Property hotspot in Penang

George Town: The development potential of Penang island's southeastern area is growing as more property developers are eyeing it for their projects.

Business Times has learnt that CP Land Sdn Bhd, the property arm of the CP Group, has disposed of 40 hectares of land it owns in the Queensbay area at Bayan Lepas to a Penang-based property player.

Sources said the land was sold at RM420 per sq foot (psf) to Asia Green Development Sdn Bhd in May and the transaction is believed to be worth RM160 million.

Asia Green is said to be planning to build serviced apartments on the land, which is currently serving as a parking lot.

The Queensbay development sits on 29.2ha of sea-fronting land on which Penang's largest shopping centre, Queensbay Mall, and the Eastin Hotel are sited.

The mall was sold by CP Group Sdn Bhd to CapitaMalls Asia last year for RM657 million.

On Monday, property player Ivory Property Group Bhd announced that it had won the rights to buy 41.50ha of land at Bayan Mutiara on the island, which lies south of the Penang Bridge and close to the Queensbay area.

Some 27.34ha are existing land and 14.16ha are to be reclaimed for a proposed mixed development, Ivory told Bursa Malaysia in a statement.

The reserve price of the Bayan Mutiara land is said to be RM200 psf and it is learnt that Ivory's win-ning bid was RM240 psf, im-plying that total land cost was about RM1 billion.

It is also learnt that Ivory's payment to the Penang Development Corporation will be staggered over five years and the company intends to embark on its maiden launch of the project next year.

Meanwhile, at a stone's throw from the proposed Bayan Mutiara development, Boustead Holdings Bhd is believed to be embarking on a reclamation project.

A financial daily last September reported that Boustead will be allowed to reclaim an area "very much less" than 40ha between the existing Penang Bridge and the Penang Second Crossing in Batu Maung as compensation for having had to reduce the height on a 12-storey hotel it is developing at Weld Quay on the island.

Boustead was reported to have submitted a compensation claim of RM60 million to the Penang Island Municipal Council for revoking the initial approval of a 12-storey building in order to comply with heritage status guidelines within the Unesco heritage zone.

Boustead's initial plan was for a RM140 million development of a four-star hotel with 300 rooms.

Property experts told Business Times that the cost of reclamation per square foot currently stands at RM40 and Boustead is likely to pay RM174.5 million for the reclamation of the 40ha.

It is also learnt that the Penang government will be given 8ha of the 40ha free of charge.

By Business Times

Sandakan Harbour Square ready by Dec

SANDAKAN: The third and the final phases of a RM510 million Sandakan Harbour Square, comprising a shopping mall and an international hotel, are on track to be completed by year-end.

According to project manager Ireka Development Management Sdn Bhd, Sandakan Harbour Mall is scheduled to open by end of the year, while the opening of Four Points by Sheraton Hotel is sche-duled for early next year.

Ireka president and chief executive officer (CEO) Lai Voon Hon said both buildings are currently about 80 per cent completed.

"There is no breakdown of the costs of the mall and the hotel but the gross development value of the mall and hotel, which are in phases three and four, is RM200 million," Lai told a news conference after the topping up ceremony yesterday.

The ceremony also saw the signing of agreement between Ireka and the mall's anchor tenant, Parkwell Departmental Store and Supermarket, owned by Evergreen (1979) Trading Sdn Bhd.

Also present at the ceremony, witnessed by Sandakan Municipal Council (MPK) president Datuk James Wong, were Starwood Asia Pacific Hotels & Resorts regional vice president (Southeast Asia) Chuck Abbott, CB Richard Ellis (Malaysia) managing director Allan Soo and Evergreen Trading managing director Lai Kock Poh.

Sandakan Harbour Square, a seafront urban renewal project, is developed by ICSD Ventures Sdn Bhd, a wholly-owned subsidiary of London-listed Asean Properties Ltd, together with MPK as its joint-venture partner.

The integrated commercial development on reclaimed land overlooking the Sulu Sea, received the Asia Pacific Property Awards in 2009 in the commercial redeve-lopment category.

Lai said the project, which started in 2003 and spans over 30ha of land, blends well with Sandakan's development plan as Sabah's education hub.

He said the five-storey mall, with 200,000 sq ft of retail space, is targeted at local and international tourists as well as youngsters.

Abott said the 26-storey, 300-room Four Points by Sheraton hotel tower is targeted at business and leisure travellers.

Starwood manages eight hotels in Malaysia, including a Four Points by Sheraton hotel in Kuching, he added.

MPK's Wong said the Sandakan Harbour Mall development will contribute significantly to tourism activities in Sandakan, which has a population of about 500,000 people.

"The mall and the hotel are expected to generate between 3,000 and 4,000 job opportunities for the locals," he said.

By Business Times

SP Setia abandons China property venture

SP Setia Bhd, a Malaysian real estate developer, scrapped a joint venture with Hangzhou Ju Shen Construction Engineering Ltd to develop a mixed property project in China because terms of the agreement weren’t met.

SP Setia “still firmly believes” that property prospects in China are “positive,” the company said in a statement in Kuala Lumpur today. It will continue to look out for other suitable opportunities there, it said.

By Bloomberg

Malaysian Rubber Board land sale on track

KUALA LUMPUR: The Malaysian Rubber Board (MRB) is on track to monetise some of its land bank assets in the Klang Valley, said chairman Datuk Wira Ahmad Hamzah.

He said MRB was satisfied with the smooth progress so far particularly on the sale of over 40ha of its Rubber Research Institute (RRI) land in Sg Buloh for the My Rapid Transit (MRT) project.

Of its total 1,300ha RRI land bank, Ahmad said MRB planned to retain about 214ha for the development of MRB's new headquarters, a dedicated international class rubber research centre, a Royal Commodity College, a rubber museum and rubber-related business clusters.

“All these proposed developments will be financed from the funds to be generated from our land bank assets monetisation exercise,” Ahmad told StarBiz on the sideline after the opening of MRB's International Rubber Economic Conference 2011 was officiated by Plantation Industries and Commodities Deputy Minister Datuk G. Palanivel yesterday.

Declining to comment on the funds to be generated and also the costs involved for MRB's future development, he said “Prime Minister Datuk Seri Najib Tun Razak is expected to unveil full details on the subject before year-end.”

Industry observers had pegged MRB's land bank assets to be worth over RM1bil nationwide. MRB's prime land bank assets are located in Sg Buloh and Jalan Ampang in KL. The MRB's current headquarters sits on a hot location along Jalan Ampang facing the Petronas Twin Towers in the city's golden triangle area.

Earlier, at a press conference, Palanivel said that while it was tough to increase the hectarage for rubber cultivation in Malaysa, with more research and development, yield per ha in rubber plantations could be increased.

By The Star

House prices in England, Wales slump again

LONDON: House prices in England and Wales ticked down again in July and are expected to fall further despite signs that demand is picking up somewhat, a survey by property data firm Hometrack showed on Monday.

Prices fell by 0.1% for a third month in a row, Hometrack said, which left them 3.9% below last July’s level.

Richard Donnell, director of research at Hometrack, said that while prices are likely to ease further, the market was showing signs of stabilisation as sellers became more realistic about possible deals.

Donnell noted that the gap between houses on offer and demand closed to reach its lowest level in eighteen months in July as more buyers entered the market.

The number of sales agreed in England and Wales had increased by 20% in the last two months, he said.

Hometrack put the increase in buyers down to low interest rates and a growing number of people who want to move home four years into the economic downturn.

London and East Anglia bucked the general trend, recording a price increase of 0.3%.

House prices are widely expected to fall further because high inflation, rising taxes and slow wage increases squeeze households’ budgets.

By Reuters