E&O prepares for RM4bil property launches

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) aims to bolster its working capital position by raising RM500mil to prepare for high-end property launches worth RM4bil, said executive director Eric Chan.

The projects would be launched in the coming months amid the recovery in the economy after a dry spell in terms of new launches in the second half of 2008 and part of 2009, he said.

“We have RM4bil worth of sales to be launched but to do this, we need working capital, especially when it is a condominium. Even if we sell 10%, we still have to construct the rest,” Chan said after the company AGM and EGM yesterday.

The property developer will raise its working capital internally by disposing of stocks and non-strategic landbanks to raise RM300mil.

The remaining RM200mil will be raised via a 1-for-2 rights issue which is expected to be completed by November, according to Chan.

The group plans next month to launch its Seri Tanjung Pinang condominium on Penang island, which has a gross development value (GDV) of RM2bil.

In the Klang Valley, it will this weekend open for sale Phase 2 of its St Mary Residences, or Tower A, which has a GDV of RM750mil.

It has also marked up considerably the price of this phase by 25% to RM1,250 per sq ft.

Chan justified this by saying the new phase would be completely fitted out, unlike the previous phase which only had kitchen fittings.

“Phase 2 will come with lighting, right down to wardrobe and curtain railings. To make it easier for buyers, they do not need to pay for loan documentation, unlike the first phase,” he said.

E&O is also preparing to launch its Jalan Conlay condominium, another project at Jalan Yap Kwan Seng as well as an office tower development which forms part of the St Mary project.

The company aims to sell at least 20% of St Mary Residences Phase 2 to foreigners and is currently on a sales campaign in Singapore, Hong Kong and Guangdong, China.

Chan said the company, like any other property development company, needed two years to realise profit. “A profit in 2008 is due to sales in 2006,” he said, adding that the group would, therefore, have to keep the momentum going.

E&O suffered a net loss of RM31.7mil for its 2009 financial year compared with a net profit of RM128.5mil in the previous year.

Chan said the company had a current gearing of 0.79 which would be reduced to 0.46 with the rights issue. This could be further reduced to 0.16 with RM300mil to be raised via the disposal of stocks and non-strategic landbanks, he added. The property developer has total borrowings of nearly RM900mil.

By The Star

Glomac plans projects worth RM550m

Property developer Glomac Bhd is looking to launch at least three new developments for the financial year ending April 30 2010, with a combined gross development value (GDV) of over RM550 million.

Group managing director Datuk FD Iskandar is optimistic that the local property market will improve by the second half of next year to boost sales.

It plans to launch the second phase of its RM180 million Glomac Cyberjaya project by the middle of next month.

The second phase comprises 24 units of shop offices with a GDV of RM50 million.
Glomac bought 8.1 acres of land in Cyberjaya in 2008 and was the first to offer three-and-half-storey shop offices there.

Also in the pipeline is a commercial project on 1.3 acre freehold land in Mutiara Damansara, Selangor, which has an estimated GDV of RM250 million.

The development, surrounded by the commercial hubs of Ikea, Tesco and The Curve, will encompass retail spaces, office suites and a corporate office.

Glomas will also launch the second phase of the Plaza Kelana Jaya, a land that formerly housed the famous Kelana Seafood Centre.

Iskandar said Glomac aims to launch the fourth phase of the Plaza Kelana Centre with a GDV of some RM250 million.

"The development will be on a 3.2 acre freehold land that includes an office block, a neighbourhood shopping mall and office suites," he told Business Times yesterday.

Also in the plans are the launch of another phase at its Saujana Utama township in Sg Buloh, Selangor, in November.

"In this financial year, we are looking to launch at least three new phases," said Iskandar, adding that two phases have already been launched this year with the first sold out and the second up to 90 per cent sold out.

Iskandar also revealed that Glomac is close to acquiring at least two new landbanks before the year-end.

He said the company is talking to several parties to acquire land namely in the Klang Valley for commercial development.

He said the new land will be small in size, but have a high GDV and fast turnaround of about four to five years.

By Business Times (by Rupinder Singh)

Regular complaints of defects should be a wake-up call, construction industry told

PETALING JAYA: Malaysia has a relatively matured construction industry but the quality of the finished product should not be overlooked, Housing and Local Government Minister Datuk Seri Kong Cho Ha said.

“The recent spate of building failures and regular complaints of defects of completed properties should be a wake-up call for all stakeholders of the construction industry,” he said, adding that improving quality entails enhancing efficiency and productivity.

He said this after officiating The Star’s first “Property Fair Kuala Lumpur - Stylish Living” at Menara Star here yesterday.

“The Star’s effort is a good contribution not just for the property market’s growth, but also for the whole construction industry. It can drive the whole supply chain of the building industry,” Kong said.

Also present at the event were Star Publications (M) Bhd executive deputy chairman Datuk Clement Hii, executive director Ng Beng Lye, group managing director/chief executive officer Datin Linda Ngiam and group chief editor Datuk Seri Wong Chun Wai.

Ngiam said The Star has been holding annual property fairs in Penang over the past seven years.

“The amazing response from both exhibitors and visitors to the property fair explains why it is currently the leading property fair in Penang,” she said in her speech at the event.

“With such growing success each year, it only seems right that we should hold a similar one in Kuala Lumpur. But in saying that, there are more compelling reasons that influenced our decision to start one here,” she added.


The property fair will be held from Nov 27 to 29 at the KL Convention Centre in Halls 4 and 5, from 11am to 8pm. Admission is free.

Visitors will get to view the latest offerings by renowned developers involved in building luxury bungalows and exclusive condominiums.

Representatives from participating financial institutions and the Employees Provident Fund (EPF) will also be around to provide assistance.

Ngiam said there will also be talks and forums conducted by industry experts on topics like property investment, feng shui and home inspirations. The fair will be fully supported by The Star’s print, radio and on- line media.

Meanwhile, Ngiam also officially introduced The Star’s StarProperty portal – www.starproperty.my.

This site features the latest on auction listings, news and reviews of local and international properties and lifestyle articles.

“The site which is barely two months old has over a million hits and over 47,000 property listings,” she said.

By The Star

Ireka to tender for RM2.5b infrastructure jobs in Malaysia

Construction group Ireka Corp Bhd has been pre-qualified to bid for more than RM2.5 billion worth of infrastructure and building construction projects in Malaysia.

Ireka, which has been involved in construction since 1967, has bid for almost half the projects, two of them in a joint venture with foreign parties, its executive director Lai Voon Hon said.

Lai said the group will tender for the remaining jobs by the end of its current fiscal year.

"The results are expected to be known early next year and new projects would contribute significantly to our earnings in 2010 and 2011," he said after the group's shareholders meeting in Kuala Lumpur yesterday.
Lai said in future Ireka wants to focus on high-end residential and commercial development, in addition to infrastructure projects, riding on the lower construction material costs.

The company is eyeing government jobs like road and highway construction, housing, and extension of the light rail transit and Sepang low-cost carrier terminal projects.

In Vietnam, Ireka is exploring infrastructure-related projects.

Meanwhile, Ireka director and group financial controller Monica V.H. Lai said the group is expected to do better in the current financial year ending March 31 2010, given the value of jobs in hand.

By Business Times (by Sharen Kaur)

Ireka to maintain RM5mil dividends

KUALA LUMPUR: Ireka Corp Bhd, whose construction order book currently stands at RM964mil, plans to maintain its quantum of dividends for the next few years, says group financial controller Monica Lai.

Ireka shareholders approved a final net dividend of 4.35 sen for the financial year ended March 31, totalling RM5mil and equivalent to about 82% of the year’s net profits. Ireka will announce the ex-dividend date next week.

“Going forward, Ireka’s earnings will be boosted by lower construction costs as the price of building materials has softened. With a moderate gearing level of 0.45 times, we should be able to take on more borrowings for new projects,” Lai told reporters after the company AGM yesterday.

For its first quarter ended June 30, Ireka posted a net profit of RM3.46mil, making it the third straight quarter of profits after earlier losses caused by the sharp surge in building material costs.

The construction company had also said it had been pre-qualified for over RM2.5bil worth of jobs, mostly related to government infrastructure and private sector residential and housing projects in Malaysia.

Ireka, which in the last 3 years has only been involved in projects from its associate company, property developer Aseana Properties Ltd, is now aggressively seeking work from outside the group.

“For the last three years we have relied on work from Aseana due to market conditions which included a shortage of construction expertise and high material prices such as steel bars. But we are now poised to win work from outside the group, having built up the necessary track record and expertise,” said executive director Lai Voon Hon.

Ireka owns 23% in Aseana Properties, which was listed on the London Stock Exchange (LSE) in 2007 as a closed-end fund investing in high-end properties in Malaysia and Vietnam.

Among its projects are the completed i-Zen brand of luxury properties and the on-going SENI Mont Kiara, the latter making up a significant portion of Ireka’s current order book. SENI Mont Kiara, whose sales slowed due to the softening property market since its launch in 2007, had been 60% sold to-date, said Voon Hon.

Weak sentiment on property stocks has also dampened the stock price of Aseana Properties on the LSE, with its share price hovering around 31 US cents, below its net asset value of 91 cents and its initial public offering price of US$1 per share.

Despite the low price, Ireka has no plans of significantly increasing its holding in Aseana Properties or taking the latter private.

“We listed Aseana as a high-end property investment vehicle focused on Malaysia and Vietnam. Many of our investors will not be looking at selling out now as they know the potential (of Aseana),” he said.

Aseana Properties had around US$67mil in cash as at the end of last year.

By The Star

Genting, Simon Property Group in upscale outlet shopping JV

KUALA LUMPUR: The Genting group is teaming up with New York-listed Simon Property Group to venture into upscale outlet shopping in Malaysia under the Chelsea Premium Outlet Centres concept.

Genting said on Wednesday, Sept 30 that its 54.7%-owned Genting Plantations Bhd's unit Azzon Ltd had signed a joint venture agreement with Simon's Chelsea Malaysia LLC to establish the centres.

Under the JVA, Genting Plantations and Simon will form a 50:50 JV called Genting Chelsea Sdn Bhd to invest and operate Premium Outlet Centres in Malaysia.

The first project is the Johor Premium Outlets, to be built in Kulai, Johor, which is set to be the iconic flagship outlet centre in the Southeast Asian retail market.

Johor Premium Outlets will be located at the intersection of two major highways that serves this region and is expected to attract the local residents as well as international visitors from Southeast Asia.

Expected to open in 2011, the centre aims to synergise with Genting’s existing property operations and the group’s leisure and hospitality footprint in the region.

By The EDGE Malaysia

Sunway wins RM147m commercial project

SUNWAY Construction Sdn Bhd (SunCon), a wholly-owned subsidiary of Sunway, has won a RM147.36 million contract from Putrajaya Holdings Sdn Bhd to build a commercial project in Putrajaya.

Under the deal, SunCon will design, construct and complete a 16-storey three-star hotel and an 11-storey office tower on Plot PZ10, Parcel Z, Precinct 1, Putrajaya.

The proposed project is expected to commence on October 7 2009, with completion in three years.

It is expected to contribute positively to the earnings of the group for the financial year ending December 31 2010 onwards.

By Business Times

Iskandar Investment to award RM2b project

CATALYTIC developer of Iskandar Malaysia, Iskandar Investment Bhd, expects to tender out RM2 billion worth of projects in the next 12 months, president and chief executive officer Arlida Ariff said today.

The tenders comprise RM1 billion worth of infrastructure projects under the Ninth Malaysia Plan and another RM1 billion worth of other infrastructure and construction projects, she said.

"These infrastructure and construction projects will likely take six to 24 months to be completed," she told a media briefing on the sidelines of the Ninth Forbes Global CEO Conference.

This will involve infrastructure in Medini and EduCity as well as residential units for students in Newcastle University Medicine Malaysia.

Iskandar Investment currently owns two per cent of the whole Iskandar region which encompasses 2,200 square kilometres of land.

By Bernama