1Utama boost for See Hoy Chan

Petaling Jaya: Property developer See Hoy Chan Holdings (SHC) expects to reap the benefits of the RM160 million makeover of its 1Utama Shopping Centre in Bandar Utama by next year.

The upgrade, which comes some 16 years since the building was first constructed, will see SHC - the developer and owner - enjoy a 35 per cent jump in revenue in 2012 as it begins to manage both the new and old wings.

1Utama's old wing was managed by Aeon Co (M) Bhd, which operates the Jusco stores for 15 years until August 2010.

SHC director Datuk Teo Chiang Kok said both SHC and the tenants will pump in an equal amount of investment to spruce up the building and the outlets, an exercise which is expected to be completed by November this year.

"SHC will be spending RM80 million and our tenants will be spending another RM80 million," Teo told Business Times in an interview at the mall.

The construction cost of the old wing, built 16 years ago, was RM89 million, excluding the land cost.

This makeover will see the two-million sq ft 1Utama old wing increasing its rentable area to 780,000 sq ft. The three-million sq ft new wing has a 1.2 million in nett lettable area.

The mall will have the TGV Cinemas relocated one floor up, with an additional five more cinemas to make 12 cinemas in total.

Apart from the facade and interior, 1Utama has just completed connecting the mall to its newly opened 1 First Avenue office tower. The ramp at the entrance, which leads to the third floor parking, will be removed, as it is obstructive.

The office car parks in 1 First Avenue will be freed up on weekends so that the entire mall will be able to accommodate over 10,000 cars.

Jusco, an anchor tenant, will occupy 320,000 sq ft and is expected to open at its new location within the mall by August this year.

Subsequently, two major Japanese retailers will take over the space where Jusco's supermarket and Jusco's deli are now located. These two new tenants are set to start business before the end of the year.

On the performance of the mall, Teo said: "Traffic count to the shopping centre has been increasing year-on-year. In 2010, it rose 13 per cent over 2009".

While the old wing is experiencing a drop in shopper traffic, traffic to the new wing has risen. Teo views this as a positive sign, as previously, there were patrons who either visited the new wing or old wing only.

When asked if the mall may be extended further given the availability of land where it now sits, Teo said that 1Utama has already reached an optimal size for a suburban mall.

"Walking from one end to the other in itself is 1km," he said.

By Business Times

See Hoy Chan looks beyond Malaysia's shores

PETALING JAYA: See Hoy Chan Holdings, the developer of Bandar Utama township, is planning to venture abroad to widen its revenue base.

Director Datuk Teo Chiang Kok said going abroad is a natural progression for the group, especially since conditions for developers in Malaysia are getting tougher.

Teo, in a recent interview with Business Times said countries under its radar include Indonesia, Vietnam, India and secondary cities in China.

"It could be an entire township or just an office building ... we are still exploring. It is a natural progression to look beyond our borders," Teo said.

According to him, the property development environment in Malaysia makes it difficult to obtain sizeable landbank.

Its Bandar Utama land, for example, covers 405ha.

Teo added that the requirement for allocating low cost housing, cross subsidies for utility companies, Bumiputera quotas and discounts add to the cost of housing and reduces yield.

"We will go where opportunities are better and where things can be developed more efficiently. In India and China, return on investment is faster and better," he said.

SHC is also interested in participating in the 1Malaysia Mall projects proposed under the Economic Transformation Plan, that aims to take Malaysian retailers and mall operators abroad.

Besides houses, the Bandar Utama development also houses commercial properties, which includes the 1Utama Shopping Centre, Plaza IBM, KPMG Tower, the five-star One World Hotel and the 1 First Avenue office.

The next development on the cards is for a four-star 450-room hotel and a convention centre with some 18,000 sq m space.

"We will submit the proposal for approval by year-end and it should be ready within three years," Teo said.

The convention centre will be built in such a way that it will be connected to the new hotel as well as to two more office towers, each 30-storey high.

Beyond that, the plan for Bandar Utama includes the establishment of a hospital for which a 3ha site has been set aside. And next to the hospital are plans for the setting up of a retirement village.

Meanwhile, Teo, who had previously not been keen on floating its shares on the stock exchange, is now open to the possibility of listing a real estate investment trust (REIT).

"We have been approached to look at REITS. (The setting up of) REIT looks interesting, but in terms of timing, we are not there yet ... we need our commercial properties to mature a little more and reach critical mass," he said.

He added that the properties could take another three to five years to mature and the company needs a few more buildings, within or outside Bandar Utama.

By Business Times

UOA Development posts RM130m net profit in 1Q

KUALA LUMPUR: UOA Development Bhd, which will be listed on Wednesday, June 8, posted net profit of RM130 million in the first quarter ended March 31, 2011.

It said on Monday, June 6 that its revenue was RM145.7 million and profit before tax of RM155.7 million. The current period profit after tax was arrived at after expensing RM21.9 million for administrative and general expenses and RM22.1 million for tax expense.

“Total expenditure for the quarter under review of RM21.9 million comprises marketing expenses of RM10.2 million, property maintenance expenses of RM1.7 million, finance costs of RM0.7 million and administrative and operating expenses of RM9.3 million,” it said.

UOA Development said the group’s profit and revenue were mainly derived from progressive recognition from on-going development projects which include The Horizon Phase II, Kepong Business Park and Binjai 8, and sales of inventories.

“During the quarter, the Group also recognised fair value gains amounting to RM92.3 million due to the completion of Blocks 3 and 4 of The Horizon Phase II which are held as investment properties,” it said.

UOA Development also said the group planned to launch two other projects -- the Ceylon Hotel Suites located within the Kuala Lumpur Golden Triangle and Kiara IV in Segambut.

It said together, the two development projects would have an estimated gross development value of about RM400 million.

By The EDGE Malaysia

N2N Connect buys officer tower in Bangsar South for RM36m

KUALA LUMPUR: N2N CONNECT BHD is acquiring an 11-storey office building in Bangsar South for RM36 million cash to be partly used as its office space, and to be let out to third party tenants.

In a filing Monday, June 6, N2N said it had entered into sale and purchase agreement with Bangga Istimewa Sdn Bhd to acquire the building known as Block 6 (Type G) as the The Horizon, Phase 1 in Bangsar South.

N2N said it planned to occupy four storeys of the property for its own use and rent out the remaining floor space to third party tenants.

“Based on conservative management estimates of current office rental rates in the vicinity of the property of RM5 per sq ft per month, it is estimated that the rental income to be generated is approximately RM1.76 million per annum, assuming the leasing out of the entire seven storeys of the property to third party tenants,” it said.

N2N said it would finance 75% or RM27 million of the purchase price via borrowings, while the remaining RM9 million would be through funded internally.

The company said the The Horizon, Phase 1, was a commercial development comprising 14 blocks of 11-storey stratified office buildings erected on a three-level basement car park.

The entire blocks of The Horizon, Phase 1, are MSC-compliant and completely broadband enabled, it said.

“The Horizon, Phase 1, forms part of the ongoing integrated township development known as Bangsar South.

“When fully-developed, Bangsar South will consist of Grade-A offices, retail avenues, boutique condominiums, service suites, a clubhouse and a boulevard,” it said.

N2N said that acquisition would provide it savings on its current rental expenses; a hedge against future increase in rental expenses; potential capital gains arising from the expected appreciation in value of the property; and secure sufficient office space to cater for the future expansion of N2N to be housed all under the same roof as the property is designated as a MSC Malaysia Cybercentre.

“It is a conducive environment to promote growth of N2N as a MSC Malaysia status company,” it said.

By The EDGE Malaysia

Noor Arfa keen to set foot in property sector

KUALA LUMPUR: Noor Arfa Holdings Sdn Bhd, a pioneer in the batik industry in Malaysia, is planning to venture into property development and hotel management in the near future.



Its founder, Wan Mohamed Ariffin Wan Long, said that the move is necessary as its core business - manufacturing batik and selling handicrafts - has seen a sharp fall in recent years due to the shortfall in tourist arrivals.

"We are looking for a suitable investor or developers to join us to build a three-star hotel and several chalets around the area at our main showroom in Chendering, Kuala Terengganu," he told Business Times in an interview recently.

Wan Mohamed said the company has over two acres of empty land, which would be ideal for such development. However, it is having a tough time finding the right developer to partake in the project.

"We plan to jointly develop the area with the developer, and the breakdown on how we plan to do this will be finalised once we find the right developer to work on this project," he said, adding that a RM20 million investment would suffice for a start.

Although there are many three- and four-star hotels around the area where Wan Mohamed plans to build his own hotel, he is confident that it would be a hit because of the tourism activities that his place has to offer.

"My place is right next to a river bank (which leads to the South China Sea), there is a nice restaurant here where tourists can do all sort of activities like weaving songket, chanting batik and also shopping for handicrafts (at the showroom). The other hotels don't have that sort of facilities," he said.

Wan Mohamed said his son had approached the Tune Group for a joint venture only to be turned down by the latter as they only set up hotels next to airports.

Wan Mohamed, who started Noor Arfa along with his wife Noor Hijerah Hanafiah in the 1980s, said a lot has changed since the yesteryears as today, not many Malaysians put on the importance of donning the batik. This, he said, is slowly eating into his profits.

"These days, even the civil servants are not following the Thursday rule of wearing batik to work like they once used to," he lamented.

He said the lack of tourism activities or big events like "Visit Year" in Terengganu and the country is also affecting the sales of his batik goods.

"Even the East Coast Economic Region has failed to bring in any sort of development or tourism activities in this area," he said.

Wan Mohamed has two showrooms located in Kuala Terengganu and Malacca, and few other stand-alone shops in Kuala Lumpur.

"Now, many travel agents fly the tourists to the islands and completely bypass Kuala Terengganu. This was not the practice before," he said, adding that Singaporean tourists used to be the biggest spenders back in the good old days.

Asked whether his company plans to be listed on the local bourse, he said that there are many things that need to be ironed out internally before such a plan could take place.

"We did plan to go for listing in year 2000 but at that time, our sales were clocking in at RM16 million a year. Last year, we only made RM10 million in sales and the year before that (2009), it was around RM12 million. I am afraid that this year will be even worse that last year's performance," he said.

By Business Times

Complex to be completed in 2012

Mohd Ali showing the construction of the complex in Malacca during a visit recently.

MALACCA: Construction of the state’s recently revived Customs Immigration and Quarantine (CIQ) complex is expected to be fully completed by March next year.

Chief Minister Datuk Seri Mohd Ali Rustam said the government had strived hard to ensure the project was restored after the initial construction hit a snag due to technical hitches on the part of its previous contractor.

“We have commissioned a second contractor and up to now 38% of the project is completed and if all goes well, we could anticipate the RM73mil complex to be operational by mid-2012,” he said at a site tour recently.

Once completed, Mohd Ali added the complex could accommodate 15,000 visitors arriving from neighbouring countries on a monthly basis.

“This will certainly be a boost for Malacca in terms of the tourists arrivals,” he said.

The CIQ will complement the Batu Berendam International airport as a major gateway to the state and also to expedite the entry process for foreign tourists.

Mohd Ali said once the CIQ was completed, the state could also attract tourist boats from Singapore and Batam to enter the local waterway.

He added that frequency of the current ferry services from Bengkalis and Dumai in Indonesia could also be doubled with the new facility.

The increase, could turn the Malacca port as an optional hub for ferry services from neighbouring countries.

On another matter, Mohd Ali said the government hoped to introduce a tram car to ferry city folks to several selected destinations.

He said the tram service would help alleviate traffic congestions at the city-center while the monorail service was also expected to resume soon and would serve several populated areas here.

By The Star