IGB in no hurry to sell Renaissance

PROPERTY developer and hotel owner IGB Corp Bhd is in no hurry to sell the five-star Renaissance Kuala Lumpur, its executive director Tan Boon Lee said.

IGB made public its intention to sell the 910-room property last year.


IGB executive director Tan Boon Lee talks to Business Times about plans to open four more Cititel Express.

"The Renaissance is on the market. It is not one of the strategic properties that we want to grow. Renaissance is a non-core asset, so we will look to dispose of it," Tan told Business Times in an interview.

"Every year, the value of the property is going up. It's a matter of time. We are in no hurry to sell," Tan said.

IGB hopes to make RM800 million from the sale of the 12-year-old property. The hotel is held equally by IGB and Hong Kong's New World Development.

"The hotel is yielding, but not as high as (our) Cititel hotels. We want to unlock the value of the property and put (the investment) into new Cititel hotels," Tan said.

Both Cititel and Cititel Express cater for the mid-range market segment. The hotels, which typically have 400 rooms and 250 rooms respectively, bring in gross operating profit (GOP) of 60 per cent.

GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

When asked why it has been difficult to make a deal, Tan said: "There is an eight-year management agreement in place. A lot of buyers these days want to put in their own brand or want to self-manage, (but) we (at RM800 million) are selling below the replacement value."

The net book value of the property as at December 2007 was RM647 million, while its market value quoted by an analyst was RM654 million.

Last October, the hotel's general manager said that the hotel would undergo a US$16.7 million (about RM53 million) facelift this year and next.

The renovation and refurbishment, to be carried out over two phases, would involve the 510-room East Wing, followed by the 400-room West Wing.

The hotel, opened in June 1996, comprises two towers resting on a podium housing a convention centre which can accommodate 1,000 people.

Initially, the property was divided into the four-star New World and the five-star Renaissance hotels.

In 2004, in line with its global strategy to streamline hotel names, the New World brand was dropped and the popular Renaissance adopted.

Renaissance is part of the Marriott International Group hotel chain.

By New Straits Times (by Vasantha Ganesan)

IGB plans 4 more Cititel Express hotels

IGB Corp Bhd has plans to open four Cititel Express hotels between now and 2010, at an estimated cost of RM120 million.

The proposed hotels, costing about RM120,000 per room to build, will be located in Kota Kinabalu, Ipoh, Penang and Kuching.

IGB already operates two Cititel hotels - in Mid Valley City, Kuala Lumpur, and Penang - and a Cititel Express in Jalan Tuanku Abdul Rahman, Kuala Lumpur.

It is not surprising that IGB - which also runs the Boulevard, MiCasa and The Gardens hotel brands - is looking to grow the Cititel name as the hotel chain rakes in gross operating profit (GOP) of 60 per cent.

GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

"Ideally, we would like to have representation on the Kangaroo route, from London to Australia via Southeast Asia," IGB executive director Tan Boon Lee said in an interview with Business Times.

"We are keen on city centre developments, and our plan is to grow the Cititel brand and St Giles.


STRATEGIC PILLAR: One of the rooms in Cititel Express

"Hotel operations are a strategic pillar for IGB, and will continue to grow," he said, adding that the business will grow at the same pace as its property development and property investment and contribute a third of its profit.

The Cititel/ Cititel Express names are used in Southeast Asia, while the St Giles brand is used in London, the UK. All three brands cater for the mid-range market.

Cititel typically has 400 rooms, while Cititel Express has about 250 rooms.

IGB is also aggressively seeking hotel representation in Sydney and Bangkok, Tan said.

He added that, given the strong GOP, it made better sense to own and manage a hotel rather than just the latter.

Likewise, IGB prefers to build its own hotel than take over an existing one.

The five-star 439-room The Gardens hotel and 170 serviced apartments in Mid Valley City will open this quarter and the third quarter respectively.

Other hotels in the group include the MiCasa All Suite Hotel in Yangon, Myanmar; New World Hotel in Ho Chi Minh City, Vietnam; and Boulevard Mid Valley.

All the hotels, except that in Yangon, registered net profits last year.

Tan expressed hopes that once the economy in Myanmar bounces back, the hotel there will also report net profits.

By New Straits Times (by Vasantha Ganesan)

Reaching new heights with the super rich

KUALA LUMPUR: The sky is the limit for highrise condos, and with prices to match, lately.

The Binjai, an upmarket property in the heart of Kuala Lumpur.

Malaysia's super rich are pushing residential property prices to new heights, mainly in the most hankered-for Kuala Lumpur city centre addresses.

Prices of some of these yet-to-be-ready units in this vicinity are touching RM2,300 psf or in excess of RM15 million for the larger units.

While addresses in Bangsar and Damansara Heights were the traditional favourites when it came to high-end living, now there is serious hype about having a city address, much similar to the lure of living in London's Hyde Park, New York's Central Park or Ropongi Hills in Tokyo.

Location aside, specifications like imported marble and timber strip flooring alone are not going to excite these buyers. Instead, they demand the "wow" factor and everything that comes with it. Never mind the price. And state-of- the-art security is top priority.

Knight Frank Ooi & Zaharin Sdn Bhd general manager (project marketing) Tan Lay Kuen said buyers of super high-end properties are becoming more conscious about brand image and quality.

"This is because they are well-travelled and want the comfort of a strong brand name behind a development, such as the Four Seasons or the Millennium, which will offer them a certain standard."

Tan said the most premium condo and service residences were being sought by those who were buying to "live in".

"Typically, these people are not looking at it from the investment point of view. They want a place they can call home, whether for year-round stay or in-between their travels. So quality is everything."

She described the buyers as middle-aged, and "not overly concerned about the price".

A few years ago, Oriental Holdings Bhd chairman Datuk Loh Cheng Yean and former investment banker and former Singapore national tennis player Sherman Lim came up with a plan for Katana Residences, an exclusive 30-unit condo development in the U-Thant area, now nearing completion.

The idea for such a project was conceived because Loh, who was looking for a property in the city then, could not find one that matched her expectations!

Initial prices for Katana ranged from RM780 psf to RM1,000 psf (about RM3 to RM5 million per unit); the rest were subsequently sold during construction last year at prices ranging from RM1,200 psf to RM1,600 psf.

Lim described the condo buyers as "private and very particular" about the internal layout as well as how the building looked from the outside.

"The buyers are from Malaysia, Singapore, Indonesia, Hong Kong and other parts of the region.

"Basically, they place heavy emphasis on design as they all have lived in various international cities before, like New York, London, Tokyo, Shanghai and Hong Kong. They are very international in their outlook and demand."

The first wave of modern high-end living in the KLCC area was tested by Amanah Capital Partners Bhd, when it came up with the Ascott service apartments and Kirana condominiums, launched just months before the 1997 Asian economic crisis.

Back then, those sussing out the place included Malaysia's elite upper class, including royalty and socialites. Prices were set at around RM550 psf then. A real bargain, if you consider the prices today.

By New Straits Times

IOI Prop sees RM1b GDV from project

KULAI: IOI Properties Bhd sees its second mixed property development project in Johor generating RM1bil in gross development value (GDV).

Senior general manager (property division) Simon Heng said its Taman Kempas Utama would be launched this month.

“The location of Taman Kempas Utama in the Kempas-Tebrau growth corridor, within Iskandar Malaysia, augurs well for the company,” Heng told StarBiz recently.

He said the project, on a 101.17ha site on the North-South Expressway, would have about 2,000 residential and commercial units upon completion in 10 years.

The project would consist of high-end double-storey link and semi-detached houses, gated and guarded with smart-home concept, and shop offices, he said.

About 20.2ha of the area will be allocated for light industrial buildings and a Tesco hypermarket is planned for next year.

Heng said the Kempas-Tebrau corridor was currently the hottest spot for property development in south Johor with more than 10 ongoing projects.

“After 12 years in Kulai, it is timely to have a project in the Johor Baru district as we have been receiving requests from many Johor Baru residents,” he said, adding that the company was targeting existing house owners in the Kempas-Tebrau area, as they would prefer to buy houses within the area.

Heng said IOI Properties was also looking at Malaysian professionals working in Singapore, Singaporeans, and pensioners and expatriates based in the republic.

The spiralling prices of private properties in Singapore would force many buyers there to look elsewhere and Johor Baru was the best choice for them, he said.

By The Star (by Zazali Musa)

Magna Prima plans RM1bil 5-in-1 project

KUALA LUMPUR: Magna Prima Bhd will embark on a mega five-in-one integrated development at Jalan Kuching here this year.

Group managing director Steven Lee Kian Seng said the project, with a gross development value (GDV) of RM1.1bil, would comprise three-storey shop lots, eight-storey signature offices, two blocks of serviced apartments, a boutique hotel and a three-level retail mall.

“We are thrilled to be embarking on this project which is Magna Prima’s biggest project to-date,” he said at the company’s annual dinner in Kuala Lumpur last Saturday.

Construction on the 10.23-acre freehold site will be undertaken in four phases, with the first phase to begin in July. The final phase is targeted for completion by the third quarter of 2012.

Lee said the project would re-affirm the company’s standing as a major award-winning property contractor and developer in the country.

“When I took over the management of Magna Prima in 2005, I had a heavy responsibility ahead of me. I had to re-energise a demoralised team and motivate them to work with me towards building a new Magna Prima into one of the country’s top property developers, and a prominent brand name in the region.

“Quality, innovation, hard work and teamwork will be the cornerstones of the new Magna Prima as we steer it towards profitability and growth,” he added.

On its award-winning “six-star” The Avare in Kuala Lumpur, Lee said it had won the CNBC Asia Pacific Property Award in the high-rise development category.

The Avare, he noted, was being built at a “breathtaking rate of seven floors a month and all 78 units sold within a year.”

Magna Prima posted a whopping 944% rise in pre-tax profit to RM37.6mil for the year ended Dec 31, 2007 from RM3.6mil in 2006. Revenue also rose by 326% to RM344.4mil.

By The Star (by S.C.Cheah)

Selprop keen on Damansara Heights

Menara Milenium in Damansara Heights

PETALING JAYA: Selangor Properties Bhd (Selprop), one of the largest developers in Damansara Heights, plans to launch a few projects in the much sought-after area.

The company will launch its 107-unit Batai high-end condominium project this year but had not decided on its gross development value, financial controller Lee Boon Kian told reporters after the company AGM yesterday.

The last Damansara project on Selprop's books was Menara Milenium, comprising a 25-storey office building and a four-storey annexe block, completed eight years ago.

Lee said the pricing of the high-end units would likely fall within market rates for the location of RM800 to RM1,000 per sq ft.

“At present we are at the building planning stage and have done the initial earthworks,” he said.

The developer is also planning another project in Damansara in a joint venture with E&O Property Development. This will be a mixed commercial and condominium development at Jalan Semantan in Damansara Heights.

The joint developers were awaiting government approval for the “development order” on this project, Lee said.

Selprop's on-going developments include the RM400mil Bukit Permata mixed development in Gombak, and the RM350mil Selayang Mulia residential project.

At present, the company has 200 acres of undeveloped land bank, predominantly in the Klang Valley, of which about 26 acres is in Damansara.

Lee said the land bank was expected to last 10 more years.

As for the often-mentioned 19.57 acres of undeveloped land at Pusat Bandar Damansara, corporate affairs manager Chong Koon San said there were no immediate plans for development.

For the financial year ended Oct 31, 2007 (FY07), Selprop’s net profit dropped to RM84.5mil from RM89.6mil in FY06. However, revenue grew to RM198.6mil from RM181.1mil previously.

The lower net profit could be attributed to a forex loss from the sale of Multiplex stapled securities in its Australian operations that contributed the bulk of earnings in FY07.

The high dividend-paying company declared a 10% dividend for FY07.

By The Star (by Loong Tse Min)

Property developer fetes buyers in big do

SPK Homes hosted an evening of celebration and appreciation for approximately 200 guests of their latest project in Shah Alam – the Cahaya SPK.

Flanked by the lush natural forest of Shah Alam on one side and an Olympic length swimming pool on the other, SPK Homes had every reason to toast to the success of its 500-acre residential project which has a dedicated 78 acres of wide open parks, water canals and spacious playgrounds.

Fantastic win: The first prize winner (left) posing with SPK Homes Head of Property’s Lim (centre) and senior marketing executive Liong Ve Lyn.

Most of the units launched under their Precinct 1A – The HillPark Bungalow Lots, Precinct 2A – The Park Superlink Homes and Precinct 3 – The Park Link Villas have been sold.

SPK Homes feted the buyers and their families to a sumptuous fare of local and western delicacies, and an interesting programme line-up which included great entertainment, attractive lucky draws and the announcement of cash rewards for buyers. SPK Homes also presented a progress update of the project.

Game for some fun: One of the buyers sportingly sings Getaran Jiwa, with music accompaniment from the Balle Balle performers.

While enjoying dinner, the Balle Balle performers entertained guests with their rendition of all time favourites. Adding to the excitement of the night were the 23 lucky draw prizes worth RM15,000.

From resort and F & B vouchers to spa and holiday packages to Bali, Bangkok and Phuket, many buyers went home with big smiles as they held their rewards in hand.

Steven Lim, SPK’s Head of Property, together with his team, played the courteous host and warmly welcomed guests, interacted with them during the course of the night and were on hand to bid them adieu until the next SPK Homes celebration.

“Our buyers have initiated their own online forum to share insights about their investment at Cahaya SPK. Truly, it is amazing that even before the project is completed, a commendable community spirit among Cahaya SPK owners has been birthed,” said Lim. Lim also gave buyers a preview of Cahaya SPK’s next launch – the Precinct 2B – The Park Superlink Homes.

Also in the pipeline are two more launches for the year - bungalows and semi-dees, scheduled for the 4th quarter of the year.

Lim then announced the “Buyer Reward Programme” and the e-portal services for buyers which received a big nod from those present.

Concluding the night on a high note, Buddy Loren took to the stage and held the audience enthralled with his delightful imitations of many great performers including the late Tan Sri P. Ramlee and Saloma.

By The Star

SP Setia builds RM15mil show village

PENANG: SP Setia Bhd is investing RM15mil in a first-of-its-kind show village to market its Setia Pearl Island properties.

SP Setia property division (north) general manager S. Rajoo said the investment was necessary, given that the group did not want to sell its homes through brochures.

S. Rajoo

“We want to show the buyers what they will be getting in the show village,” he said.

The village, located on eight acres within the housing scheme, comprises 32 types of residential properties in the RM900mil project comprising a total of 1,200 landed homes.

It has an outdoor gymnasium, children’s playground as well as man-made water pond.

The project is also landscaped with water features and various species of plants and trees.

Rajoo said representatives from various financial institutions would be at the show village daily to help house buyers obtain loans.

So far, the company has spent over RM8.8mil to construct, decorate and landscape 10 homes representing the semi-detached and terrace houses to be built in the project.

“Another 10 houses will be built by year-end. In 2009, we will build the remaining 12 properties for the show village,'' he said.

The entire village is scheduled for completion end-2009.

The Setia Pearl Island project will be 50% completed by year-end and would have about 600 residential properties.

“The whole project is scheduled for completion in three years,” Rajoo said, adding that the first phase, comprising 291 terrace houses, had been fully sold.

“The first phase is about 70% completed and should be ready in October,” he added.

The second phase, comprising 267 terrace houses, is also sold out.

By The Star (by David Tan)

UOA sells office towers for

UOA Group’s wholly-owned Paramount Properties Sdn Bhd has sold three proposed boutique office towers in its flagship Bangsar South City (BSC) project in Kuala Lumpur for RM131.35 million.

UOA said in a statement the en-bloc sale to Bangga Istimewa Sdn Bhd and Bidang Lagenda Sdn Bhd, which are owned by the Middle East’s Al Batha Group, reflects the confidence of foreigners in its projects.

Although BSC has yet to be officially launched, UOA pointed out that interest from prospective parties, locals included, has been strong.

Besides commercial properties, BSC will also feature residential units that will contribute to its projected gross development value of RM3.5 billion.

Located off the Federal Highway and New Pantai Expressway, the development is being planned as the “new vibrant city between KL, Petaling Jaya and Bangsar” and in an area UOA dubs as the country’s “golden triangle of real estate”.

The 60-acre BSC will be developed over six to 10 years to consist of three precincts: The Village, which will make the entrance statement for the entire development; the 30-acre Park Residences condominiums that will house units of 1,300sq ft to 2,100sq ft; and a 30-acre commercial precinct.

The latter will be made up of The Horizon, The Virtual and The Sphere office complexes. The Horizon will comprise 10- and 11-storey blocks to be sold en-bloc, with each tower having an average gross area of 54,000sq ft as well as penthouses complete with feature pools.

The Virtual will be made up of 10 blocks of 20-storey offices, while The Sphere will be a retail complex featuring food and beverage outlets and other amenities.

With a 20-year track record, UOA has developed some of KL’s landmarks such as Wisma UOA Centre, UOA II, UOA Damansara I and II, UOA Pantai, as well as residences such as Villa Mont’ Kiara, Prima Midah Heights, Villa Yarl and Desa Bangsar Ria.

By New Straits Times (by Zoe Phoon)