OSK to inject UOA Pantai into property trust

STRATEGIC UOA: Pantai is located in Jalan Pantai Jaya in Kuala Lumpur

OSK Trustees Bhd plans to inject UOA Pantai into the UOA Real Estate Investment Trust (REIT) at a cost of RM86 million.

UOA Pantai, located in Jalan Pantai Jaya in Kuala Lumpur, is a five-storey office building with two mezzanine floors, on 0.36 hectare freehold land.

OSK Trustees will buy the property from Magna Tiara Development Sdn Bhd, a subsidiary of UOA Holdings Sdn Bhd.

The RM86 million price tag was decided on a willing-buyer willing-seller basis and is at a discount of 7.6 per cent from the market value of RM93.1 million.

The property was valued by Param & Associates (KL) Sdn Bhd.

UOA REIT told Bursa Malaysia Securities Bhd that Magna Tiara is negotiating with a few potential tenants, and the occupancy of the building is expected to reach 90 per cent within the next six months.

Units are expected to go at an average rental rate of between RM4.30 and RM4.50 per sq. ft, bringing in an estimated net earnings of RM4.5 million per annum after taking into account borrowing costs and other non-operating expenses.

Meanwhile, an unrealised gain on fair value adjustment of RM7.1 million together with a transaction cost estimated at RM1 million will be recognised in year 2008 upon completion of the acquisition.

"With the prime location, high tenancy rate and potential for growth in rental rates of UOA Pantai, the UOA Asset Management Sdn Bhd is of the view that the acquisition fits the investment objective of UOA REIT as well as its key objective for UOA REIT," UOA REIT told Bursa Malaysia yesterday.

UOA Asset Management is the manager of UOA REIT.

By New Straits Times

Deloitte: Tap Vietnam's hot property mart

Vietnam allows 100 per cent foreign ownership of properties except for projects that are of national interest - (Bloomberg picture)

VIETNAM's real estate and property sector is booming, and Malaysian investors can tap into this growing market which has been forecast to grow more than 50 per cent per year in the next 10 years.

Deloitte Vietnam senior tax manager Kevin Lam said following the big investments from Berjaya Kawat Group Bhd and Gamuda Corp last year, a few Malaysian companies are already in Vietnam conducting feasibility studies on the country's property sector.

"Real estate and property is the hot sector now in Vietnam, especially in key areas such as residential, office and city urban development," he said, adding that a prime land can cost as much as US$15,000 (RM48,900) per square metre.

Property appreciation too can easily double in a year's time, Lam told reporters in Petaling Jaya yesterday in conjunction with Deloitte's seminar on tax strategies for overseas projects and investments.

He said foreigners investing in Vietnam can also look forward to a reduction in corporate tax in the next few years from 28 per cent currently to a possible 25 per cent.

Vietnam, said Lam, is Asia's second fastest growing economy after China, with 8.4 per cent growth last year.

Political stability and competitive labour force makes it appealing to foreign companies, he said, adding that last year it attracted US$71 billion (RM231 billion) in foreign direct investment and Malaysia is one of the top 10 investors.

Excluding the US$10 billion and US$2 billion (RM32.6 billion and RM6.52 billion) investments committed by Berjaya and Gamuda respectively, there are now 232 projects by Malaysian companies in Vietnam valued at US$1.86 billion (RM6.06 billion).

Lam said recent positive changes in regulations governing the real estate market on top of the country's accession into the World Trade Organisation has stimulated the boom. Primary cities such as Hanoi, Ho Chi Minh City, Hue, Da nang and Hai Phong are among the focus of international real estate investors.

Lam said Vietnam allows 100 per cent foreign ownership except for projects that are of national interest.

"It is an open market like China and investors are queueing up at the door," he said.

Also present at the press conference were Deloitte Singapore senior tax manager Chester Wee, Deloitte Hong Kong's Lee Chee Weng and Malaysia's Yee Wing Peng.

By New Straits Times (by Roziana Hamsawi)

Local councils rapped for delays over OSCs

PUTRAJAYA: Housing and Local Government Ministry Secretary-General Datuk Ahmad Fuad Ismail rapped local authorities, especially local council presidents, who were unable to perform and implement the one-stop-centre (OSC) initiatives announced by the Prime Minister in March 2007.


Ahmad: All parties involved must keep their house in order. If they can't it simply means they're not good at their jobs

“Nine months have passed but some are not performing up to par and are still grappling with a lot of issues,” said Ahmad Fuad, in his winding up speech at the Seminar to Evaluate the Effectiveness of the New Initiatives to Improve the Government’s Service Delivery at Putrajaya International Convention Centre yesterday.

The two-day seminar, attended by more than 1,000 local authority representatives, state government officials, non-governmental organisations and professional bodies, was aimed at
upgrading development proposals and property management and maintenance issues, and as a follow-up to the last seminar held in April last year.

“If you can’t perform, then at least you must leave the office and allow for someone more capable to take over,” he said, referring to local council presidents.

“All parties involved must also learn to keep their house in order. If you can’t do it, then it simply means that you’re not good at your job.

To drive home his point, Ahmad Fuad cited an example: “In your house, you must not allow your maid or your driver to make important decisions instead of your wife”.

“And always remember to stay away from corrupt developers unless you are corrupt yourselves,” he reminded those present at the seminar.

“During the course of our work to implement the OSC initiatives, we will definitely come across a lot of ‘cheats’ and we must be wise to handle them.

“If any developer who approaches us with all the relevant documentation, then we must give them the necessary approvals without time wastage. If they don’t meet the requirements, then just reject them,” said Ahmad Fuad.

“If they start complaining, then let’s answer them. At least it will show that we are working,” he said.

The OSC was implemented to address delays developers faced in obtaining approvals for development projects. The aim of the OSC, which is housed at each of Peninsular Malaysia’s 103 municipalities, is to approve projects within six months.

All government technical agencies, such as the Public Works Department, Local Urban Development Department, Tenaga Nasional Bhd, Fire Department and relevant professional bodies are members of the OSC.

Besides the OSCs, the ministry implemented the Certificate of Completion and Compliance (CCC) to replace the Certificate of Fitness for Occupation (CFO), the Build-Then-Sell (BTS) concept and the Building and Common Property (Maintenance and Management) Act 2007.

Meanwhile, the National House Buyers Association honorary secretary-general Chang Kim Loong urged the ministry to implement and enforce the BTS concept to ensure unscrupulous developers do not cheat house buyers.

“We have had a lot of problems with abandoned projects and it is about time the BTS is enforced to ensure buyers don’t get cheated in future,” said Chang.

By theSun (by Tim Leonard)

Nagamas in JV to market properties

KUALA LUMPUR: Nagamas International Bhd has teamed up with Chinese construction firm Zhiangxu Zhenda Construction Co Ltd to market and sell upcoming commercial and residential units in Huizhou city, China.

Nagamas’ wholly-owned subsidiary Nagamas International (HK) Ltd (NIHK) signed the marketing joint venture (JV) agreement with Zhiangxu Zhenda to market the Longji Blue Bay project currently being developed on a 0.74ha parcel of land, with built-up area of 3.73ha.

In an announcement to Bursa Malaysia yesterday, Nagamas said NIHK would invest a total of RM8 million, while Zhiangxu Zhenda would guarantee the progressive returns of the said investment and payment of RM2.8 million profits to NHIK by Jan 31, 2009.

“The board of directors is of the opinion that the JV will provide strong synergy to the parties concerned and the time is opportune for the group to embark on new business direction by taking a step forward with its investment in the Chinese market that the board foresee will further enhance the future earnings of the group,” it said.

According to the statement, Zhiangxu Zhenda’s core business includes industry and public utility infrastructure construction. It has completed more than 20 projects in Zhiangxu, Chongqing and Anhwei provinces since 2004.

Its fixed asset totals 40 million renminbi (RM18 million). Construction projects in hand that are expected to be completed in 2008 have a total gross development value of more than RMB200 million.

Nagamas said it would finance the investment by proceeds raised from the rights issue and special issue approved by its shareholders on Feb 28 and July 26, 2007, respectively.

By The EDGE MALAYSIA

Malaysia's infrastructure spending set to quicken pace

Macquarie expects all the major construction companies to achieve better returns on equity this year as 9MP jobs are carried out



MALAYSIA may spend its money faster this year to build infrastructure like railways, water treatment plants and flood mitigation projects, says Macquarie Research.

"Given the significant amount of infrastructure jobs worth about RM89 billion yet to be awarded under the Ninth Malaysia Plan (9MP), privatised and private finance initiative (PFI) basis, and with the general elections likely in 2008, we expect the infrastructure spending to accelerate significantly this year," it said in a report on January 10.

This should result in a healthy growth rate for the construction industry for the next two to three years when these jobs are actually executed, it added.

It believes the jobs in focus will be those that directly impact the masses.

It noted that several high-value ones are already in various stages of bidding. These include the RM8 billion Pahang-Selangor water transfer project, RM9 billion Bakun undersea cable and overhead transmission project, and RM1.2 billion Penang Outer Ring Road project - all of which are likely to be awarded this year.

The blueprint for the Sabah and Sarawak economic growth corridor is also likely be announced before the general elections, around the first quarter of 2008, it said.

It expects all the major construction companies' returns on equity, estimated to be higher last year than in 2006, to improve further this year as 9MP jobs are carried out and higher profits made.

Macquaries' top stock pick in construction is Gamuda, which it believes will see significant earnings upgrades in the coming months. It also likes IJM and is positive on smaller stocks such as Naim Cendera and Zelan.

It has a 12-month target price of RM6.80 for Gamuda, RM9.85 for IJM, RM6.70 for Naim Cendera and RM7.75 for Zelan.

By New Straits Times (by Adeline Paul Raj)

UOA REIT's FY07 net profit surges fivefold

KUALA LUMPUR: UOA Real Estate Investment Trust posted a five fold jump in net profit to RM99.99 million for its financial year ended Dec 31, 2007 (FY07) from RM20.31 million in FY06 mainly due to a revaluation that resulted in a net appreciation on the fair value of its investment properties.

Revenue rose 9% to RM34.28 million from RM31.43 million, while earnings per share rose from 8.67 sen in FY06 to 40.65 sen in FY07. Net assets per share rose to RM1.386 as at Dec 31, 2007 from RM1.065 a year earlier.

It declared a final income distribution of 4.43 sen comprising 3.62 taxable income and 0.81 sen tax exempt income, bringing the total for year to 8.52 sen, the same amount as the previous year.

The revaluation in the second quarter ended June 30, 2007 brought a net appreciation on the fair value of the properties by RM68.4 million. In the fourth quarter, Wisma UOA Bangsar was revalued resulting in a fair value adjustment of RM10.35 million.

By The EDGE MALAYSIA

LBS disposes of 22 properties for RM3.9million

KUALA LUMPUR: LBS Bina Group Bhd is selling 22 of its properties in its Bandar Putera Indah mixed housing development in Batu Pahat, Johor to Bebas Bakti Sdn Bhd (BBSB) for RM3.92 million cash.

In an announcement to Bursa Malaysia yesterday, it said it had entered into the sale and purchase agreements via its property development unit LBS Bina Holdings Sdn Bhd yesterday.

The properties comprise 20 units of double-storey shop offices and two units of three-storey shops, all of which are reserved as bumiputera units.

LBS said the selling price of the properties was determined via open market prices and expected the disposal to be completed within three years.

The disposal is not expected to have any impact on its earnings or gearing for its financial year ending Dec 31, 2008 (FY08).

By The EDGE MALAYSIA

Signature targeting residential market

Second board-bound Signature International Bhd targets a year-on-year growth of between 11 and 20 per cent in net profit and revenue.

Signature, which makes kitchen and wardrobe sets, plans to bid for projects in the property sector, targeting the residential market, its founder and managing director K.C. Tan told Business Times.


TAN: We will keep expanding

"We have bid for RM50 million worth of contracts in Malaysia and RM50 million overseas. The success rate varies from project to project, but we are quite confident of getting a fair bit due to our past achievements," he said.

Tan said the new contracts will boost Signature's order book of about RM50 million currently.

Based on its prospectus, Signature expects to post revenue of RM94.7 million and net profit of RM13.2 million for the 12 months ending June 30 2008.

"We will keep expanding to countries which we feel have the right potential," Tan said.

To spearhead growth, Signature is setting up retail showrooms overseas, targeting Pune in India and Maldives, within the next one year, and one in Bandar Sunway, Selangor, by March.

At present, it operates 22 retail showrooms in the country and seven overseas.

The company, which has a factory in Kota Damansara, Selangor, producing 4,300 kitchen and wardrobe sets a year, plans to operate a second factory in the same area, which will help improve its production rate by 30 per cent.

Signature, scheduled to debut on Bursa Malaysia next Wednesday, aims to raise RM22.11 million from the listing exercise, which will be used for working capital and to build the new factory.

Its public offer involves the issuance of 17.7 million new shares of 50 sen each at an issue price of RM1.25 per share and an offer for sale of 2.1 million shares to selected Bumiputera investors.

By New Straits Times (by Sharen Kaur)

Shopping mall acquisition

Hektar finalising deal for REIT's third complex

HEKTAR Asset Management plans to inject a third shopping mall into the Hektar real estate investment trust (REIT) that it manages, by the first quarter of the year.

It is in the midst of finalising a deal to acquire a neighbourhood shopping mall, located outside of the Klang Valley, from a third party, its director and chief financial officer Zalila Mohd Toon said.


ZALILA: It's already a stable mall, which we can inject directly into the REIT

"We are hoping to close a deal soon; by this quarter. It's already a stable mall, which we can inject directly into the REIT," she told Business Times in an interview.

She declined to give further details about the mall, but said it will be the first of other acquisitions the company will make to grow the REIT.

The company is eyeing several malls and is already doing due diligence on a few, she added.

Hektar plans to focus only on malls in the country for now as there is still huge potential, especially in areas outside the Klang Valley.

"We intend to utilise gearing to buy (the third mall). But for other acquisitions, we may look at a secondary placement to finance the purchase if it is to be acquired by the REIT," Zalila said.

The retail REIT, currently comprising Subang Parade and Mahkota Parade, has an asset size of RM523 million. The company targets to expand this to RM2 billion by 2010.

The latest mall to be acquired is small and will not boost the REIT size to RM1 billion. However, it will be yield-accretive, said Zalila.

On another front, she said the REIT was on track to distributing a dividend of 9.6 sen a unit for the 13-month period ended 2007, as forecast in its listing prospectus.

It has been paying out dividend of 2.4 sen a quarter, giving unitholders total dividend of 7.2 sen for the three quarters so far.

Dividend aside, the REIT, listed in December 2006, had appreciated 43.8 per cent as at the end of last year, outperforming the Kuala Lumpur Composite Index's 34.1 per cent gain in the same period.

Hektar is due to announce its full-year results next month.

The REIT is also set to welcome to its five-man board three new members from new shareholder, Fraser Centrepoint Ltd (FCL).

FCL, a leading property developer in Singapore which is also a sponsor of the republic's Fraser Centrepoint Trust, holds 27 per cent of Hektar REIT.

FCL and Hektar Asset Management are also finalising an agreement for FCL to take up a 40 per cent stake in the latter.

"We think it can be finalised by this quarter," Zalila said.

By New Straits Times (by Adeline Paul Raj)

Grand Hotels upgrading properties

Operator invests RM13mil to refurbish all Grand Continental hotels

PENANG: Grand Hotels International Asia Pacific is investing about RM13mil to upgrade all its nine hotel properties under the Grand Continental brand in the country.

Hotel Grand Continental (Penang) manager Dennis Cheng said the hotels were now in various stages of refurbishment that would be completed within six months.

Dennis Cheng

“We carried out the first phase of the upgrading exercise last year with the installation of broadband facilities in all the hotels.

“The upgrading exercise is aimed at enhancing the corporate image of the hotels,” he told a press briefing.

Cheng said the Visit Malaysia Year 2007 campaign helped improve the hotels’ occupancy rate last year by 10% to 15% over the achievement in 2006.

“In 2007, the hotels in Kuala Lumpur, Terengganu and Kuantan averaged over 80% occupancy rate daily.

“Meanwhile, the other six hotels achieved between 60% and 70% occupancy rate daily,” he said.

Cheng said the group emphasised on its services to compete with other hotels of similar range.

“We provide five-star warm and friendly services,” he added.

By The Star (by David Tan)

Streamlined BCorp to see jump in net profit

Brokerage says this will come from property, consumer businesses

PETALING JAYA: Berjaya Corp Bhd's (BCorp) net profit is expected to jump 63.11% to RM367.1mil on the back of a projected turnover of RM2.39bil for the financial year ending April 30 (FY08).

The huge improvement would largely come from its property development and consumer marketing businesses, SJ Securities Sdn Bhd said in a research note.

BCorp staged a strong comeback in FY07 following a three-year restructuring exercise that was completed in FY06.

“For the first half of FY08, we see pre-tax profit (PBT) augmented by 257% to RM477.1mil from RM133.8mil.

“This is mainly due to the one-off gains from its disposal of investments and placement for Berjaya Land Bhd (BLand) irredeemable convertible unsecured loan stocks (Iculs),” it said.

The research house added that stripping the exceptional gains, the company would have posted a core PBT of about RM280mil, or a jump of 240%.

BLand is a 58.65% subsidiary. BCorp had disposed of some of its assets in Roadhouse Grill Inc, Gribbles Pathology Sdn Bhd and Dunham-Bush (M) Bhd to improve its debt position and operating cash flow, the research outfit said.

“We're bullish on the company's earnings growth outlook, propelled by the spike in earnings contribution from its core businesses as well as the one-off gains from the Iculs placement and disposals of its investments.

“In its first half results, we see remarkable improvements from its financial services as well as consumer product and services divisions, with double-digit growth,” SJ Securities said.

It said BCorp's 48.8% associate Berjaya Sports Toto Bhd continued to register strong underlying operating performance, with low capital expenditure requirements and fixed costs.

The company, the research outfit added, is also investing heavily in property development in Vietnam where it has five projects with a gross development value of RM38.7bil.

Its food and beverage division signed a franchise agreement with Wendy's International Inc last year to open about 70 outlets in South-East Asia over the next 10 years.

The division already has the franchise for the Starbucks chain of cafes and Kenny Rogers Roasters restaurants.

SJ Securities said the division, which had proven its ability in running franchise businesses, would see a modest contribution from the Wendy's chain of restaurants initially.

However, it said, the future of the company's fast-food chain operation looked good.

By The Star (by Fintan Ng)