Re-orienting Penang as heritage destination

For many decades, tourists to Penang tended to give George Town's heritage a miss, and headed instead straight to the beaches.

Locals compounded this situation by either ignoring the city's cultural charms or neglecting them altogether.

However, a homegrown heritage movement - the Penang Heritage Trust (PHT) - kept plodding quietly and sometimes, rather vocally on the need to not only respect, but also give a second look to George Town's unique identity, architecture and traditions.

It is the efforts of these tireless crusaders from the PHT that was instrumental in the international recognition conferred on George Town two years ago, when the inner city was inscribed on the United Nations Educational, Scientific and Cultural Organisation (Unesco) World Heritage List.

Since then, a new air seems to have been infused in George Town, where investors are recognising the potential of heritage tourism.
The old formula of waxing lyrical and positioning Penang as a beach resort with sun and sea and pristine skies can now be replaced with selling the state as a cultural tourism destination.

Private sector initiatives in recent years to restore and rehabilitate pre-war buildings in George Town's inner city has seen new life into what used to be derelict and run-down structures.

While some locals and participants of the Malaysia My Second Home programme have begun to invest in shophouses and call them home, others have seen the potential of housing their businesses in these solid buildings.

In place of empty and neglected shophouses are now charming cafes, restaurants, art galleries and boutique residences.

The government's property market report for 2009 showed that a total of 164 pre-war properties (totalling RM74.22 million) were transacted in Penang during the first six months.

This is in contrast with the 120 pre-war properties worth RM64.45 million transacted in the state during the corresponding period in 2008.

To ensure that investors continue buying into heritage properties in Penang, efforts must be put in place to promote these dwellings when tourism players go abroad to market the state.

Cultural heritage tourism can be a major contributor to the state's coffers if an integrated approach is adopted.

While incentives should not only be given to heritage tourism players, the state must do its homework in better understanding how culture, heritage and the arts can be appealing as tourist destinations.

By "rediscovering" culture as an important marketing tool to attract travellers with special interest in heritage and arts, the spinoffs can be significant.

Heritage tourism, if promoted responsibly and correctly, can help not only preserve the island state's cultural heritage but also facilitate harmony and better understanding among people.

The move will also support culture, help renew tourism and more importantly, serve as a fresh take in branding Penang instead of competing with other island resorts which are miles ahead of the game in selling its sun, sea and skies.

By Business Times (by Marina Emmanuel)

Young Singaporean businessmen see potential in Iskandar Malaysia

JOHOR BARU: Young Singaporean entrepreneurs in small and medium industries (SMIs) are optimistic about investing in Iskandar Malaysia, especially in supporting businesses such as the services and logistics sectors.

Singapore’s National Youth Council member Eng Tok Ching, who led a delegation of 15 entrepreneurs to visit the Pulai parliamentary constituency located within Iskandar Malaysia, said the economic region presented a lot of potential investment.

“It is certainly a very exciting project that we are confident of investing in.

“Given Malaysia’s close relations with Singapore, we feel that entrepreneurs from both countries can benefit from this mega project,” he told reporters after visiting the economic region here yesterday.

Eng said among the attractive investment prospects was the waterfront project, in which both countries could cooperate to develop.

He cited successful western projects such as the Niagara Falls, which was a joint development between the United States and Canada.

“Both counties should look into the possibility of developing the waterfront together. There will be abundant opportunities for businesses from both countries,” he said.

Pulai MP Datuk Nur Jazlan Mohamed, who hosted the Singaporean delegation, said the number of such informal visits should be increased in order to shed more light on Iskandar Malaysia, particularly among the young entrepreneurs.

“I hope that such visits can foster better ties between businesses of both countries and subsequently lead to more business opportunities.

“Such visits are a catalyst towards sparking interest to invest in the economic region,” he said.

He added that there should be no reason for businesses in Singapore not to consider investing in Iskandar Malaysia as the operating costs there would be much cheaper compared to that on the island republic.

Nur Jazlan said more efforts should also be made to attract multinational companies based in Singapore by generating more awareness on the economic region.

“These companies have heard about the mega project but have no proper information. We should generate awareness by organising more visits to the economic region,” he said.

By The Star (posted on 4April2010)

Wulf & Partner plans regional office in Malaysia

GERMAN architecture company Wulf & Partner plans to open a regional office in Kuala Lumpur by as early as this year, to tap into the vast number of opportunities available in Malaysia and other Southeast Asian countries.

"We are bringing along our expertise in architecture to tap opportunities, especially in Malaysia," said Kai Bierich, one of the company's three partners.

Wulf & Partner is eyeing, among others, a piece of the massive development on 26.3 hectares of prime land in Jalan Duta, Kuala Lumpur, by the Naza group.

The project includes the construction of a RM628 million trade centre.
"We heard that the Malaysian government, through Matrade (Malaysian External Trade Development Corporation), wants to build a new trade centre to be developed by a local company.

"Maybe we can share our expertise with the local company for that development or propose to do some business consultation as a start," Bierich said in an email.

Senior Wulf & Partner executives may visit Malaysia next month to pitch for local jobs as well as scout for a site to house its regional office.

Naza group recently sealed a building-for-land deal with the government, allowing it to develop the 26.304 hectare plot in return for building the RM628 million trade centre for Matrade.

The trade centre and other projects planned on the plot would have a combined estimated gross development value of RM15 billion over a 10-year period.

The project's first phase will comprise a 90,000 square metre trade centre on 5.3 hectares.

The trade centre is set to be the largest exhibition and convention centre in the country.

There will also be a hotel, shopping mall and office tower.

Bierich said Wulf & Partner is also keen to cooperate with other local developers. "Maybe we can look for some other upcoming projects by the Malaysian government."

Wulf & Partner's track record includes planning and designing the Stuttgart Trade Fair Centre in Germany, which was built at a cost of nearly euro1 billion (RM4.41 billion).

With a unique design structure, the 105,200 square metres Stuttgart trade centre has hosted more than 50 exhibitions a year since it opened its doors in 2007.

In Asia, Wulf & Partner is currently taking part in a euro100 million (RM441 million) mixed development project in Chongqing, China.

By Business Times (by Zuraimi Abdullah)

Cambodia approves foreign property ownership

Cambodia's parliament on Monday approved a law allowing foreign ownership of property such as apartments and office buildings, in a measure intended to increase economic growth.

The draft law, which will permit foreigners to buy leaseholds on buildings and apartments, but not own the land beneath them, was passed when 85 of 96 members of parliament who attended the Monday meeting voted in favour.

Land management minister Im Chhun Lim told the national assembly the law would boost the kingdom's real estate market and bring in more foreign investment. The law will take effect after approval from Cambodia's Senate and promulgation from King Norodom Sihamoni, which are both considered formalities.

Under old rules, foreign property investment could only be made through the name of a Cambodian national and many were unwilling to risk losing their assets to potentially unscrupulous local partners.

The cash-strapped country's investment law was amended in 2005 to allow foreign ownership of buildings but the legislation was never implemented and the initiative foundered.

Despite the restrictions, billion-dollar skyscraper projects and sprawling satellite cities promising to radically alter Phnom Penh have bloomed over the past few years.

But many projects have been halted or slowed down as Cambodia was buffeted by the world financial crisis after several years of double-digit growth, fuelled mainly by tourism and garment exports.

By AFP

REIT players hope for better year

PETALING JAYA: After two quiet years in the local real estate investment trust (REIT) market, industry players are hoping for a better year in 2010 through more active retail interest, asset expansion plans, and entry of new players.


"Since the global financial crisis, there has been a game change on the regulatory environment that is helping REITs"- MRMA PROTEM COMMITTEE CHAIRMAN STEWART LABROOY

According to Malaysian REIT Managers Association (MRMA) protem committee chairman Stewart LaBrooy, news of some existing REITs’ plans to grow their portfolios after a two -year hiatus is encouraging.

Quite a number of REITs have plans to expand their asset portfolio, with expansion by UOA REIT, AmanahRaya REIT and Al-Aqar REIT to involve new investments of RM1bil.

He said REITs would have better upside yields accretion potential if they had steady portfolio expansion through regular strategic asset acquisitions.

On whether raising enough funding for their asset expansion plans still posed a challenge to REITs, LaBrooy said: “Since the global financial crisis, there has been a game change on the regulatory environment that is helping REITs and capital markets cope with issues like faster capital raising and more self regulation.”

“Although under existing Securities Commission (SC) rules REITs can place out new units of only up to 20% of their unit base and it can be done only once every 12 months, the SC is prepared to grant specific approval to REITs to raise additional capital within 12 months on a case to case basis,” he told StarBiz.

It is possible that with the upcoming capital raising plans and new listings, there is potential for the market size to be increased to RM18bil from the current RM8bil.

LaBrooy said if the listing of a few more sizeable REITs took place by this year-end, it would further add to the depth and liquidity of the market.

The upcoming REITs include the Sunway REIT which is estimated to have asset value of around RM4bil and Malaysia’s first cross-border REIT, the RM1bil Qatar REIT.

“The coming onstream of these new players will inject a lot of liquidity into the market. This will create more excitement in the REIT sector in terms of size and asset class diversification and should place REITs on the radar of more local retail investors and larger foreign funds,” added LaBrooy, who is also Axis REIT Managers Bhd chief executive officer.

Currently, retail investors only account for 10% to 15% of the total REITs’ market capitalisation of close to RM6bil. The biggest portion comes from institutional investors who account for close to 60% and REITs promoters at 25%,

To promote greater trading interest and volume for REITs, the target is to raise the retail portion to 40% of the market capitalisation.

“With the huge liquidity in the local system now, there is huge potential to expand the retail interest for REITs,” LaBrooy said.

He added that retail investors were generally ill informed of the benefits of investing in REITs. “Investor education is essential and as a result the MRMA, has undertaken to conduct an investor outreach programme. So far we have conducted public roadshows in Penang, Ipoh, Klang Valley and Malacca. Our next roadshow will be held in Kuching on May 8.”

LaBrooy said to make REITs more popular with the retail investor, there was a need for more liberalisation on the regulatory front and the removal of the withholding tax for individuals.

Currently, both local and foreign retail investors have to pay 10% witholding tax to the Government.

He said the recently established MRMA, with nine out of the 11 REIT managers as members, would engage the regulators to overhaul the prevailing regulations and speak as an industry body on tax issues affecting REITs in time for the 2011 budget.

On challenges ahead, LaBrooy said: “The biggest challenge for local REITs is to reach a size of US$500mil and grow beyond this. This is the minimum requirement if we are to attract foreign funds to our market and has to be an aggressive strategy for each manager.

“To achieve this, the REITs have to have four conditions in place – stock price that trades at a premium to net asset value (NAV), so that capital can be raised in a non- dilutive manner; an identifiable pipeline of new assets to acquire; market yield that is achievable at the time of acquisition; and a recovery in the bond market so that new sources of financing can be obtained without reliance on bank lending,” he pointed out.

By The Star (by Angie Ng)

Malaysia's building sector on the right track

The Construction Industry Development Board (CIDB) is optimistic that the country's construction industry will achieve world-class status by 2015.

Its chief executive officer Datuk Hamzah Hasan said based on the Construction Industry Master Plan 2006-2015, the sector is on track to reach its target.

The growing number of Malaysian companies embarking on projects overseas over the last two decades provides a further boost to this.

Majority of the projects are in the Middle East and North Africa, mainly in Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Libya.
The Middle East is the largest market where 51 projects worth some RM30 billion are ongoing.

"This is more than India where we have 23 ongoing projects valued around RM7 billion and 22 projects in Asean worth RM5.7 billion. The numbers are increasing," Hamzah told Business Times.

"We have been instilling confidence among our construction players that they are at par with or even better than their counterparts internationally. This has made them more willing to venture overseas.

"The challenge overseas is to maintain the competitive advantage over time. This is because any competitive advantage as a result of cost, better work process and easy access to funds is easily overtaken by the locals," Hamzah said.

Master Builders Association Malaysia president Ng Kee Leen said issues affecting local construction firms overseas are track record and funding.

"There are not many mega projects in Malaysia for the companies to build a track record so they embark on overseas projects in a joint venture with the locals to build their portfolio," Ng said.

"When you have another partner, it is very tough. It will be good if Malaysian firms can bid alone for projects overseas," he added.

Ng said funding was an issue because banks in Malaysia were not willing to support the contractors as they were sceptical about overseas projects.

"We hope Malaysian banks will set up branches in the Middle East and North Africa to support our contractors." he said.

By Business Times (by Sharen Kaur)