Magna Prima plans projects worth RM1.6b

Magna Prima aims to develop a commercial development project and a hotel in Jalan Ampang as well as a mixed-development project in Jalan Gasing.

KUALA LUMPUR: Magna Prima Bhd (MPB) is set to develop high-end property projects with an estimated gross development value (GDV) of more than RM1.6 billion in Jalan Ampang, Kuala Lumpur, and Jalan Gasing, Petaling Jaya, Selangor.

MPB, an investment holding company, aims to develop a commercial development project comprising two towers, residential units and a hotel in Jalan Ampang, as well as a mixed-development project in Jalan Gasing.

“The Jalan Ampang project is expected to start next year and the Jalan Gasing one in 2013,” said executive director Datuk Rahadian Mahmud Mohd Khalil.

On MPB’s ongoing 25-storey single-tower residential apartment project in Melbourne, Australia, known as Dynasty Living, he said 62 per cent of a total 320 units had been sold.

The remaining 122 units are expected to be launched in February next year in Kuala Lumpur, he said after the company’s extraordinary general meeting (EGM) here yesterday.

The project is expected to be completed in 2013 and will contribute to the company’s revenue with a gross profit of US$15 million (RM48.26 million) after 2013.

Other MPB ongoing projects — in Shah Alam, Bukit Jalil and Selayang as well as the Jalan Kuching project — are expected to contribute in the next two years.

On future projects, he said MPB is always looking to acquire more land for landed residential property and commercial shop lot projects.

On the industry’s outlook, he said landed property would remain at current levels after taking into account this year’s demand and sales performance but believed there would be an over-supply of commercial and office property.

By Bernama

Market cautious on WCT

An artist’s impression of WCT’s existing project, the Platinum Plaza, in Ho Chi Minh City. The company is set to undertake its second property project on a 11.5-acre site in the Vietnamese capital

Latest Vietnam project may be affected by slowing global economy

PETALING JAYA: The market is for now cautious over construction and property company WCT Bhd's joint venture with Southern Land Corp to develop 11.5 acres in Ho Chi Minh City, a project in which the former has a 70% stake.

This would be the second project for WCT, whose other project comprises an integrated development on 22.2 acres in the Vietnamese capital.

However, WCT's share price only gained 2 sen to RM2.32 despite the announcement and allowing for the quiet trading on the local bourse going into the long weekend break.

This could be due to the fact that while analysts have positive long-term views for Vietnam, current global economic conditions as well as high inflation and the devalued dong might be the stumbling blocks in the short term.

The country's inflation for December was still a eye-watering 18.1% year-on-year after rising 19.8% in November and surging 21.6% in October while to-date, the US dollar has gained nearly 8% against the dong.

Analysts believe the project, which involves the development of medium to high-end condominiums and commercial shoplots for the purposes of lease and/or sale, has long-term potential but could face challenges due to the expected slowdown of the global economy next year.

They have also maintained their financial forecasts for WCT pending guidance on the project's launch date and gross development value.

Affin Investment Bank Bhd analyst Ong Keng Wee said in a report that the Vietnamese property industry had long-term potential but short-term uncertainties remained with the eurozone debt crisis still unfolding and the global economy expected to slow in 2012.

He has maintained financial year ending Dec 31 (FY11) to FY13 forecasts with a target price at 15 times earnings per share for 2012 and maintained a “buy” call on the stock pending further information on the project.

Ong noted that the good response to Gamuda Bhd's Celadon City (in Ho Chi Minh City) and Gamuda City (in Hanoi) was a comforting sign but said that WCT construction division's recent tender failures and likely inability to secure RM2bil of new projects this year were the key concerns.

Meanwhile, analysts at Kenanga Investment Bank Bhd, who have maintained their “outperform” call on the stock, said global economic uncertainties could expose the project to construction delays and low take-up rates.

“There is no change to our forecast at this juncture,” they said, adding that the project would only contribute to earnings by FY14 with a contribution of 7 sen to sum-of-parts valuation although that had not been factored into the forecasts yet.

They reckon the company would likely fork out RM78mil for its portion of the joint venture and gear up to RM314mil (assuming operating margin at 20%) while the project financing could further leverage the balance sheet up to 1.07 times gearing throughout the 5-year project period (from 0.9 times as at third quarter ended Sept 30).

WCT said in an announcement to Bursa Malaysia on Tuesday that the project had a duration of 50 years from the date of receipt of the investment certificate awarded by the People's Committee of Ho Chi Minh City on Dec 24.

The company also announced in late October the acquisition of 468 acres in Rawang for RM38.4mil.

By The Star

MIDF maintains 'neutral' call on WCT’s stock

This is despite the property developer receiving Vietnamese government's approval to undertake a residential and commercial development in Ho Chi Minh City.

MIDF Research has maintained “neutral” call on WCT Bhd, despite the property developer receiving approval from the Vietnamese government to undertake a residential and commercial development in the capital city.

Two days ago, WCT told the stock exchange that its unit WCT (S) Pte Ltd was awarded an Investment Certificate to develop a 4.6ha plot at Saigon South in Ho Chi Minh City.

The 70:30 joint venture between WCT and the Vietnamese government’s Southern Land Corp will see WCT setting aside an initial charter capital of US$25.2 million (RM79.88 million).

MIDF said it is sceptical on the execution as back in 2008, WCT was awarded a contract to build Platinum Plaza, the largest shopping mall in Ho Chi Minh City. Yet, up until now, that project is still not contributing to WCT’s income.

“The property market in Vietnam is unstable as the country is still facing high borrowing costs and inflation,” the research house said in its notes to investors.

MIDF estimates that WCT’s share price might settle at RM2.20 from the current RM2.32. It derived the RM2.20 target price by ascribing a price to earnings ratio of 9.6 times.

By Business Times

Mah Sing files suit over project

PETALING JAYA: Property developer Mah Sing Group Bhd has taken legal action to restrain Asie Sdn Bhd and Usaha Nusantara Sdn Bhd from making deals concerning a 4.08-acre leasehold parcel along Jalan Tun Razak, Kuala Lumpur.

Mah Sing told Bursa Malaysia that it had filed a summons on Tuesday at the High Court to apply for an injunction concerning the joint venture land.

Leong: ‘We shall make further announcements when more details are available

On Aug 2, Mah Sing had entered into a 60:40 joint venture with Asie to develop the parcel into a mixed development, tentatively called M Sentral, with a gross development value of RM900mil.

Mah Sing would pay RM106.6mil for the parcel, to be settled via 60% cash and a 40% stake of the joint venture company to Asie.

Usaha Nusantara is a wholly-owned subsidiary of Asie, which is the concession holder for 58 acres of leasehold land slated for urban regeneration under the Blue Corridor policy of Kuala Lumpur City Plan 2020.

The 58-acre land includes the joint venture land, which is part of the urban regeneration area of the Tunku Abdul Rahman flats or popularly known as the Pekeliling flats.

However, Asie has taken the position that the joint venture agreement had lapsed on Dec 2 given that certain conditions precedent (CP) in it were not met.

Mah Sing, however, maintained that the agreement had not lapsed, given that they had waived certain CP.

In a statement to StarBiz, Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum said: “Mah Sing has exercised its rights as provided in the joint venture agreement to waive the CP and proceeded with the transaction, and has also filed a civil suit for specific performance on the CP. We shall make further announcements when more details are available.”

Property analysts said the potential loss of the joint venture deal would not have a significant effect on Mah Sing.

“The proposed M Sentral project is not really big when compared with some of Mah Sing's projects in the pipeline,” said a bank-backed analyst.

Kenanga Research said in a recent note that if the project did not go through, there was no material impact on its financial year 2011 - 2012 net income of RM160mil to RM204mil as the project's significant contribution would only commence from FY13 onwards.

“We would be disappointed if the project fell through as we thought it would give the group an opportunity to tap on to other parts of the River of Life project and enlarge its war chest of landbanks.”

Meanwhile, Leong pointed out that presently, Mah Sing had a remaining landbank of 1,070 acres with GDV of RM13bil.

“Together with unbilled sales of RM2.14bil, this should last us five to seven years. We will also be looking out for more good landbank in 2012 and are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth,” he added.

By The Star