I-Bhd may seal deal with CapitaLand in early 2009

IT-ADVANCED: The RM500 million mall, to be part of i-City, will be comparable to the Mid Valley Megamall.

I-BHD, developer of the i-City project in Shah Alam, may sign a definitive partnership agreement with Singapore's CapitaLand for a RM500 million shopping complex early next year.

The project, which forms part of i-City, is expected to be ready as scheduled by the end of 2011.

"We are still in discussion with one foreign party, but there has been no firm conclusion yet," I-Bhd's deputy chief executive officer Lim Boon Siong said when contacted by Business Times.


LIM: The parties are still fine-tuning details

Lim, who had earlier been quoted as stating that an agreement will be reached in the third quarter of 2008, said that the parties are still fine-tuning details.

Although he declined to say who its foreign joint-venture partner is, CapitaLand Ltd on October 23 informed the Singapore stock exchange that it was in talks with I-Bhd.
Lim expects that the earliest possible time that a deal is likely to be sealed would be early next year.

I-Bhd hopes to form a 70:30 joint venture, with a foreign institution holding the majority, to build an international-class shopping complex.

Once the joint venture is set up, I-Bhd will sell the land to the joint-venture partner. The mall will then be developed together, while its partner will manage the shopping complex.

The mall, with one million sq ft of gross lettable area, would be comparable to the Mid Valley Megamall in Kuala Lumpur.

i-City is creating an entire new community which is IT-advanced. As such, a mall is required.

The mall will cater to about 30,000 office population within i-City and 50,000 when the entire project is completed in 2012.

CapitaLand's interest in Malaysian shopping centres include Sungei Wang Plaza in Kuala Lumpur, Gurney Plaza in Penang and Mines Shopping Fair in Seri Kembangan, Selangor.

By Business Times (by Vasantha Ganesan)

Waiting game for property buyers

PETALING JAYA: It will continue to be challenging in 2009 for the secondary residential property market as buyers continue to adopt a wait-and-see stance on property purchases due to the global economic slowdown, property experts said.

The degree of softening in property sales would depend on the severity of the economic downturn next year, they said.

Regroup Associates Sdn Bhd executive director Paul Khong acknowledged that the secondary residential property market has been quite slow as potential buyers have been holding off decisions on house purchases.

“This has significantly impacted the property market especially in the current quarter,” he told StarBiz.

“The quiet period is expected to continue through to the first quarter of 2009 after all the holidays are over.”

S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng said buyer sentiment had taken a beating due to the current economic uncertainties.

“It’s a waiting game for buyers. There are even ‘aborted’ cases where buyers have placed an earnest deposit to purchase a property and subsequently pulled out from the transaction, in the hope that prices will come down further or in search of fire-sales while others are uncertain of their job stability and postponing the purchase commitment,” she said.


From left: Paul Khong, Chab Ai Cheng, Eric Lim, Elvin Fernandez and Goh Tian Sui

Nevertheless, Hartamas Real Estate Sdn Bhd managing director Eric Lim is anticipating stable to moderate growth due to bargain hunting in certain segments of the secondary property market, especially landed residential property.

“(However) the market for properties that are purchased for investment and speculation will be slower,” he acknowledged.

The agency experienced a 20% to 30% drop in sales in the second half of the year versus the corresponding period of 2007.

“This is quite substantial for us. Sentiment is still not good,” Lim noted.

CH Williams Talhar & Wong Sdn Bhd managing director Goh Tian Sui concurred.

“The last two to three months have been quite bad – enquiries and sales activities have dropped. Owners are more open to negotiations in pricing,” he said.

The prices of certain secondary residential properties could also face more pressure next year due to a lack of demand and an increase in supply of completed projects.





Citing an example, Regroup’s Khong said the situation for high-end condominiums in the KLCC and Mont Kiara areas were getting critical and there would be more pressure on rental and capital values as many of the projects in the vicinity would be completed within the next one or two years.

“Supply will be mounting on a monthly basis as demand continues to be low and this will eventually translate into lower capital values and rental.

“An easy 15% to 20% shed in values are envisaged for this sector generally,” Khong said.

The asking prices for middle-class residential properties in general, for example, terrace houses in good locations such as Sri Hartamas, Bandar Utama and even Taman Tun Dr Ismail, had already been adjusted 5% to 10% lower to reflect current market conditions, Khong said.

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez noted that prices of high density condominiums with a low occupancy rate in not-so-choice locations were about 10% lower now compared with a year ago.

“Although prices have softened, it is still difficult to sell such properties,” he said.

By The Star (by Elaine Ang and Rachael Kam)

Players: Mature property neighbourhoods remain popular

PETALING JAYA: Some popular locations in the Klang Valley still attract buying interest for secondary properties, either for investment or own occupancy, despite the softening property market in the country, industry players said.

Townships with mature neighbourhoods and high-end residences in Kuala Lumpur which are close to the city centre remain popular secondary property markets, even for next year, according to real estate agents contacted by StarBiz.

Hartamas Real Estate Sdn Bhd managing director Eric Lim said popular locations for landed secondary residential properties in the Klang Valley included Ara Damansara, Bandar Utama, Bukit Jelutong and Kemuning Utama in Shah Alam, with people still buying properties there.

“It is expected to continue to remain active next year as the prices there are affordable versus the more mature residential areas such as Petaling Jaya. “Buyers, especially the young executives, are willing to go slightly further for more affordable property prices,” he said.

For condominiums, Lim is positive about locations such as Bangsar and KL Sentral as fewer launches in these areas in recent years have contributed to a stable supply.

Chester Properties senior real estate negotiator Kam Jun Yin said Petaling Jaya, Subang and Puchong were still the popular locations for those who planned to purchase properties for own occupancy.

Kam observed that the KLCC vicinity and Mont Kiara areas were most popular with buyers who bought for both own occupany and investment purposes, noting that prices in these two high-end locations had risen more than 100% in three years.

Secondary property prices in KLCC vicinity were ranging from RM1,000 to RM1,400 per sq ft, he said.

“Given that most of the new properties in the KLCC vicinity are looking to achieve RM2,500 to RM3,000 per sq ft, perhaps next year, secondary prices may be pushed higher,” Kam said.

According to S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng, Petaling Jaya, Damansara Heights are also attractive to secondary property buyers.

“These locations are well-established with mature neighbourhoods and populated with growing families creating natural demand as well as coveted residential address to match people’s lifestyle and demands today,” she said.


Raymond Phua

J A Valleys Properties real estate negotiator, Raymond Phuah, noted that “coupled with the limited land with freehold title in these areas, Petaling Jaya has attracted a lot of potential buyers for secondary properties.”

By The Star

Four niche market projects

Property developers are constantly coming up with new ideas to meet the expectations of a discerning house-buying public. They have to come up with creative ideas, meet the challenges or perish.

We shall look at four residential developments that target very niche markets and have their unique selling points.

The Regent Residences Kuala Lumpur: Themed “high living re-imagined”, it will be the capital’s newest strata titled and freehold luxury hotel residences schduled for completion in 2011.

The developer KL Landmark Sdn Bhd (an associate company of Dutaland Bhd) has positioned this very high-end project akin to the best in Manhattan and Hong Kong.

It also developed the recently completed K Residences, Kuala Lumpur’s first luxury designer residence and Malaysia’s tallest condominium and is adjacent to the Regent Residences.

The 40-storey hotel residences will comprise of a 230-room Regent Kuala Lumpur and 115 units of Regent branded, 1 to 3-bedroom serviced apartments plus two levels of sprawling penthouse units.

Sizes range from 464 to 2,495 sq ft while the penthouse range from 2,634 to 3,719 sq ft.

The idea is to offer city dwellers with the experience of high living in the privacy of discreet comfort, while having access to the amenities and services of a 5-star luxury hotel.

The Regent Kuala Lumpur will be managed by Carlson Hotels Worldwide-Asia Pacific, one of the world’s largest privately-owned hotel companies, which is expanding its luxury Regent brand into key gateway cities across the region.

The interiors of the serviced apartments will be designed by Sir Terence Conran, one of the world’s best known designers, restaurateurs and retailers, and founder of Conran & Partners.

The design firm has revitalised architectural landmarks such as Michelin House, Butlers Wharf and Bluebird Cafe. Its recent portfolio includes Roppongi Hills and Motoazabu Apartments in Tokyo, and The Great Eastern Hotel in London.

The Regent Residences Kuala Lumpur will be the city’s only luxury residential development with a sky pool, offering panoramic view of the Kuala Lumpur City Centre (KLCC) development.

Kenny Heights: Dutaland Bhd, through its 100% owned subsidiary KH Land Sdn Bhd, has also been quite bold and innovative with its plans for its 88-acre freehold Kenny Heights project in Kuala Lumpur.

I recently viewed its Kenny Heights Estate (one of the phases) show villa (next to the Hartamas Shopping Centre). It comprises 49 units of luxurious four-storey town villas with built-up from 5,300 to 6,700 sq ft. Prices start from RM4.5mil.

Its signature feature is a 36ft-long private swimming pool in a garden of the master bedroom. It has a private lift. The villas are designed by Kengo Kuma.


The doube-storey bungalow that boasts 14 rooms in EduSquare in Taman Tasik Semenyih

EduSquare: BTS Land Capital Sdn Bhd (formerly Bandar Tasik Semenyih Sdn Bhd) has built hostel-style homes in a security guarded precinct called EduSquare in its Taman Tasik Semenyih.

The homes can accommodate students at the Nottingham University (Malaysian campus) just next door.

It has built 18 two-storey semi-detached terrace houses (10 units of 11 to 14 rooms each from 3,199 to 4,169 sq ft and eight units with nine to 15 rooms each from 3,340 to 4,790 sq ft) and a two-storey bungalow with 14 rooms and a big 5,229 sq ft built-up area.

Every room has an attached bathroom.

The unique selling point is that those who buy the fully furnished houses also enjoy guaranteed yield of 7% per annum from rental to students over two years.

Since the varsity came into operation a few years ago, the student population has increased and there is a need for more student accommodation.

The old Broda road has also been widened into a dual carriageway.

Taman Tasik Semenyih is surrounded by greenery with a peaceful, mountain backdrop. It boasts of a nice clubhouse.

Residency @ Park 51: The main feature of this proposed four-block condominium is its huge 132,000 sq ft clubhouse that will feature a large banquet hall, a function centre, gymnasium, food and beverage outlets, a supermarket, retail shops, business function rooms and a near Olympic-size swimming pool/children’s wading pool.

It is part of the Park 51, a five-component mixed residential cum commercial development in Section 51, Petaling Jaya by the Taipan Group.

There is a choice of 15 designs for the 664 units with sizes of 662 to 2,443 sq ft, from studio units to duplex penthouses.

Prices start from RM254 per sq ft compared to nearby offerings of RM300 per sq ft.

By The Star (by S.C.Cheah)

Regroup: Market will take 3 years to recover

Malaysia's property market will take three years to recover from its current slump, the slowest revival in more than two decades, reflecting the reach of the worldwide financial crisis, Regroup Associates Sdn Bhd said.

"In the past four weeks, I've been staring at an abyss," said Allan Soo, managing director and founder of Regroup, a Kuala Lumpur-based property consultant and home seller. "What's changed is the global recession."

A worldwide slowdown has sparked real-estate slumps from the UK to Singapore, causing Malaysian developers such as Magna Prima Bhd to scale back projects. Values of luxury homes in Kuala Lumpur, where prices surged to a record last year, may fall as an oversupply looms, according to Soo, who declined to give a specific forecast.

Malaysia's property market took about a year to recover from the 1997-98 Asian financial crisis, Soo said. The rebound from the latest slump may start in 2010 and take as long as the recovery from the 1985 recession, Soo said.

Compared with 2007, interest from prospective buyers has dried up, Soo said in an interview in Kuala Lumpur last Thursday.
"Inquiries would come in right after we put up a sign board on properties," Soo said. "Now, there's none."

Home prices will come under further pressure as the number of high-end apartments in Kuala Lumpur doubles to more then 30,000 in the next three years, according to Regroup.

Economic growth in Malaysia in 2009 is expected to slow to 3.5 per cent from about five per cent this year, according to the government's estimates. Still, losses for homeowners may be capped because most bought properties in 2006 before the peak for less than RM1,000 a square foot, Soo said. The entry of foreigners last year pushed prices to more than RM2,000, he added.

Signs of fewer home purchases have already emerged. Bank loans approved for Malaysian home purchases in October fell to its lowest since February, according to Bank Negara Malaysia.

SP Setia Bhd, Malaysia's largest developer, expects a 22 per cent decline in property sales to RM1.1 billion in fiscal 2009, Citigroup Inc said last Thursday. SP Setia's officials couldn't be reached in their office last Friday for a comment. The Kuala Lumpur Property Index has slumped 51 per cent this year, outpacing the main index's 40 per cent slide.

Magna Prima said last month it cut the projected revenue from its biggest property development in northern Kuala Lumpur by almost half.

By Bloomberg

Work on RM750m theme park to start 2010

JOHOR BARU: Work on the RM750mil Legoland theme park at Bandar Nusajaya in Iskandar Malaysia will start in 2010 and the opening slated for 2013.

The park, to be built in the city centre of Nusajaya, will have a 5.5 million sq ft of gross floor area within the 58.679ha land dedicated for the lifestyle-theme development.

Merlin Entertainment Group Ltd managing director for Legoland Parks, John Jakobsen said the theme park would create about 1,000 job opportunities in the park itself and it could reach up to 5,000 during construction period and indirectly upon the completion of the project.

Sectors which would benefit from the opening of the park would include retail, hospitality, services and food and beverage to cater for tourists and visitors.

“We want to position our Johor park not only as a leading tourist attraction in Malaysia but also in the region,’’ he said.


John Jakobsen

Jakobsen said the park was expected to attract between one and two million visitors yearly.

“The figure is based from our four existing parks with revenue between US$40mil and US$100mil per park,’’ he said.

Merlin, which is controlled by Blackstone Group of New York, an investment and advisory firm, has 70% equity in Legoland theme parks while Lego Group holds 30% stake.

Legoland has four theme parks.

The park in Billund, Denmark opened in 1968, Windsor, England (1996), California (1999) and Germany (2002) and in Dubai, which will open in 2011.

Other theme parks under Merlin stable include Madame Tussauds, London Eye, Thrope Park, Sea Life Sanctuaries, Dungeons in Europe, 28 aquariums and six hotels across the world.

“We have considered coming to Malaysia about four years ago and we started seriously looking into it about eight months ago,’’ he said.

He said the company’s investment decision in Iskandar was based on the development activities to be implemented.

Jakobsen said the Legoland park in Johor would not only attract visitors from other parts of Malaysia and Singapore but visitors from other countries in the region.

He said visitors from other countries in this region would find it more convenient to come here than going to Europe or North America.

Jakobsen said Malaysia offered a strategic location in Asia with 60% of the world’s population.

“Legoland park is different from other parks as our attractions are made to appear as if they are built out of Lego bricks,’’ said Jakobsen.

He said Legoland park targeted at children aged from two to 12 years old accompanied by their parents or grandparents and not teenagers and young adults which was the main focus of the other theme park operators.

By The Star (by Zazali Musa)

Gamuda's Hanoi project may take centrestage at AGM

PETALING JAYA: The deteriorating global economic climate will likely cause worries among shareholders about the viability of Gamuda Bhd’s overseas projects at the company’s AGM tomorrow, among other key concerns.

Analysts expect the construction group’s investment in the Yen So Park project in Hanoi, Vietnam, to come under investors’ radar.

A senior analyst at a bank-backed research house told StarBiz that with the economy tumbling in Vietnam, he would not be surprised if Gamuda withdrew from that country.

“The Vietnamese stock market is softening and the economy is also currently in a downturn, so they (Gamuda) may reconsider the project,” he said.

Investors were not quite sure what the company was going to do and they might want to seek guidance from the management, he said.

As for the group’s massive double-track rail project in northern Malaysia, the analyst said there was talk it had been scaled down so shareholders would need to know the status of the project.

OSK Research analyst Jeremy Goh noted that part of the Hanoi project entailed Gamuda building a sewerage treatment plant for the Vietnamese government for which the company would be paid in-kind with development land.

“In the current negative global economic environment, it would be prudent to conserve cash,” he said, noting that while there was a possibility of Gamuda selling part of the land for cash, the current economic climate might make it hard for them to get a good price.

Gamuda’s 25 sen per share dividend policy is another major concern.

OSK’s Goh said: “The 25 sen dividend may not be sustainable by our estimates.”

“Maybe they could sustain the 25 sen payout this financial year (ending July 2009), given the special dividend received from (toll operator) LITRAK, a 44.8%-owned associate,” he said.

“However, there is less certainty on Gamuda’s dividend sustainability beyond that. We are more comfortable with a 12.5 sen dividend projection,” Goh added.

By The Star (by Loong Tse Min)