Mah Sing, Asie to develop prime land

Mah Sing Group Bhd’s wholly-owned unit, Grand Pavilion Development Sdn Bhd, has signed a joint venture agreement with Asie Sdn Bhd and its subsidiary, Usaha Nusantara Sdn Bhd, to develop a 1.63-hectare prime land along Jalan Tun Razak-Jalan Pahang.

In a statement today, Mah Sing said Usaha Nusantara would grant Grand Pavilion the sole and absolute right to undertake the development of the land for an entitlement of RM106.60 million to be settled via 60 per cent in cash and 40 per cent stake in Grand Pavillion.

The joint-venture land formed part of the 23.42ha privatized urban regeneration project in Kuala Lumpur with a gross development value (GDV) of RM9 billion, whereby Asie has been granted full rights of and approvals for a mixed development, it said.

Mah Sing said the urban regeneration project would comprise residential and commercial properties and community, leisure, recreation and infrastructure facilities on 15 parcels of development land together with five air rights in Precinct 2-Pekeliling of the River Corridor Development under the Blue Corridor policy of Kuala Lumpur City Plan 2020.

It said for this first joint venture, it intended to develop a niche development, named M Sentral, with an estimated GDV of approximately RM900 million.

"The M Sentral will comprise smaller-sized and more affordable serviced residences as there is strong demand due to lower entry prices, as well as some retail units," it said.

By Bernama

Mah Sing top CIMB property sector pick

Kuala Lumpur: CIMB Research is "overweight" on the property sector, the research house said in a report yesterday, saying that Mah Sing Group Bhd is its top pick among the property stocks.

The research house added that SP Setia Bhd, which dominates the Klang Valley and Johor property sector, remains its core holdings.

CIMB Research also said that it is bullish on Penang developer Eastern and Oriental Bhd (E&O), noting that residential property prices in Penang have enjoyed higher appreciation over the past 20 plus years than the average in the Klang Valley and Johor.

"We are bullish about E&O and consider it to be undervalued. The stock is trading at a 45 per cent discount to our fully diluted revised net asset value (RNAV) per share of RM2.82," analyst Terence Wong wrote in the report.

"E&O remains 'outperform' in our books with an unchanged target price of RM1.98, which is based on a 30 per cent discount to RNAV," he wrote in the report.

Wong added that a potential re-rating catalyst for the sector includes a pick-up in merger and acqisition (M&A) activities, continued robust sales, landbanking exercises and accelerating earnings growth.

The research house also said it is not surprised that the M&A theme is resurfacing as it is becoming increasingly difficult to acquire decent landbank in the Klang Valley and Penang Island as developers hoard land and are aggressively bidding for strategic parcels.

"For Klang Valley, the population has grown to nearly seven million and development has spread as far south of Kuala Lumpur as Cyberjaya. Penang, being an island with a hilly centre and underdeveloped west coast, also limits the availability of land for development," said Wong.

By Business Times

'Property bubble burst unlikely in Malaysia'

A property bubble burst is unlikely to happen in the Asia Pacific, including Malaysia, as there are no signs to indicate such a trend in the next two years, says AmInvestment Bank Group.

Director for Retail Funds Ng Chze How said real estate investment trusts (REITS) would also not experience a burst including those acquired by the group.

"I don't see a burst or a crash in the property market. "You have high wages, ample liquidity, small percentage of non-performing loans and these plus steps taken by the government to prevent the economy from
overheating, augur well for the property market.

"I don't see a property burst (happening) in the next six months, one year or two years down the line," he told reporters at the launch of Malaysia's first

Asia Pacific REITs fund, AmAsia Pacific REITs, here today.

He said with these factors in place coupled with an economic recovery, there
would be more upside in the market. AmAsia Pacific REITs invests in a diversified portfolio of REITs listed in the Asia Pacific region.

Ng was optimistic the REITS selected by the group would see high occupancy
rate and increasing rental.

"Selected Asian properties have yet to reach their previous peak, as such, there is room for potential growth," he said, adding that properties were seen as a good hedge during the current inflationary period.

By Bernama