E&O aims to grow F&B, property units in region

EASTERN & Oriental Bhd (E&O) wants to expand regionally to grow its property development and food and beverage (F&B) units, its chief said.



The developer's businesses are currently in Kuala Lumpur and Penang, where it is involved in property development and investment, and operating hotels and restaurants.

Under the F&B division, E&O operates the Delicious Chain of restaurants in Malaysia and it wants to expand this to Singapore, Thailand and Indonesia, said its executive director, Eric Chan.

"F&B contributed some RM3 million to E&O's net profit last year and we aim to increase this going forward," Chan said yesterday, after the company's shareholders meeting in Kuala Lumpur.
E&O operates six Delicious outlets and one Chinese restaurant.

The company has RM500 million in its coffers to spearhead the F&B expansion. However, the bulk of the cash will be used to generate fresh cash flow by launching new projects and buying more land, Chan said.

On the property development front, Chan said E&O aims to launch flagship projects in Singapore and Jakarta, Indonesia, but there are no concrete plans yet.

"Our priority is to launch projects locally. We have more than RM4 billion worth of high-end housing projects to launch in Penang and Kuala Lumpur. We will launch as long as the market can take it.

"If there are no negative policies being implemented, then we expect the markets in Penang and Kuala Lumpur to be positive," he said.

Among the projects that E&O plans to launch are seafront terraces, villas and semi-detached homes in Penang, and condominiums at Jalan Yap Kwan Seng and Jalan Kia Peng as well as in Bukit Tunku in Kuala Lumpur.

Chan said E&O aims to achieve record sales of RM1 billion. No time frame was, however, given.

For its financial year ended March 31 2010, E&O posted RM70.5 million in net profit on revenue of RM352.4 million.

By Business Times

MPPP revises plot ratio for high-rise properties

GEORGE TOWN: The Penang Municipal Council (MPPP) has revised the plot ratio guidelines for high-rise properties on the island to allow developers to construct a total of 122,000 sq ft per acre compared with 42,000 sq ft per acre previously.

Real Estate Housing Developers’ Association (Rehda, Penang) chairman Datuk Jerry Chan told StarBiz that developers could now develop up to 87 units, with a total built-up area of 122,000 sq ft per acre.


Datuk Jerry Chan ... More flexibility for developers

“The condition that comes with the new plot ratio guidelines is that 5% of the units is to be sold at not more than RM200,000.

“Another 10% is to be sold below RM300,000, and another 5% at a price not exceeding RM500,000,” he said.

The new plot ratio guidelines are applicable in areas where it is allowed to develop 30 units per acre and above, according to the local control plan, and in areas designated as commercial/tourism areas under the MPPP’s structural planning and development control plan.

The new plot ratio guidelines are not applicable for prime residential areas such as Jalan Tunku Abdul Rahman (popularly known as Ayer Rajah Road), Jesselton area, existing established housing zones and general housing areas, George Town Heritage Site (which includes the buffer zone), certain areas in Tanjung Bungah and Tanjung Tokong.

These terms and conditions were communicated to Rehda Penang and other professional bodies in a letter dated July 28, 2010.

Chan said the MPPP also implemented in July the Green Building Index (GBI) guideline to encourage the development of green development projects.

“According to the GBI, if the project qualifies for the platinum and gold standard of the GBI, the developer can still pay the old development charges of RM5 per sq ft and RM7 psf respectively for residential and commercial properties.

“If the project fails to qualify for either the platinum and gold standard, the developer will have to pay triple the amount,” he said.

Chan said the 122,000 sq ft built-up area per acre was still lower than the guidelines for super-condominium projects which could exceed 180,000 sq ft built-up area per acre.

“The new plot ratio guidelines will see the development of more affordable high-rise properties priced from RM200,000 to suit different ages and budgets,” he said.

Previously, the plot ratio guideline for high-rise on the island was 60 units per acre or 42,000 sq ft per acre.

“This means a developer could either build 60 units of 700 sq ft apartments or 30 units of 1,400 sq ft apartments. Each unit must also have three bedrooms.

“The old plot ratio guideline, which had been enforced for over 30 years, was inflexible and did not give the developer the room to construct units of mixed sizes and lay-outs and price them according to the needs of different income groups,” he said.

By The Star

3 local firms in talks to invest in India's Sri City

Three Malaysian companies are expected to establish an investment presence in one of India's top special economic zones (SEZs) by the end of the year.

Integrated SEZ developer Sri City (Pte) Ltd vice-president C. Saravanan on Tuesday said the companies, which are engaged in industrial engineering, are likely to plough in an estimated US$25 million (RM77 million) into India's first integrated business city known as Sri City, located 55km away from Chennai in South India.



"The Malaysian companies are among several foreign firms we are in advanced negotiations with and we hope to sign a deal with them by the end of the year," Saravanan told reporters in Penang.

He, however, did not disclose the name of the Malaysian companies, except to say that the firms were mulling setting up a presence in South India for manufacturing and distribution purposes.

Saravanan and Sri City Pte's deputy general manager for marketing M. Ganesh were in Penang as part of a six-day official visit to Malaysia to meet top investors who are keen on investing in India.

They are also due to meet government and investment promotion officials in Perak and Kuala Lumpur this week.

Apart from meeting potential investors, Saravanan said the company is also looking for joint-venture opportunities with local consultants and companies.

"There is an estimated US$30 million to US$40 million (RM93 million to RM124 million) worth of joint-venture projects for Malaysian companies in Sri City for the development of social infrastructure like residential enclaves, education zones, leisure and entertainment zones."

He singled out the development of golf courses within Sri City as a project which could potentially attract Malaysian companies.

"As developers of this economic zone, our equity would be to provide land for these proposed projects," Saravanan added, saying that his company has ear-marked US$250 million (RM770 million) in setting up Sri City and a total of US$150 million (RM462 million) has been spent, to date, on infrastructure support.

Sri City, which was set up in 2008 and covers more than 2,400ha of land, was master-planned and designed by Singapore-based Jurong Consultants Pte Ltd.

The zone has attracted 35 multinational companies with total investments of US$150 million. Eleven of these investors have already begun operating in Sri City.

"We are hoping to lure another 15 more companies to the SEZ by the frist quarter of 2011," he added.

Located on the border of Andhra Pradesh and Tamil Nadu, Sri City offers smooth connectivity to three sea-ports, two international airports, a national highway and railway services.

"We have earmarked some 300ha of land for open spaces and our plans are to develop Sri City as a green city, as we aspire to be the world's first carbon-neutral city," Saravanan said.

By Business Times

BMAM voices dissatisfaction with valuers' proposal

Investors will lose interest in buying condominiums and apartments in Malaysia if the proposed amendments to the Valuers, Appraisers and Estate Agents Acts 1981 take place.

The Building Management Association of Malaysia (BMAM) is up in arms against the Board of Valuers, Appraisers and Estate Agents who had proposed to amend the Act.

The proposal was tabled in Parliament for first reading at its last session in July.

"If this (the amendments) takes place, the management fees (of high-rise residential units) will increase by 100 per cent, and many people including foreign investors will lose interest in buying condominiums and apartments," said (BMAM) president Datuk Teo Chiang Kok in a press conference to voice its dissatisfaction with the proposed amendments yesterday.

Teo said the amendments would encompass all facets of property ownership and monopolise the functions of property management including building and leasing management, general maintenance and facilities management.

There are almost two million strata title residential holders in the country and based on a minimun fee of RM50 per unit per month, valuers stand to make RM1.2 billion annually, he said.

"It's indeed a very lucrative business and that is why monopoly is not good ... We urge the government to do something about it as this is their (valuers) second attempt to see the amendment through after their first attempt five years ago failed," he said.

Teo also said that the property management industry should not be monopolised by several hundred valuers, but should instead be allowed to operate in an open market.

"We have a pool of good talent who can readily do the job but if the proposed amended Act comes in force, there is definitely going to be a brain drain in this sector ... even those taking diploma courses for this type of work will not be able to find jobs," he said.

Teo said shopping complexes and malls would also not be spared as their shareholders will not be allowed to pick the people they want to manage their buildings.

BMAM has asked for an appointment to meet the Minister of Finance to sort out the issue, he added.

By Business Times

China steps up control of property market

China on Wednesday announced it had taken further steps to cool its red-hot property market, ordering banks not to provide loans for third home purchases and above.

The new measures are aimed at preventing house prices from rising too fast, the State Council, or cabinet, said in a statement, amid fears of a speculative bubble that analysts say could derail the world's second largest economy.

The cabinet said down payments on all home purchases would now have to be at least 30 percent, and limited the number of homes that people can buy in cities where prices are too high, have risen too quickly or where supply is tight.

The new measures urged banks to strengthen their oversight of consumer loans, banning them from being used to buy homes.

The cabinet also called for a trial reform of the property tax now being carried out in some cities to be sped up and gradually expanded to the whole of China.

This is widely expected to entail an expansion of the tax on commercial real estate to cover residential houses.

The measures are the latest in a series issued this year -- such as tightening restrictions on advance sales of new developments -- to try and prevent the property market from overheating.

Official data has suggested that these efforts have started to pay off, with growth in China's property prices slowing for the fourth straight month in August.

By AFP

Syed Mohamed set for IIB top job

Datuk Syed Mohamed Ibrahim, the property head at DRB-HICOM Bhd, is slated to join Iskandar Investment Bhd (IIB) as its chief executive officer (CEO), replacing Arlida Ariff who currently holds the post.

Arlida's contract expires at the end of this year and it is believed that her term will not be extended, sources said.



"The offer has been made and he (Syed Mohamed) may even start this year," one of the sources said.

IIB confirmed that Arlida's contract finishes at the end of the year, but declined to comment further.

Syed Mohamed and Khazanah Nasional Bhd, the parent of IIB, also declined comment.
Syed Mohamed has been the group director of DRB-HICOM's property and infrastructure division since early this year.

He returned to Malaysia after a stint as chief operating officer of Seera City Real Estate Development Co, a firm leading the RM24 billion, 15-year project known as the "Knowledge Economic City" in Madinah, Saudi Arabia.

The city is one of six new cities being built by Saudi Arabia and is intended to be an education and technology hub.

Before that, Syed Mohamed was the CEO of Tabung Haji's property arm, TH Properties Sdn Bhd, the developer of Bandar Enstek, a RM9.2 billion township in Negri Sembilan.

He will succeed Arlida, an engineer by profession, who was appointed IIB executive director on July 2 2007. She became the president and CEO on January 1 2008.

Under her watch, IIB has brought in significant projects like the Legoland theme park, factory outlets, and some world-renowned universities.

The RM750 million theme park, which is among the main attractions at Medini North in Iskandar Malay sia, will be the fifth Legoland in the world and is scheduled to open in 2012.

Since the set-up of IIB in November 2006, the company has also awarded over RM3 billion worth of construction jobs in Iskandar Malaysia.

In Medini North, there are RM1.7 billion worth of ongoing projects, including Legoland Malaysia and 1Medini, a residential project by WCT Bhd and IIB.

Arlida said recently that she was in talks with several local and foreign investors to build a three-star resort hotel, a four-star business hotel, a retail mall and a high-rise tower in Medini North worth RM1 billion.

IIB is also trying to get two other universities to set up engineering and multi-programme schools in EduCity, the 120ha education enclave in Nusajaya. One is with Singapore's Raffles Education Group.

In June, IIB signed a deal with the Management Development Institute of Singapore (MDIS) to set up an MDIS campus in EduCity.

The MDIS campus is the third in EduCity, the other two institutions being the UK's Newcastle University of Medicine and the Netherland's Maritime Institute of Technology.

By Business Times