Plans for RM220m housing projects in KK industrial park

KKIP Sdn Bhd (KSB), developer of the Kota Kinabalu Industrial Park (KKIP) in Sabah, will launch four housing projects worth RM220 million within the 1,344.51ha integrated park, its chief said.

From June this year, KSB will offer 750 houses, priced from RM190,000 to RM500,000 each. They include apartments, terraced and semi-detached houses, bungalows and townhouses.

These are the first of a series of houses the company is building at KKIP to facilitate growth, chief executive officer Datuk Chong Hon Len said.

"The Sabah property market is stable. Prices are appreciating in value despite the turmoil. There is demand accelerated by activities at KKIP, and we are optimistic on sales," Chong told Business Times in Kuala Lumpur recently.

KSB, which is owned by the Sabah state Government, was set up in 1994 to manage developments at KKIP, which is a premier growth centre in the Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) region.

KKIP encompasses residential, commercial and industrial zones, which could reap in more than RM15 billion in gross development value over the next ten to 15 years, Chong said.

KSB is projecting a population of 50,000 by the end of the development.

For its fiscal year ending December 31 2008, the company has forecast a revenue of RM100 million from land and property sale, which is higher than previous years, Chong said.

KSB is selling 140ha of industrial land.

"We will continue to build and invest, albeit cautiously. There is no good or bad time in an economic cycle. We just have to be careful. The industrial zone is 75 per cent developed, so the focus will be to strengthen the other two zones," Chong said.

Chong said 137 manufacturing firms and 11 training and research institutions have set foot at KKIP. Around 45 factories are under construction.

KKIP is aimed at players in the resource-based industries, which includes forestry, palm oil, cocoa, agricultural, livestock, fisheries, and silica.

It is also for non-resource based industries such as electronics and electrical, metal and plastic, automotive and transportation, and warehousing.

By Business Times (By Sharen Kaur)

Johor property developers to gain from Iskandar Malaysia

JOHOR BARU: Property developers in Johor stand to benefit in the long run from the development of Iskandar Malaysia, said Real Estate and Housing Developers Association (Rehda) Johor branch chairman Lee Kim Chai.

Lee said under the Comprehensive Development Plan (CDP) 2006-2025, Iskandar Malaysia would be transformed into a metropolis of international stature, thereby ensuring the sustainability of the property market in the state, especially in southern Johor.

“The Federal Government is putting in a lot of emphasis and effort on Iskandar to make it successful,” he said in an interview with StarBiz, adding that several projects by both public and private sectors were already taking shape in Iskandar Malaysia, while some others were being implemented.

Under the Ninth Malaysia Plan, the Government allocated some RM6.83bil for infrastructure projects in Iskandar Malaysia including road building, drainage and river cleaning projects.

Iskandar Malaysia also received a RM1.7bil boost under the recent RM60bil mini budget for the development of infrastructure, hotels, theme parks as well as universities.

“Improvement in road connectivity and travel time are the two main factors that will help attract potential house buyers,” Lee said.

He added that the upcoming Malaysia Property Expo for Johor (Mapex 2009–Johor) was the best platform for developers to market their products amid the economic slowdown.

Mapex 2009-Johor will be held from tomorrow till Sunday at the Johor Baru City Square with 31 developers taking part.

“There are over 8,000 residential and commercial properties worth RM2.7bil in the offing and buyers should take advantage to shop around before deciding to sign on the dotted line,” Lee said.

The last property expo in Johor in November managed to record RM100mil in sales and Rehda Johor was hoping to record a similar figure for the upcoming event, he added.

Iskandar Malaysia, launched on Nov 4, 2006, was the first in a series of economic growth corridors started in the country under former prime minister Tun Abdullah Ahmad Badawi.

The other growth corridors are the Northern Corridor Economic Region, East Coast Economic Region, Sabah Development Corridor and Sarawak Corridor of Renewable Energy.

Located in the southern-most part of Johor, Iskandar Malaysia spans over 2,217 sq km covering Johor Baru, Senai-Kulai, Gelang Patah-Pontian and Pasir Gudang-Tanjung Langsat.

By The Star (by Zazali Musa)

Property assets to sustain SunCity

PETALING JAYA: Sunway City Bhd (SunCity) can count on its portfolio of property investment assets to sustain earnings streams and ride out the slowdown in property sales amid the global recession.

About 75% of SunCity’s operating profit of RM175mil for the first two quarters ended Dec 31, 2008 was from its property investment assets and the balance from property development.

SunCity can look forward to total rental income of RM285mil this calendar year, of which 70% will be from Sunway Pyramid Shopping Mall.

“All our property assets, with total net lettable area of 4.5 million sq ft, are fully tenanted and we are thankful the stable rental income has contributed to the resilience of SunCity during the current difficult times,” SunCity chief financial officer Tan Poh Chan told StarBiz yesterday.

During the second quarter, sales of new property units by SunCity dropped to only RM58mil from RM62mil in the first quarter. A year earlier it recorded RM367mil.

The weaker property development is a drag on the group’s overall performance.

Although SunCity’s property investment, leisure, hospitality and healthcare divisions are still performing quite well, poor property take-up and sales in the past few quarters have badly affected the group’s property development earnings.

The postponement of SunCity’s proposed real estate investment trust (REIT), which was earlier planned for the second half of last year, has been a blessing in disguise for the property group as the severe slowdown in property sales and deferment of project launches by its property development division would have severely affected its income streams.

The listing of SunCity REIT was postponed when the local economy and stock market were affected by the deepening impact of the global crisis.

With assets valued at RM3.7bil, the proposed REIT would have been the country’s largest.

Among the assets to be injected into the REIT were the Sunway Pyramid Mall, with 1.7 million sq ft of net lettable space, the 4.8ha Monash University campus, Sunway University College, Sunway Carnival Mall in Penang and Tambun Hypermarket in Ipoh. Other investment-grade properties to be included were the Sunway Resort Hotel & Spa, Sunway Pyramid Hotel and Menara Sunway.

Following the deferment of the SunCity REIT, the company’s management reclassified the assets to be injected into the proposed REIT from “non-current assets held for sale” to fixed assets and investment properties of SunCity.

An analyst with a local brokerage said the earliest listing of the SunCity REIT would be around the first half of next year if the local capital markets had recovered by the end of the year.

“Once the market recovers and the window opens again, it will only take a few months to do the necessary preparation for the listing ,” he said.

By The Star (by Angie Ng)

Brooke Dockyard completes RM100mil Shell project

KUCHING: Brooke Dockyard and Engineering Works Corp (BDEWC) has completed a RM100mil project involving living quarters and helideck for Sarawak Shell Bhd.

The living quarters, under a project awarded on Aug 6, 2007, is scheduled to be installed offshore Bintulu by mid-May and ready for use by end-June.

The new lightweight stressed skin 42-bed quarters will replace the existing 14-bed emergency living quarters, according to the company.

Sarawak Deputy Chief Minister Tan Sri Alfred Jabu graced the living quarters’ load-out ceremony held at Sejingkat, Jalan Bako, yesterday.

BDEWC general manager Zuraimi Sabki said the company secured the project from Sarawak Shell under a collaboration with Sweden’s Emtunga Offshore AB, a well-known lightweight stressed skin living quarters specialist.

Zuraimi said Emtunga started the detailed design in November 2007 and fabrication works began in February last year, and these were then assembled into complete living quarters and helideck by BDEWC from August last year.

“The living quarters project clocked 500,000 man-hours without any lost-time incident,” he said in his speech at the event.

The project is one of three that Sarawak Shell has awarded to BDEWC with an earlier project involving living quarters installed offshore Bintulu in November last year.

Zuraimi, who is also BDEWC chief executive officer, said it had completed 14 offshore modules, seven sub-structures and three living quarters, with almost 60% of them for Sabah Shell and Sarawak Shell in the past 12 years.

“We have set ourselves to be an important regional player, especially in the engineering works of the oil and gas industry. I believe Brooke Dockyard can continue to play an important role as well in Sarawak’s human resource development, particularly in the high-end engineering sector,” he said.

By Bernama

Healthpark to complement Nusajaya development

An artist's impression of the Afiat Healthpark @ Nusajaya complex

JOHOR BARU: Property developer UEM Land Bhd wants to position its Afiat Healthpark @ Nusajaya as a holistic and fully-integrated development with all the components of a world-class healthcare centre, said managing director and chief executive officer Wan Abdullah Wan Ibrahim.

Facilities in the park would cover three distinctive areas, namely modern medicine, traditional and complementary medicine and wellness, he said.

“We also anticipate an increase in public demand for better healthcare services and facilities within Nusajaya in the future,” Wan Abdullah told StarBiz in an interview.

He added that as the master developer of Nusajaya with an area of almost 9,662ha of development-ready freehold land, it was vital for the company to make the area thrive.

UEM Land could not just build houses in Nusajaya without any supporting facilities such as education, business, health and leisure, if it wanted to attract local and foreign investors, he added.

Nusajaya is one of the five flagship development zones in Iskandar Malaysia.

The other zones are JB City Centre, Western Gate Development, Eastern Gate Development and Senai-Skudai.

Located on 27.51ha, Afiat Healthpark @ Nusajaya is a dedicated park with facilities such as private specialist clinics, a private hospital, a health-screening centre/outpatient clinic, dialysis centres and even a traditional chinese medicine (TCM) academy as well as a nursing college.

“We have succeeded in getting modern medicines via Columbia Asia (Sdn Bhd) with its 80-bed hospital scheduled for opening in 2010,’’ Wan Abdullah said.

Last April, Columbia Asia bought 1.09ha in Nusajaya from UEM Land’s subsidiary Nusajaya Medical Park Sdn Bhd to set up the hospital.

UEM Land is currently talking with several operators, including from China and India, to set up TCM facilities at the healthpark.

A public-listed company has also shown interest to set up a retirement village for wealthy senior citizens similar to the one in Florida, United States, according to Wan Abdullah.

“We are not so much looking for medical tourism per say as the role comes under Khazanah or IIB; we only build the facilities and lease them to interested parties or healthcare operators,’’ he said.

By The Star (by Zazali Musa) (Posted on 14/4/2009)

RM70m mall for Wangsa Maju to open in July

Malaysia may appear to have one too many malls and some will question the wisdom of opening another when sales are falling.

But it is probably a good move if the opening fills an obvious void.

Wangsa Walk, a RM70 million mall in Kuala Lumpur that opens in July, expects to satisfy a long-overdue need for residents of Bandar Wangsa Maju in Kuala Lumpur.

Its owners also plan to recoup their investment and start making money in half the time a typical mall takes.

The mall, which is being developed by MSL Properties Sdn Bhd in Wangsa Maju, has managed to fill up almost all its space. It will have a 92 per cent occupancy rate at a time when most retailers have opted to slow expansion.

Wangsa Walk, which takes up 273,243 sq ft, or roughly a quarter of Suria KLCC, will serve about 250,000 people living within a 4km drive.

Richard Chan, director of RCMC Sdn Bhd, the consultants for the project, said the owners were initially worried about the timing of the opening.

"However, of late, we have been signing contracts daily. We have already signed up for 92 per cent occupancy," he said.

MSL Properties general manager Tan Ching Meng is bullish about the development and expects to recoup investment in five and a half years. Its RM70 million investment does not include the cost of land.

The 26-year-old MSL Properties is the main developer of the Wangsa Maju township.

Singapore-listed MCL Land Ltd holds 50 per cent of MSL Properties. Saujana Consolidated Bhd holds 30 per cent, while Landmarks Bhd has the rest.

"We will be happy to make RM13 million in gross revenue in the first year and RM15 million the following year," Tan told Business Times in an interview.

Rental at the mall is tagged at RM8 to RM15 per sq ft including service charge.

Tan is not worried about international names like Carrefour and Jusco, both a stone's throw from Wangsa Walk, as they differ in terms of design, concept and retailers.

In fact, Wangsa Walk does not have a department store.

The mall is "a strong destination built up on things people like to do", Tan said. It has thus removed the box-like feature and accommodated more of a street mall concept.

Wangsa Walk will have a 400m long walkway, an amphitheatre that can seat 100 and space to accommodate a flea market with more than 200 stalls.

"We have an al fresco concept as people nowadays want to see and also be seen. Our concept sees the solid walls crumbling and giving way to visibility," Tan added.

Cold Storage, Celebrity Fitness, TGV Cinema, Popular Bookstore and a 32-lane bowling alley are among the 170 retailers that the mall will house.

The mall on a 5.7ha site has a gross built-up area of 495,117 sq ft. It forms the first phase of an integrated development that will also have offices and serviced residences, slated for beyond 2014.

There is also enough land to expand the mall if demand is strong.

By Business Times (by Vasantha Ganesan)

More properties under receivership this year

PETALING JAYA: Auctioneers are seeing an increasing trend of properties under receivership this year, as more owners are expected to have financial difficulty amid the continuing global financial crisis.

They said the overall supply of auction properties in the last few months had already risen by 10% to 20% compared with normal times.

Property Auction House Sdn Bhd general manager Danny Loh said medium and low-cost houses were hit the hardest.

“The number of (auction) cases for medium-cost apartments costing RM50,000 to RM150,000 has risen by 15%, while for high-end condominiums it is up by 10%. For offices the figure is up by 20%,” he told StarBiz.

He said landed properties had the smallest increase of 5% and they were saleable.

Loh handles about 100 auctioning cases per month in the Klang Valley.

He estimated the number of bidders had also dropped by 30% because banks were more stringent on financing and buyers were careful about buying big-ticket items.

He said about 60% of bidders were investors, while the remaining were buying for their own use. Both categories were equally split during normal times.

Another auctioneer told StarBiz that her company’s auctioning activities had risen from about five cases a month before the economic crisis to between five and 10 cases now.

She said properties under auction were usually priced 20% below the market value.

In the auctioning process, bidders are required to deposit 5% or 10% of the property value. In the first auction, the property price is based on the current market value. Subsequently, the price will be reduced by 10%, and another 10% in the third auction. She said the current trend was that bidders wait for the third auction.

Successful bidders would have 120 days to settle the difference between the deposit and the final price.

J. Thilagamraj Auctioneers Sdn Bhd legal manager Nithiyawathi Subramanium, who saw a 20% jump in properties under receivership over the last two months, said demand for auction properties remained the same.

She said most of the buyers were investors, particularly real estate agencies.

“They buy for investment,” she said, pointing out that agencies would recondition purchased properties for resale or rental.

She observed that more properties in Petaling jaya, Rawang and Shah Alam were coming into the auctioning market.

By The Star (by K.C.Law) (Posted on 14/4/2009)

Govt ramping up construction sector

PETALING JAYA: The construction industry, which saw a dearth of jobs last year, has caught a glimpse of up-coming jobs from the stimulus spending this year.

This will be counter-cyclical in the sense that while the industry shrank last year, it may expand in a year of economic slowdown as the Government ramps up construction to offset negative growth in other sectors.

Analysts sense this impending recovery. CIMB Research last week said IJM Corp Bhd was eyeing nine major contracts worth at least RM9.4bil in total.

Eight are domestic projects. These include the job to build a hospital in Putrajaya, two packages involving the Pahang-Selangor interstate water project, the West Coast Expressway, the new low-cost carrier terminal in Sepang, work related to the Penang Second Bridge project and upcoming contracts to extend the existing two light rail transit (LRT) lines in the Klang Valley.

All these contracts are in various stages of negotiations, and tenders for some of these projects are yet to be called.

Other companies were also reported to be in the running for some of the projects being targeted by IJM. The prospective IJM job list gave some insight into the value of big domestic construction works that are in the pipeline.

Recently, WCT Bhd was reported to be in the process of finalising some RM500mil worth of jobs in Sabah.

There is also talk about a new LRT line being planned to link Kota Damansara and Cheras that is estimated to cost RM30bil.

This project, like some of the other upcoming jobs, should attract fierce bidding from the big contractors when it becomes available.

While the prospect of big projects coming in has fuelled investors’ imagination in the past weeks, an analyst at RHB Research Institute has a more sober view of the sector.

“Generally, we continue to find it difficult to be positive on the sector over the short term,’’ the firm said in report yesterday.

The key reasons for its lack of enthusiasm centred on the argument that the projects planned under the two stimulus packages were mostly small in size.

The lack of availability of funds at the right price also remained a major hurdle for most private financing initiatives to take off.

RHB Research said that as focus shifted to rolling out projects under the two stimulus packages, it “believed certain highly anticipated mega projects” under the Ninth Malaysian Plan might be put on the backburner, or postponed to the 10th Malaysia Plan.

The firm, however, acknowledged increased investors’ appetite for risk, and had assigned higher target prices for construction stocks under its coverage to reflect this.

Fund managers are aware of this mood of recovery. Hence, share prices of the big contractors which have been rising, continued to edge higher yesterday, as they shrugged off concerns that prices of counters like IJM, Gamuda Bhd and Malaysian Resources Corp Bhd (MRCB) might have gone up too fast and too soon.

A key factor in driving up investors’ buying binge in recent weeks was high expectation that the pump-priming agenda of the new administration of Prime Minister Datuk Seri Najib Tun Razak would result in increased big construction job flow in the coming months.

Analysts, however, seem to prefer to wait and see if some of these “highly anticipated” projects materialise first.

“We maintain our ‘neutral’ call (on the construction sector) as there is a lack of re-rating catalysts in sight,’’ ECM Libra Investment Research said in an update. “Key risks going forward include below-trend order book replenishment as well as implementation risks.’’

But investors are already betting that companies like IJM, Gamuda, MRCB and WCT will emerge winners.

IJM’s share price climbed six sen to RM4.70 yesterday – its highest level since mid-September last year. The stock has risen 67% since the start of the year, but is still a long way off its peak of RM8.82 reached in February 2007.

Shares in Gamuda and MRCB advanced yesterday, with both stocks now chalking up year-to-date gains of 29% and 45% respectively. WCT, whose shares were clobbered in January, has also recovered strongly.

By The Star (by Izwan Idris) (Posted on 14/4/2009)

JLand gets offer from JCorp and Damansara Assets

KUALA LUMPUR: Johor Land Bhd (JLand) has received a voluntary takeover offer from Damansara Assets Sdn Bhd and Johor Corp (joint offerors) to acquire the remaining 58.1 million shares of RM1 each in JLand not already owned by them for RM1.55 per share in cash.

In a filing with Bursa Malaysia yesterday, JLand said its board of directors “does not intend to seek an alternative person to make a take-over offer for the offer shares.”

“In accordance with the Malaysian Code on Take-Overs and Mergers, 1998, the board will appoint an independent adviser to advise the independent directors and minority shareholders of JLand in relation to the offer,” it said in a statement.

As of March 31, the joint offerors held 172.9 million JLand shares or about 74.85% stake.

Johor Corp group chief executive Tan Sri Muhammad Ali Hashim directly holds 100,360 shares representing about 0.04% of JLand.

JLand closed five sen higher at RM1.52 yesterday with 375,200 shares changing hands.

By The Star

JCorp, Damansara Assets seek to take Johor Land private

JOHOR Corp Bhd, along with Damansara Assets Sdn Bhd, its joint-offeror, plans to take Johor Land Bhd private for RM90 million cash.

The offerors plan to buy the remaining 58.1 million shares, or 25.15 per cent stake they do not yet own in Johor Land, for RM1.55 a share, representing a 9 per cent premium against yesterday's closing price.

"The joint offerors do not intend to maintain the listing status of Johor Land," Johor Land told Bursa Malaysia yesterday.

As at March 31 2009, Johor Corp, a company with investments in the healthcare, property development and plantation sector, owned 74.85 per cent of the property developer.
Its joint-offeror Damansara Assets - a company that has businesses like quarry operations, property management services, real-estate investment management and cleaning services - does not own any stake in Johor Land.

The proposed privatisation is still pending approval from the Securities Commission and the Ministry of Finance.

Johor Land's earnings almost tripled to RM19.18 million in 2008. However, its share price in 2008 fell by 45 per cent from RM1.28 a share early last year to 70.5 sen a share at the end of 2008.

The company's share price has regained strength this year, more than doubling to RM1.42 share.

Johor Land was listed on the main board of Bursa Malaysia since 1996

By Business Times

142 builders, 479 directors blacklisted

A TOTAL of 142 companies and 479 directors were blacklisted as at March 13 after their housing projects stalled.

Housing and Local Government Minister Secretary-General Datuk Ahmad Kabit said the action was taken while waiting for the companies and directors be charged in court.

"From 2006 to March 31, 537 cases were taken to court for breaking regulations under the Housing Development (Control and Licensing) Act 1966," he said in a statement today.

He said the names of the companies and directors already convicted in court are posted on the ministry's website, www.kpt.gov.my.
Ahmad said that up to February, 156 housing projects by private developers had been categorised as stalled.

The states with the most stalled housing projects were Selangor with 39, Johor 32 and Negri Sembilan 20, he said.

He said that to overcome the problem, the Special Task Force for the Rehabilitation of Stalled Housing Projects comprising senior officers from the relevant government agencies and private sector representatives had been set up.

By BERNAMA