - in Langkawi.

On how Accor expects to compete with other hotel operators who are also in talks possibly with the same parties and in the same location, Guillouet said he is confident that Accor has the upper-hand.

"We are the leader in Asia Pacific with the largest number of hotels.

"We are also the most diversified hotel operator in terms of number of brands," he said.

Accor's brand ranges from the budget Formule 1 to the five-star Sofitel brand.

Today, revenue contributions from its hotels in Asia Pacific stand at less than 10 per cent, which provides the hotel group ample opportunity for growth.

By New Straits Times (by Vasantha Ganesan)

CapitaLand buys 62pc of Malaysian mall for S$250m

SINGAPORE: Southeast Asia’s largest property developer CapitaLand said today it had paid S$250 million (US$183 million) for 62 per cent of a retail mall in Malaysia.

CapitaLand chief executive Pua Seck Guan said the latest acquisition puts the Singapore-listed firm on track to set up its Malaysian retail real estate investment trust (REIT) by the end of this year.

“Together with the earlier acquisitions of Gurney Plaza and Mines Shopping Fair, the three assets collectively amount to a total asset size of approximately S$840 milion (US$614.5 million),” Pua said in a statement.

The retail space in the Sungei Wang Plaza mall is located in the popular Bukit Bintang retail belt in Kuala Lumpur and includes parking lots.

The mall has close to 100 per cent occupancy and sees more than 24 million visitors annually.

By Reuters

Amarin to launch luxury units in Q3

The Amarin Group, a niche boutique high-end developer, will launch its new Amarin Wickham development in the third quarter of this year.

The project is valued at RM130 million with units varying in size from 3,000 to 9,000 sq ft with an average price of RM4 million per unit, the company said in a statement yesterday.

Amarin Wickham is a low-density, low-rise luxury development of 21 units of duplexes and triplexes of innovative design set, it said. The company said it has almost completely sold out all units in its first development named Amarin Kiara.

By Bernama

HDC awaits Tamadam proposal on halal park logistics

HALAL Industry Development Corp Sdn Bhd (HDC) is waiting for Tamadam Bonded Warehouse Bhd's proposal on logistics infrastructure framework for halal parks in the country.

Chief executive officer Datuk Jamil Bidin said once HDC receives the proposal, it will conduct a study to see if the framework adheres to its guidelines on halal parks.


Jamil: If the proposed framework is feasible, we will recommend it to the companies operating in the halal parks

"The study will not take long. We can even complete it within one week. If the proposed framework is feasible, we will recommend it to the companies operating in the halal parks," he said after the launch of HDC briefing on halal certification by Deputy Minister in the Prime Minister's Department Datuk Dr Mashitah Ibrahim in Petaling Jaya yesterday.

Second-board Tamadam is expected to reveal the framework on logistics infrastructure for halal parks at its annual general meeting today. The proposed logistics framework is likely to bring in multi-million ringgit income to the company.

Tamadam's comprehensive halal logistics components, supply and distribution framework for the halal parks will include warehouses, distribution centres, commercial properties and IT system.

Currently, there are four halal parks designated by the government at Port Klang Free Zone (PKFZ) in Selangor, Gambang in Pahang, Padang Besar in Perlis and Tanjung Manis in Sarawak.

Jamil said HDC can only recommend Tamadam's logistics framework for companies operating in halal parks, but it is up to the respective companies to adopt Tamadam's services.

He said the PKFZ halal park, whose infrastructure and building have been completed, has started to attract interest from a few companies.

The park in Sarawak has received more than RM1.3 billion investment from over 20 companies, mostly foreign-owned, while the one in Pahang has an anchor Bumiputera company, Prima Agri Products Sdn Bhd.

The halal park in Perlis, which is designed to utilise raw materials from Southern Thailand and expertise from Malaysia, is still in the conceptual stage.

Meanwhile, Jamil said since HDC took over the authority for halal certification from Jabatan Kemajuan Islam Malaysia (Jakim) in April this year, it has received over 380 applications from local companies and more than 40 applications from overseas-based companies.

From the total, HDC has approved 80 local applications and one overseas application.

"About 85 per cent of these applications were submitted online, through e-halal that was developed by Jakim," he said.

By New Straits Times (by Hamisah Hamid)