Novotel Hydro Majestic Hotel put up for sale

Hotel operator and property developer Pulai Springs Bhd has put its two-year-old Novotel Hydro Majestic Hotel in Kuala Lumpur up for sale, sources say.

It is believed that the owners are asking an estimated RM200 million for the four-star 291-room hotel located along Jalan Kia Peng, a stone's throw from the iconic Petronas Twin Towers.

According to sources, Pulai Springs has received several offers for the hotel.

One source said that the Johor-based company had in fact identified a buyer. Pulai Springs officials could not be contacted for confirmation.

It is also unclear why it wants to sell the property. It is probably trying to cut debt. Its current liabilities, or what it needs to pay in a year, stood at RM193.6 million as at December 31 2008. In contrast, its current assets amounted to RM71.4 million.

Novotel Hydro Majestic is operated by France's Accor group.

Pulai Springs' main property is the Pulai Springs Resort in Johor. It also operates the The Pulai Desaru Beach Resort.

In the financial year ended December 31 2008, Pulai Springs' net loss widened to RM8.36 million on revenue of RM80.81 million.

Its resort and hotel division recorded net loss of RM4.69 million on revenue of RM67.36 million.

According to its 2007 annual report, Novotel Hydro Majestic contributed RM20.7 million in revenue.

Penang's Mah family, which runs Hydro Hotels Sdn Bhd, bought the abandoned hotel building and completed it.

It was sold to Pulai Springs for RM10 million in 2006. The price took into account the fair market value of the land and hotel of RM130 million and the total development cost of the hotel of RM120 million.

Pulai Springs was listed on the main board in December 2002.

By Business Times

Selangor Prop to clear residential stocks

SELANGOR Properties Bhd (SPB) wants to clear the residential property stocks in its current projects before launching new development phases as sales have plunged almost 50 per cent.

"People are more cautious. Average sales used to be 20 to 30 units a month but now it has been reduced by 50 per cent despite attractive interest rates," financial controller Lee Boon Kian said after SPB's annual general meeting in Kuala Lumpur today.

SPB has two ongoing projects at Bukit Permata in Gombak and Selayang Mulia, with both developments comprising about 40 hectares each.

The Bukit Permata development is 75 per cent completed while Selayang Mulia is half completed.

Lee said out of the residential 560 units in Bukit Permata, 270 units were unsold.

"There are plans to launch the next phase of development in Bukit Permata and Selayang Mulia and another project in Ulu Langat but these are all in the planning stage," he said.

According to Lee, the new phases and project may be launched late this year or early 2010.

He said the Ulu Langat project will be a mixed property development.

For the financial year ended Oct 31, 2008, the group recorded a net profit and minority interests of RM118.6 million based on a turnover of RM210.6 million.

On the outlook, Lee said: "We can't match that kind of profit (for the current financial year) as part of last year's profit came from foreign exchange gains."

Besides property development, SPB is also involved in the education business.

On talks that the company will be privatised, SPB corporate affairs manager Chong Koon San said there was no such plan.
Asked if SPB planned to acquire more land, Lee said it was looking for such opportunities in the Klang Valley "but prices have not come down that much yet."

By Bernama

Nilai's four-star hotel nears completion

PK Resources Bhd is investing RM58 million to build a four-star hotel adjacent to the Nilai Springs Golf & Country Club in Putra Nilai, Nilai Springs Resort Sdn Bhd general manager G.K. How said today.

Construction of the nine-storey 183-room Nilai Springs Resort Hotel is progressing smoothly since last year and is nearing completion.

"According to our plan, we are to do the soft launch on June 8. The hotel is slated to start full commercial operations in September," he said.

How said the hotel would have the "Azuma Fusion Restaurant" serving a variety of Japanese, Korean and Chinese food and western food by "Springs Cafe".

The stall-styled "Golfers' Terrace" will serve local cuisines. There are also "Fairway Lounge" and "Splash Station".

The hotel also has facilities for golfing on a 27-hole golf course, badminton, tennis and squash courts, swimming pool, gymnasium, jaccuzi, sauna, spa and a health centre and children water play park.

"Other facilities are a ballroom that can accommodate 550 people at one time and 12 meeting rooms. We also have facilities for team-building such as wall climbing, rappelling and flying fox, he said.

How said the accommodation package at the hotel was open to all including flight transit passangers, cabin crew, golfers, foreign tourists, businessmen and Formula One riders and spectators during the Petronas Malaysia Grand Prix F1 championship at the Sepang International Circuit.

How said under the current uncertain global economic climate, Nilai Springs Resort, a wholly-owned subsidiary of PK Resources, was optimistic the hotel investment was a viable and profitable venture.

"I believe after the challenges and pressures posed by the global economic turmoil end in two years, we expect a good occupancy of 75 to 80 per cent.

"For the next two years, our occupancy projection is 55 and 60 per cent. We are confident of achieving this target as the hotel has only 183 rooms.

"In fact, we have already received bookings from several F1 racing teams coming for the F1 championship at the Sepang International Circuit next year.

The optimism to woo hotel guests stems from the hotel's strategic location proximity to the KL International Airport in Sepang, Low-Cost Carrier Terminal, Sepang International Circuit, Cyberjaya Intelligent City and Putrajaya federal government administration centre.

PK Resources (formerly known as (Peladang Kimia Berhad), a property developer, is currently focusing on Putra Nilai (new name for Bandar Baru Nilai) township via its wholly-owned subsidiary BBN Development Sdn Bhd.

Putra Nilai is one of the largest townships within the Multimedia Super Corridor and strategically located in the vicinity of the Kuala Lumpur International Airport, Putrajaya and Cyberjaya.

Spanning over 6,200 acres of freehold land, Putra Nilai is today a diverse, modern township with a multitude of residential, commercial, recreational, educational and administrative amenities and a well landscaped environment.

By Bernama

Malton wins RM175m mall job

MALTON Bhd through its wholly-owned subsidiary, Domain Resources Sdn Bhd, has been awarded a RM175.0 million contract to build a seven-storey shopping mall in Petaling Jaya, Selangor.

In a filing to Bursa Malaysia today, the company said the project will start in August this year.

It is scheduled for completion in November 2011.

The project is expected to contribute positively to the earnings and net assets of the group.

By Bernama

Still some shine in Sunway City

ECM Libra Research has reaffirmed its buy call on Sunway City Bhd albeit with a lower target price of RM2.96 (RM3.60 previously) on expectation that the property sector would be finding a floor soon from which steady recovery can be built upon.

Like most property developers, Sunway City has seen demand for its properties take a tumble amid fast deteriorating economic conditions.

However, ECM expected work progress to pick up in the months ahead following the decline in building materials prices. Sunway City’s property development earnings in the near term will be underpinned by strong unbilled sales of RM869 million which is more than 1.2 times property development revenue in FY08.

The research house added that recurring income from its property investment division was also looking strong having more than doubled since the completion of the expansion of Sunway Pyramid and opening of Sunway Carnival in late 2007.

“We expect 49% of its Ebitda (earnings before interest, tax, depreciation and amortisation) in FY09 to come from property investment. Its jewel in the crown is Sunway Pyramid shopping mall which is contributing over 70% of Ebitda from property investment,” it noted.

ECM also said that it was only a matter of time before Sunway City becomes the largest Malaysian real estate investment trust (M-REIT).

“While the company’s plan to list its vast investment properties into a REIT last year was derailed by the global economic downturn, we remain optimistic that this will happen once confidence returns to the capital market.

“Based on our estimate by using a cap rate of 7%, the size of its REIT could be around RM3.1 billion which will put Sunway City as sponsor of the largest REIT in Malaysia,” it said, noting when that happens, intrinsic values of its properties would be unlocked, adding 45 sen per share.

Considering its resilient property investment earnings and potential value enhancement upon listing of its REIT, ECM said Sunway City was significantly undervalued, trading at a valuation of only 0.5 times its book value — equivalent to the valuation last seen during the minor property downturn in 2001.

“Furthermore, Sunway City is a good high beta play on recovery of the property sector. Despite its resilient earnings from property investment, its beta of 1.37 is the highest among property investment vehicles such as KLCC Property, IGB, KrisAssets as well as REITs,” said the research house.

Despite having gained 37.2% over the last one month, ECM believed Sunway City still has further upside potential due to improving investor sentiment of late.

“Further upside will be supported by our revised net asset value (RNAV) estimate of RM5.48 as well as positive earnings growth delivery and announcement of REIT listing,” it added.

Sunway City climbed 13 sen to close at RM2.19 yesterday.

By The EDGE Malaysia

Rehda: Lifting of 30% bumiputra equity will encourage competition

KUALA LUMPUR: The Real Estate and Housing Developers’ Association Malaysia yesterday welcomed the lifting of 30% bumiputra equity condition on 27 services sub-sectors.

Its president Datuk Ng Seing Liong said the liberalisation would have a positive impact and attract more foreign investments.

“The liberalisation will not only promote Malaysia as a hub for investors to carry out business but also encourage a healthy and competitive environment among local entrepreneurs, especially during this softening global economy,” he said in a statement.

Ng said the move would also help grow businesses and, in turn, boost demand for real estate.

He hoped that the housing and property development sector would also be liberalised in the future.

Meanwhile, the Malaysian Investors Association also welcomed the move.

President Datuk Dr P.H.S. Lim said many foreign multinational companies (MNCs) preferred to have 100% equity ownership in order to have a free hand in their corporate management.

He said MNCs also found it hard to attract good partners.

Lim said Malaysia needed further liberalisation of investments following the globalisation of the economy.

He said that in the mid-1980s, the country was in pole position when it came to foreign direct investments because at that time, China and other Asean countries had poor infrastructure and were not competitive.

“Today, these countries have advanced and are competitive,” he said.

By Bernama