Iconic IJM Land in the making

Datuk Soam Heng Choon with the model of the group's Ampersand@Kia Peng project

IJM Land Bhd, the new listed vehicle of the merged RB Land Bhd and IJM Properties Sdn Bhd, has big plans to build up its reputation as a leading property player of iconic projects in the country.

Being IJM Corp Bhd’s property development arm, the company also has the advantage of leveraging on the construction expertise of its parent.

IJM Construction is the main contractor for several high-end condominium projects in the KLCC vicinity including The Binjai, Park Seven and Troika.

According to IJM Land managing director Datuk Soam Heng Choon, RB Land and IJM Properties, being subsidiaries of construction groups, were regarded more as contractors than developers.

With the merger, IJM Land now have the combined strengths of its enlarged landbank and enhanced building capability to make an impact as a trusted developer of quality niche properties and new townships.

The merger of the two entities in April has created one of the largest property companies locally with landbank of 10,000 acres and other assets with total market value of RM3bil.

IJM Properties owns 7,000 acres while RB Land has 3,000 acres. The total land has a potential gross development value (GDV) of more than RM20bil to be realised over the next 20 years.

The huge landbank, which is geographically diversified in the Klang Valley, Penang, Negri Sembilan, Johor and Sabah, makes IJM Land one of the top property developers in the country.

“The multiple locations offer us the flexibility to change our product mix and project launches according to market demand. This is an important advantage in the current challenging market conditions,” IJM Land managing director Datuk Soam Heng Choon told StarBiz.

The two companies have projects in different parts of the country, which complement each other.

IJM Properties’ notable projects include PJ8 in Petaling Jaya, Ampersand@Kia Peng – a high-end condominium project in the KLCC area, Manda’rina mixed residential project in Cheras and another project in Saujana Puchong, Ukay Green in Ulu Kelang and Riana Green East in Wangsa Maju.

In Sandakan, Sabah, IJM Properties is involved in a 320-acre housing project.

As for RB Land, its flagship projects are the Seremban 2 and Shah Alam 2 townships, and semi-detached houses and bungalows in Bayu Segar, Cheras, and Bayu Sri Bintang in Kuala Lumpur.

Soam said the enlarged RB Land would be involved in more commercial developments in future. Turnover from commercial projects is set to double to 40% in the next two to three years.

“One of the immediate benefits of the merger is to tap into each other’s expertise as well as share staff for various projects.

“While RB Land has a lot of township building expertise, IJM Properties has expertise in building high-rise residences, notably condominiums,” Soam said.

IJM Land is poised to be a core division of the IJM group as property development is expected to contribute significantly to group profits.

For the financial year ended March 31, 2007, property development contributed 24%, or RM77.1mil, to IJM Corp’s pre-tax profit of RM318.9mil.

The completion of the merger next month will also result in the number of issued shares in RB Land expanding to 1.1 billion of RM1.25 each from 568 million currently.

“The improved share capital base will place the company on a firmer financial footing to take advantage of opportunities in the market and improve the market’s perception of its financial strength,” Soam said.

The market capitalisation of RB Land is also expected to double from around RM660mil currently.

With the completion of the streamlining of IJM’s property development business in April, IJM Land is ready to move into the second stage, which is the rebranding exercise to create a strong presence in the market.

“The rebranding initiatives that will involve the whole works of the company’s business processes will kick off next month.

“More emphasis will be placed on customer service excellence and relationship building as well as raising the brand awareness of IJM Land as a reputable developer with quality products to offer,” Soam said.

By The Star - StarBiz - (by Angie Ng)

IJM Land to focus on mid to high-end projects

Having the right product mix and brand attributes will ensure IJM Land Bhd joins the league of other well-regarded and strong growing property companies.

According to managing director Datuk Soam Heng Choon, the company would be placing more focus on medium-high to high-end property products as demand for mass market products had slowed down.

“We have some RM1.5bil to RM2bil worth of products lined up for launch each year, of which 30% will comprise high-end properties, 40% medium to medium high-end products and the balance lower-priced products,” he said.

High-end residential properties priced from RM1mil to RM7.2mil currently make up 20% of IJM Land’s total product offerings.

Its products have also shown good capital appreciation. An example is the Ampersand condominium in the KLCC vicinity, which were priced at RM600 per sq ft when the project was launched about a year ago but have now appreciated to RM1,200 per sq ft.

In line with IJM Land’s brand attributes of quality and well-designed products, value creation and on time delivery, Soam said IJM Land would be focusing on more modern and contemporary designs to meet the changing lifestyles of its buyers.

The company has more than 30 ongoing projects, of which 20 are in the Klang Valley, five in Penang, four in Johor, three in Seremban, two in Kuching, and one each in Malacca and Sandakan.

Meanwhile, the massive Canal City development on 5,000 acres in Kuala Langat is scheduled for launch next year. The project has an estimated gross development value (GDV) of RM10bil.

In Penang, IJM Land has its hands full with the ongoing development on the company’s coastal landbank along the Jelutong Expressway.

The IJM group was granted approval by the former Penang state government to develop 338 acres of land in exchange for the construction of the 4.7km Jelutong Expressway, which kicked off in the 1990’s.

The first 3.1km stretch of the expressway was opened to the public in 2003 while stage two was opened in February.

The whole development will be undertaken over four precincts – Bandar Sri Pinang on 82 acres, Metro East (30 acres) and The Light (152 acres) while the balance 100 acres comprising education, medical, art/cultural, commercial and residential components will be for future development.

The expected GDV for each of the precincts are RM680mil, RM1.1bil, RM5bil and RM2.5bil respectively.

Bandar Sri Pinang, comprising mainly medium to low-medium residences, is about 70% completed. The balance is expected to take another three to four years.

Among the ongoing projects in Metro East include Platino luxury condominium with GDV of RM190mil and Pearl Regency worth RM535mil.

The crown jewel of IJM Land is The Light, which is set for launch in the last quarter of this year.

The 152-acre integrated residential and commercial project will have 1,186 residences, including upmarket waterfront villas and condominiums, as well as office buildings, four hotels, retail malls, dining and entertainment facilities, seafront park, floating restaurant, and facilities for meetings, incentives, conventions and exhibitions.

The project, undertaken by IJM Land subsidiary Jelutong Development Sdn Bhd, will take 12 years to complete.

Work on the development will begin before year-end and the residential component under phase one is scheduled for completion by 2012 while phases two and three will take 12 to 15 years.

Under phase one, covering 42 acres, six parcels of high-end and low-density waterfront residences, will be developed.

With more than two million sq ft in total built up, the exclusive residences, with a view of the Penang Bridge, will generate a GDV of RM1.05bil.

Under phase two on 103 acres, a commercial and retail city, comprising the Gateway Towers, hotels, signature offices, showrooms, banquet and conference facilities, cultural hall, visitor centre and waterfront amphitheatre, will be built.

The seven-acre phase three will feature a seafront park.

The Light will be Penang’s first big scale wireless development and integrated waterfront project that is based on environment friendly designs and will use eco-friendly materials.

In line with IJM Land’s efforts to promote green building concepts, Soam said The Light would lead the way as Malaysia’s premier eco-friendly development.

“The focus will be on energy-efficient, healthier and environmentally-sustainable buildings.

“Being Penang’s first ‘green’ and sustainable development, the project will feature passive and energy efficient designs, including the use of solar panel for heating; wind turbines and photovoltaic panel as part of green energy; rainwater harvesting; eco self-sustainable canals; solid waste recycle management; green roof and the use of recycled timber and plastic,” he said.

Meanwhile, the calm water at the South Channel between the Penang island and the main land, will be ideal for The Light’s water recreational activities including water taxi, boating and floating restaurant.

By The Star

AmARA REIT enhances value of properties

AM ARA REIT Managers Sdn Bhd has embarked on enhancing the value of its commercial property assets, including a rebranding exercise for The Summit Subang USJ, to boost earnings.

This will see Am ARA reposition and rebrand the retail complex at The Summit, which it acquired in March for RM263.28mil.

The Summit Subang USJ which will be refurbished and rebranded by AM REIT Managers to make it the shopping destination of choice in Subang Jaya.

Am ARA director Michael Lim said the plan was to make The Summit the shopping destination of choice in Subang Jaya by tapping into the middle-income population there.

He said a retail consultant would be engaged to prepare a blueprint to reposition and rebrand the complex. The next stage would be to refurbish the complex to enhance the quality and ambience.

“We do not rule out the acquisition of more units at The Summit from other third-party owners although we will be very selective in such acquisitions.

“Discussions are ongoing with some of the owners and we are evaluating the acquisition of another 70,000 sq ft of space with a purchase value of about RM20mil,” he said.

The Summit has an office tower, a 332-room hotel and a six-storey retail podium, with 2,125 car park bays. The office tower recorded 98% occupancy and the retail podium, 70%. The hotel recorded an occupancy rate of 75%, with average room rate of RM157 per night.

The Summit is one of the six buildings, with a total value of RM840mil that are owned by Am FIRST Real Estate Investment Trust (REIT) and managed by Am ARA.

Other assets are Bangunan AmBank Group, Menara AmBank and AmBank Group Leadership Training Centre in the Kuala Lumpur city centre where the average occupancy rate is 94%. The other two buildings are Menara Merais and Kelana Brem Towers in Petaling Jaya.

Lim said Menara Merais in Section 19, which was about 12 years old, would also be upgraded. He added that the building, which was valued at RM58mil, was about 68% occupied.

“About RM6mil would be spent on asset enhancement works which include upgrading the ground floor main lobby, lift lobby on other floors, toilets, car park and building re-painting,” he added.

Menara Merais, being the tallest building in the area, could be leveraged on to generate advertising income because of the high visibility and high volume of traffic flow into the area, he said.

Also on the cards is to develop part of Menara AmBank in Jalan Yap Kwan Seng. Lim said 17,000 sq ft of “bare” space on the 11th floor, previously rented out as storage space, would be turned into office space.

“Assuming a rental rate of RM5 per sq ft per month, this space can potentially generate additional gross rental income of about RM1mil per annum,” he said.

Asked if Am ARA’s forte was to acquire less costly buildings, enhance the value by refurbishments and then lease them out, Lim replied:

“Our strengths are in identifying good assets for acquisition, having pro-active asset management capability to improve the performance of our assets and also, in efficient capital management.”

AmFIRST REIT’s assets also provided a stable stream of income to its unitholders because tenants would usually opt for three-year tenancy agreements, he said.

The buildings are also geographically spread out with several tenants, hence providing some diversification and reduced concentration risk. The growth of these assets, mainly office space, would be underpinned by the strong demand, particularly in the Golden Triangle area, Lim said.

Am ARA is also leveraging on the demand for good office and retail space to push for higher rental. In the last financial quarter, there was a combined average increase of 15% in rental rates for its office and retail space.

Of the three office buildings in the Golden Triangle, Lim said 32% (or 280,000 sq ft) of the tenanted area was due for renewal from July 2008 to March next year.

“Assuming an average rate increase of 30 sen per sq ft, the renewal may potentially generate another RM1mil in gross rental income on an annual basis,” he said.

Lim added that there was upside for four of its buildings as they had to be revalued within 2009 and he expected potential appreciation in the carrying value of these assets, going by recent transacted prices for office space.

“The revaluation could possibly see an increase in value of 10% from the RM500 per sq ft historical book value,” he said.

On future corporate exercises, Lim said the current gearing was about 47% and the plan was to reduce it to between 30% and 35%. This could involve an equity-raising exercise to reduce gearing and finance future acquisitions.

Lim said this would offer an opportunity to bring in more foreign inevstors to raise AmFIRST REIT’s international profile.

By The Star (by Joseph Chin)

UOL's Nassim Park Residences draws good response

UOL Group's Nassim Park Residences, a 100-unit freehold super-luxury development in Singapore, has achieved good response with 50 units sold in six weeks, drawing a good mix of local and foreign buyers.

More than 30 per cent of the buyers are foreigners and are mainly from Indonesia, Malaysia, Taiwan, the UK and Australia.

The luxury apartments cost at least S$10 million (RM23.6 million) each and the good take-up is attributed to its superior product positioning, strong product attributes and sizeable landscaping, not to mention its exclusive address in Singapore's most desired neighbourhood, the company said in a statement.

With Nassim Park Residences, a unique brand of city living is made possible with the collaboration of three internationally acclaimed creative minds: Singapore-based architect Chan Soo Khian, Japanese landscape architect Shunmyo Masuno and French interior designer Christian Liagre.

The project comprises a mix of lush ground floor units, each with its own private swimming pool as well as double-storey luxurious penthouses.

Unit sizes in the development range from 295 sq m to 744 sq m, the five-storey development features an assortment for spaces designed for lavish living.

The project is developed jointly with Kheng Leong Co and Japan's Orix Corp.

By New Straits Times

Withholding tax holds back growth

The withholding tax imposed on dividends is holding back the growth of real estate investment trusts (Reits) despite their high defensive qualities, especially in the current bearish market.

Analysts said Reits were currently below the radar screen of investors, especially retail investors, due to the withholding tax on dividends. The withholding tax is 15% for individuals and 20% to 26% for institutions. In Singapore, it is 10% for institutions.

Unlike Reits, companies which reward shareholders with dividends would have already paid the income tax while the investor can also offset the amount as a tax credit. However, this is not the case for Reits.

The analysts said other concerns were that lending rates could move up while it would also be difficult to push up rental rates in an economy which was slowing down.

However, there was more liquidity for Reits as investors could either buy or sell their Reit units much easier when compared with property, they said. But the lacklustre market conditions also meant slow appreciation of the Reit units.

Am ARA REIT Managers Sdn Bhd director Michael Lim said the upside for Reits was their high defensive qualities.

Michael Lim

“Reits offer good dividend yields, good asset backing and tenant agreements are locked in for three years,” he said.

It is understood that the Government is looking at the issue of withholding tax but it remains to be seen if it will be reduced in the Budget 2009 proposals.

Lim said Reits such as AmFIRST REIT were defensive instruments which provided good and stable returns/yield. Based on the latest quarterly results of AmFIRST REIT, its annualised return/yield is an impressive 10% (based on the closing market price of 88 sen for AmFIRST REIT on Wednesday).

By The Star

IOI Prop profit dips slightly

IOI Properties Bhd has registered a pre-tax profit of RM550.183 million for its financial year ended June 30 2008, a one per cent decline from RM555.174 million a year ago.

Its turnover, however, rose 12 per cent to RM787.9 million from RM704.87 million previously, IOI Properties said a statement today.

According to the group, the financial performance was mainly driven by sales of shop offices and a pick-up in demand for residential properties in its township developments.

It also benefited from higher incidental palm oil profit from its land bank as well as gained about RM24.2 million from the disposal of non-current assets.

IOI Properties said the current year pre-tax profit included a gain of RM115.1 million (2007: RM134.9 million) arising from revaluation of investment properties.

“Barring unforeseen circumstances, the group’s operating performance for the current financial year is expected to continue to be satisfactory,” it said.

By Bernama

BSN offering special rate for home property loans

KUALA LUMPUR: Bank Simpanan Nasional (BSN) is offering a special rate of 5.99% for residential property loans under its “Islamic Month” campaign from Aug 1 to Oct 31 this year.

Its deputy general manager of consumer banking and business development, Norazian Ahmad, said the campaign was aimed at encouraging the public to consider and understand the advantages of Islamic banking.

“BSN offers various promotions under Islamic banking products, including Giro-I savings account, Islamic Al-Bai’ Bithaman Ajil home loan, personal loan scheme and Al-Aiman credit card,” she told Bernama in an interview.

During the campaign, the first 50,000 customers to take up the Giro-I savings account would be given the Matrix-i card free instead of paying the RM8 fee and the minimum amount for opening an account has been reduced to RM10 from RM50.

BSN is also offering the Al-Aiman credit card based on syariah principles with the finance charge as low as 1% monthly for government staff. The card can also be used as a debit card.

The bank is imposing competitive finance charges from 5.05% for loans of RM5,000 minimum for repayment period of one to 10 years.

Norazian said BSN was studying a proposal to extend the repayment period to 15 years and an announcement would be made soon.

By Bernama

Setia Haruman expects high take-up for Cyberjaya project

SETIA Haruman Sdn Bhd is optimistic its RM200 million CBD Perdana 2 project in Cyberjaya will report a high take-up rate, amid current market uncertainties.

The two-year project, comprising signature retail-cum-corporate office suites, is earmarked for launching earliest by September this year.

The company, which the Emkay Group and the UEM Group hold a 75 per cent and 25 per cent stake respectively, is also launching 55 units of semi-detached houses priced more than RM800,000 per unit in December.


MASTER DEVELOPER: Setia Haruman chief operating officer Lao Chok Keang (left) and Balasundram looking at a model of the development projects for Cyberjaya

Setia Haruman corporate finance general manager Balasundram R. said Setia Haruman is confident of achieving positive sales from the two projects as they offer unique designs and features.

CBD Perdana 2 boasts a smart business environment and is suitable for companies wanting to adopt information technology in their businesses.

The suites will add 500,000 sq ft of office space to the current 3.7 million sq ft completed office space in the digital city by 2010, Balasundram said.

As the master developer of the 2,800ha Cyberjaya, Setia Haruman had previously developed over 200 high-end bungalow lots, 42 units of superlink homes fronting the lake and high-end condominiums dubbed "D'Melor".

The 120-unit D'Melor has been fully sold and tenanted, while more than 80 per cent of the bungalow lots have been taken up.

Balasundram said Cyberjaya's population, which stands at 35,000, is projected to grow to 60,000 by 2010, hence the need to build more housing.

"We want to ensure Cyberjaya has good ingredients to grow with the right product mix as international names are coming in," he said.

Balasundram said there has been interest from foreign parties looking to set up data centres in Cyberjaya, which will be the main activities there besides research and development centres.

Balasundram said 20 per cent of Cyberjaya has been developed year-to-date. 70 per cent of land in Cyberjaya is available for sale, while 10 per cent has been reserved for new projects.

By New Straits Times (by Sharen Kaur)

Making Setapak a vibrant hub

Property developer Crystalville Sdn Bhd, which already has a number of projects within Sri Hartamas, aims to turn Setapak into a vibrant business hub with the development of Plaza Crystalville @ Setapak.

Comprising four blocks of three-storey shop offices, the development is targeted at business operators rather than conventional purchasers, said chairman Datuk Azman Mahmood.

From left: Crystalville general manager Baharom Kadir, Datuk Azman Mahmood and marketing manager Thomas Tom viewing a model of Plaza Crystalville.

“The principle is to have the Sri Hartamas lifestyle in Setapak. We hope to get buyers who are owner-operators rather than investors because the former will move in and start businesses there and make the area more vibrant,” he told Starbiz.

“There is a tendency for investors to purchase the property but not move in. We want the area to be buzzing with commercial activities to make the place more attractive.”

Built on 7.5 acres of leasehold land, Plaza Crystalville @ Setapak will comprise 52 shop office units with a starting price of RM1.4mil each. The development will also have 400 parking bays.

Plaza Crystalville @ Setapak is located at Jalan Genting Klang, intersecting Jalan Langkawi and Jalan Taman Ibukota. It is accessible from the Kuala Lumpur city centre via North-South Expressway and Middle Ring Road 2.

The project has a gross development value (GDV) of about RM100mil. Construction will begin next month and the project is slated for completion by end 2010.

To date, about 54% of the shop offices have been taken up since its launch in June. Azman said he was confident of a full take-up by October.

“Thus far, about 97% of purchasers comprise restaurateurs and other business operators.

“Although construction costs have gone up 18% and 25% in the past few months, we are not increasing the price of the shop offices,” he said.

Azman added that Setapak was an up and coming location and could be the “next Sri Hartamas”.

“Lots of amenities such as hypermarkets and departmental stores like Parkson and Tesco are coming up in Setapak. There is even a medical centre there. Plaza Crystalville @ Setapak will definitely add value to the area,” he said.

On another note, the company is confident of a full take-up for Phase 4 of its Subang Alam residential development project by year-end. The development, which has a GDV of about RM35mil, comprises 30 units of two-storey semi-dees and five units of two-storey bungalows.

Since having a private launch last month, almost 40% of Phase 4 has already been snapped up. Azman said two of the bungalows had also been booked.

Subang Alam is located in Taman Bunga Raya, which is within the fringe of Subang Jaya/USJ and Shah Alam. It is accessible via all the major highways.

Azman said the majority of purchasers were from the USJ area.

Prices of the semi-detached homes begin at RM960,000 while the prices of the bungalows start from RM1.1mil.

The Subang Alam project is being developed by Subang Alam Sdn Bhd. Crystalville and Subang Alam have common shareholders.

Crystalville specialises in shop office development while Subang Alam’s core business is in residential projects.

By The Star (by Eugene Mahalingam)