Tune enters retail space business with Harbour Place

New Landmark: Harbour Place is expected to open in the fourth quarter of this year

TUNE Group has ventured into the retail space with Harbour Place as Tune Properties' first project.

Harbour Place is a development by Chestar Properties Sdn Bhd in Klang comprising of a shopping mall and office suite tower with a gross development value of RM420 million.

Tune Group founder Datuk Tony Fernandes said Harbour Place is Tune's way to reach out to the ripe yet under-retailed market of Klang and its surroundings, which currently has a population of more than 1.2 million.

"Klangnites have been travelling to Kuala Lumpur and Petaling Jaya to shopping malls to get their fix of high quality products and services, so why not have one in their own backyard? Harbour Place is a way to give Klangnites a chance to enjoy the top-class facilities available in Kuala Lumpur," he said in a statement.

Harbour Place is expected to open in the fourth quarter of this year, bringing the sophistication of a boutique, lifestyle leisure entertainment centre to Klang.

"With the success of Air Asia and Tune's other ventures, we feel that Harbour Place will provide the missing piece that ties together an end-to-end experience for the traveller," Fernandes said.

He said with the new low-cost carrier terminal just half an hour away from Klang, there are plans to shuttle transit travellers to Harbour Place, or even arrange for day tours for tourists making stopovers.

"Also, Malaysia's premier port - Port Klang - is just 10 minutes away, so cruise line tourists can easily travel via chartered couches to enjoy what Harbour Place has to offer," Fernandes added.

Chestar Properties general manager Kenny Chin, meanwhile, said Tune's endeavours with Harbour Place as a gazetted tourist destination by the Ministry of Tourism, will boost the development of Klang.

Datuk Kamarudin Meranun, the other founder of Tune Group, holds 63 per cent of Chestar Properties Sdn Bhd, the owner, developer and operator of the Harbour Place project.

By New Straits Times

Rising construction costs may dampen industry growth

RISING costs of construction may dampen the growth of the Malaysian real estate industry next year as property developers postpone or curtail some of their launches.

There have been growing complaints from industry players, particularly contractors and developers, that higher construction costs, intense competition and - to some extent - the recent shift in political landscape following the general election, will further erode profit margins and cause a “wait-and-see” attitude among investors and house buyers.

In fact it has been reported that many contractors are going bust because of rising building costs. Many of them are pleading with the developers to review their contracts. The developers in turn are faced with reduced margins.

Although the spate of new launches, especially in the Klang Valley, seems to be still going strong with many new players jumping onto the band wagon, there is a general sense of caution, even among the more established players, that things will start to worsen if crude oil prices do not come down soon.

“I think the property market is slowing down. We are monitoring the situation very closely,” said the chief operating officer of a property development company.

However, house buyers are caught in a dilemma of whether to put off their purchase to play safe in case the economy sours or buy now as property prices are unlikely to come down. The second choice seems to be more popular judging from the generally good demand for newly launched properties although they now take longer to sell.

Recently, the Real Estate and Housing Developers’ Association of Malaysia (Rehda) held a dialogue session with 35 analysts and fund managers to discuss issues like political changes, rising consumer prices and building material costs as well as bumiputra quotas and discounts.

Aseambankers analyst Ong Chee Ting said the dialogue “echoed our view that the property development sector outlook remains uncertain in the immediate term, with rising inflation affecting consumer sentiment and affordability.”

“Rising construction costs are also affecting developers’ margins and delaying new launches. Compounded with domestic political and external economic uncertainties, developers and house buyers are generally adopting a wait-and-see strategy,” he said adding that developers were relying on strong locked-in sales over the past two years to deliver earnings growth.

“On a positive note, developers are experiencing general improvements in public delivery, with increased efficiency and reduced bureaucracy post-election,” he added.

Ong said the mass market segment remained price sensitive, which limited developers’ pricing power while high-rise developers were generally at greater risk of margin erosion as they faced higher land cost.

Meanwhile, Rehda in its Budget 2009 wish list, has urged the Government for a total tax exemption for dividend income from real estate investment trust companies; higher minimum selling prices for low-cost houses, at RM60,000 per unit; lower stamp duties across the board, by half; and standardising bumiputra housing policies at the national level in terms of discounts (e.g. Johor’s 15%, Malacca’s 10% and Selangor’s 7% currently) and policies relating to the release of bumiputra quota.

By The Star (by S.C.Cheah)

Tradewinds buys Khazanah's share in hotel unit

TRADEWINDS Corporation Bhd (TCB) has entered into a sale and purchase agreement to buy 25.67 per cent of Tradewinds Hotels and Resorts Sdn Bhd (THRSB) shares and 371.64 million of its irredeemable convertible unsecured loan stocks (ICULS) from Khazanah Nasional Bhd for RM400 million cash.

TCB said the proposed acquisitions represent its continuous effort to focus on and streamline its hotel and property development business.

"The proposed acquisitions will enable TCB to have full control over the future direction of the hotel business," it said in a statement to Bursa yesterday.

The purchase consideration was arrived at based on a willing-buyer willing-seller basis, after taking into consideration the net asset of THRSB of about RM1.12 billion based on an audited account of THRSB as at December 31 2007.

The proposed acquisitions will be funded by way of internally generated funds and bank borrowings, TCB said.

TCB and its respective subsidiaries are directly holding the hotels and resorts assets such as the Hotel Istana in Kuala Lumpur, Crowne Plaza Mutiara in Kuala Lumpur, Hilton Petaling Jaya, Hilton Kuching, Hilton Batang Ai in Sarawak, Mutiara Taman Negara, Mutiara Johore Baru, Meritus Pelangi Beach Resort & Spa in Langkawi as well as the landed assets of the former Mutiara Beach Resort in Penang and the Mutiara Pedu Lake in Kedah which have ceased operations.

The net assets and loss after taxation of THRSB based on the latest audited financial statements for the financial year ended December 2007 are RM1.12 million and RM9.47 million respectively.

Based on the audited accounts of TCB as at end December 2007, the proposed acquisitions would result in TCB realising a one-time net gain of RM135.8 million arising from the negative goodwill or an increase in earnings per TCB shares by 12.27 sen.

By New Straits Times

Oil and gas spin-offs for YNH township

PETALING JAYA: The US$5bil oil and gas (O&G) complex to be built in Manjung, Perak, by Qatar's Gulf Petroleum Ltd will create a new level of demand for housing in the area.

The company said recently it had received approval from the International Trade and Industry Ministry for its project, and that the Perak government had offered it a 405ha site in Manjung.

The economic spin-offs from this project will be felt by a wide range of businesses in Manjung, including Bandar Sri Manjung being developed by YNH Property Bhd.

“When Tenaga (Nasional Bhd) started building its Janamanjung power station in the late 1990s, there were about 2,000 construction workers in the area for several years.

“At the peak, there were about 5,000 workers,” YNH head of corporate finance Daniel Chan said.

The power station is located on an island near Lumut Port.

When a big project was being built, a lot of construction workers would come here to work, and they would be renting houses, Chan told StarBiz in a telephone interview from his office in Sri Manjung.

Chan said he had heard that Gulf Petroleum had started to hire construction workers to get earthworks moving.

When the project is completed several years later, the permanent employees at the complex would also require housing.

Bandar Sri Manjung will occupy a total of 809ha, of which about 365ha are yet to be developed. Demand for houses in the township was consistent, so about 20ha were developed every year, Chan said.

There is stable demand for housing from the naval base at Lumut Port.

In recent years, the flurry of activities at Kencana Petroleum Bhd's fabrication yard in Lumut had also brought numerous workers, including expatriates, Chan added.

Hence, contrary to concerns about a slowdown in the property sector, YNH is experiencing an increase in volume sales and prices at Bandar Sri Manjung.

Sales volume and house prices have increased by 10% to 20% in the first quarter. A single-storey house there cost RM120,000 this year compared with about RM105,000 last year, Chan said.

YNH shares are actively traded, with about three million shares changing hands daily.

At the price of RM2.33 a share, the stock sees a turnover of about RM35mil a week, indicative of buying by institutions.

By The Star (by C.S.Tan)

Experts to improve e-Tanah land registration system

PETALING JAYA: The Selangor Government will bring in land experts to improve the state's e-Tanah registration system, which is alleged to have led to manipulation and multiple ownership of land.

Selangor Mentri Besar Tan Sri Khalid Ibrahim said the state wanted to identify the weaknesses in the system to resolve the problem.

Tan Sri Khalid: Premature to blame land scams on a syndicate, as alleged by Khir Toyo.

“But it takes a bit of time to find 'why did you do this and that', then only can we solve the problem,” he said after a get-together with residents of the Kampung Muhibbah PPR flats in Puchong yesterday.

He told this to reporters when asked about the alleged land scams uncovered by the new state government.

Khalid said the weaknesses in the registration system were in the recording, approval and identification of owners.

“When you are talking about 20,000 files, people can change a file and even manipulate it. But we don't want to talk about manipulation until we clear up the system,” he said.

Khalid said most of the cases of multiple land ownerships were in the Petaling and Gombak districts, where the land prices were high.

“We are trying to find out why it happened and at the same time try to bring up some of cases for clarification and even for the courts to decide who the real owners are,” he said.

On former Mentri Besar Datuk Seri Dr Mohd Khir Toyo's claim that a syndicate was involved in the land scams and that it occurred when the manual system was computerised, Khalid said it would be premature to blame it on a syndicate until a probe was carried out.

On his visit to the Kampung Muhibbah PPR flats, he said the residents' problems included renting and buying the flat units from Kuala Lumpur City Hall.

“A repayment scheme should be worked out to enable the residents to eventually own the flats,” he added.

By The Star