Billion-ringgit tower atop LRT station

Yong says the tower will be built by Crest Builder-Detik Utuh joint venture with Prasarana providing the land.

Project to be developed by joint venture

PETALING JAYA: In what may be Syarikat Prasarana Negara Bhd's most ambitious project yet to unlock value from its real estate, the national public transport operator is partnering with a developer to build a billion-ringgit tower atop its Dang Wangi light rail transit (LRT) station.

The project, won by Crest Builder Holdings Bhd and its 49% joint-venture (JV) partner Detik Utuh Sdn Bhd two weeks ago, is for the construction of a single-block mixed development fronting Jalan Ampang with a gross development value (GDV) of RM1.04bil.

It will be a herculean task for low-profile Crest Builder, not least because the proposed building would tower over the neighbourhood at 40 storeys.

Nonetheless, executive director Eric Yong is excited about its prospects.

“The LRT below is really the key selling point. If this was just bare land, we probably couldn't have got this value and concept.

“The main thing here is that you already have 8,000 to 10,000 people passing through the station everyday,” he told StarBiz in an interview.

The yet-to-be-named project, which will be built on 2.72 acres, marks the Petaling Jaya-based developer's maiden foray into high-end properties since announcing the move last year.

The plan, for now, is to build a tower cut into four segments: a mall at the bottom, small office flexible office (sofo) units, upscale serviced residences, and on the highest floors, a five-star hotel.

To monetise the view at the top, the building could feature a Skylounge with a pool facing KL City Centre as well as a Skygym or Skydeck, Yong said.

He pointed out that they were still deliberating whether to add a layer of office suites, in which case the hotel would be done away with.

The tower would have 50 floors to accommodate eight to nine levels of duplex sofo units.

Its planned total gross floor area measures 1.1 million sq ft while net floor area is close to 830,000 sq ft.

Following the agreement with Prasarana, the LRT owner and operator will receive 21.2% of the project's GDV as payment for land rights, which translates into RM220mil, or about RM1,857 per sq ft.

When contacted, its media affairs manager Azhar Ghazali said the funds would be used to part-finance its operations.

Prasarana will only provide the land; the rest of the development cost is to be borne by Crest Builder-Detik Utuh.

“Some may say (the land cost) is expensive but we're not looking at the market right now. It will be completed in 2017. By then, I think the market would have tumbled a little, corrected a little and maybe even shot up two-fold.

“It is expected that in the next six to nine months, the property sector will be under pressure from the tighter lending regulations but the market will evolve. Malaysian properties are still cheap compared with Singapore or Hong Kong,” Yong said.

Physical works for the project is expected to begin in early 2013 and the launch could be sometime after the middle of that year.

“Plus, we think completing it early may not be beneficial. We could fall into the lower part of the property cycle. Right now, the yield seems to be stabilising downwards.

“We do not know how long this will last, but my guess is (the cycle) will take six to nine months to pick up again,” he added.

Yong believes new record prices for property could emerge in 2017-2018. “The market takes three or so years to recover before it booms. We should see new benchmark prices then,” he enthused.

Asked about Prasarana's intent for the project, he said the state agency had wanted to maximise the potential of its assets.

“They have land in various locations but in this case (Dang Wangi), it was airspace. And because of the LRT, they also want to increase the number of pedestrians.

“If I add this development, assuming that an extra 4,000 to 5,000 people live here and half of them take LRT, we would have added 2,500 people to the system,” he said.

According to Yong, the tower's target customers would include the young and affluent in the banking, finance and marketing sectors.

“Those who can afford premium condominiums but can't buy bungalows yet, and they want to be in the heart of the city with all its lifestyle attractions,” he explained.

With the project being right next to the Klang River, Crest Builder is also readying a proposal for the project delivery partners of the River of Life (ROL).

ROL, a project under the Economic Transformation Programme, involves the beautification and development of a 10.7km stretch of the river within the city centre. Its project delivery partners are Ekovest Bhd and Malaysian Resources Corp Bhd.

“We have not officially approached them yet but we're looking at how ROL can enhance our development in this immediate stretch,” Yong said.

By The Star

UEM Land to showcase properties in Sabah, Sarawak

KUALA LUMPUR: UEM Land Holdings Bhd, one of Malaysia's leading property developers, will be organising several roadshows to promote its latest properties in four cities in Sabah and Sarawak.

They are Kuching, Miri, Sibu and Kota Kinabalu.

UEM Land said in a statement among the projects that will be on display at the exhibitions are Imperia Puteri Harbour, Impiana at East Ledang, Summer VOS and Symphony Hills.

The first leg of the exhibitions will be in three cities in Sarawak - Miri on April 14-15 at the Marriot Hotel, Kuching on April 21-22 at the Hilton Hotel and Sibu on April 28-29 at the RH Hotel. This will be followed by a stop in Kota Kinabalu at the Pacific Sutera Hotel on May 5-6.

"We realise that there is a growing interest for our properties in Sabah and Sarawak," said UEM Land chief marketing officer Siti Mariam Mohd Desa. "These marketing initiatives will not only serve as an excellent promotional platform but will also enable us to meet existing and potential customers to obtain a deeper understanding of their needs."

By Business Times

UEM Land project little affected

Puteri Harbour development prices over RM1mil

PETALING JAYA: The proposed policy to raise the floor price of properties sold to foreigners will have a limited impact on UEM Land Holdings Bhd's developments in Johor, even though a large portion of its buyers there are from abroad.

This is because prices in its Puteri Harbour waterfront development, where foreigners make up some 40% of buyers, have already surpassed the RM1mil mark, well above the proposed RM800,000 threshold, Hong Leong Investment Bank (HLIB) Research said in a report on the property sector.

StarBiz reported on Tuesday that the Government is considering raising the minimum floor prices of houses foreigners are allowed to buy to RM1mil from the current RM500,000 in a bid to prevent runaway house prices.

A decision on this was said to be “in the pipeline” and the implementation would be made by the economic planning unit.

Sources had also told StarBiz the revised guidelines would consider a slightly lower base price threshold of RM800,000 for residential properties in selected economic corridors such as Iskandar Malaysia to ensure their success.

“In the Klang Valley, our channel checks indicate that a majority of foreigners are renters instead of buyers; foreign buyers tend to focus on the KLCC area and the Golden Triangle, and they typically purchase projects with valuations in excess of RM1,200 per sq ft.

“Hence, the RM1mil floor price is also irrelevant to this group of buyers, in our view. We gather that less than 5% of all transactions are by foreign buyers, and we argue that impact will be minimal in light of the current prices,” HLIB Research said.

Meanwhile, analysts think UEM Land's recent purchase of 122.28 acres near Puteri Harbour was done at a good price.

The freehold land, which is under agricultural classification at the moment, was bought for RM93.2mil or RM17.50 psf from Tanjung Bidara Ventures Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd.

It is adjacent to Kota Iskandar, the Johor government's administrative centre, and 40km south-west of the Johor Baru city centre.

UEM Land plans to develop the land into a premier residential enclave featuring a mix of canal-front homes with individual berthing and high-end condominiums.

The project is expected to span over seven years, with work to commence in 2013.

In a client note, HwangDBS Vickers Research said the RM17.50 psf price was at the lower end of recent land transactions around Johor Baru.

“The latest transacted price of Puteri Harbour has reached RM220 psf, suggesting vast potential for the proposed land acquisition,” it said.

The 122.28 acres is actually part of a larger 4,500 acres it had disposed to Khazanah as part of a de-gearing exercise in 2006.

UEM Land currently has a land bank of about 5,600 acres in Nusajaya, one of the flagship zones in Iskandar, according to HLIB Research.

With the company now on stronger financial footing, HLIB Research said it was taking the opportunity to re-acquire the land to better implement its original vision for Puteri Harbour.

The brokerage added that the earnings impact from this new acquisition was uncertain at this juncture, although more clarity would emerge in end-2012 when UEM Land submits the detailed layout plan to the authorities for approval.

While UEM Land's management had said it was premature to release a gross development value (GDV) for the land, Kenanga Research has estimated a GDV of RM8bil based on a land utilisation rate of 70% and GDV per acre of RM96mil for Puteri Harbour's Imperia condominium.

By The Star

CIMB-TCA buys Canberra office building for A$226m

THIRD INVESTMENT: Property is on a long-term lease to the government department

CIMB TrustCapital Advisors (CIMB-TCA) has acquired a 12-storey office building in Canberra, Australia, for an estimated A$226 million (RM716 million).

CIMB-TCA, a joint venture between CIMB Real Estate Sdn Bhd and Singapore-based TrustCapital Advisors Pte Ltd, bought 50 Marcus Clarke Street from Walker Corp.

The property is described as A-grade and is said to be one of the largest, newest and best-built assets in Canberra, CIMB-TCA said in a statement yesterday.

The property was constructed in 2011 and is on a long-term lease to the Commonwealth Government Department of Education, Employment and Workplace Relations.

This is CIMB-TCA's third property investment in Australia after 469 LaTrobe Street and 850 Collins Street which are both in Melbourne.

Over the past 12 months, CIMB-TCA has invested some A$450 million (RM1.43 billion).

CIMB-TCA is a unique Asian-based fund established with the objective of investing in high-grade commercial office buildings in key cities of Australia.

The fund's chairman Datuk Robert Cheim said that it will continue to take investors into the Australian real estate market and add value through sourcing, structuring, financing and ongoing asset management.

By Business Times

TAR showcases Malaysia in a tourism park

Kuala Lumpur: Themed Attractions Malaysia, in partnership with Kuala Lumpur City Hall (DBKL), will open a world-class cultural attraction called Malaysia Truly Asia Attractions in the capital in 2014.

The Malaysia Truly Asia Attractions, which forms part of the Greater KL initiative, will sit on a 26.59ha site bordered by the Tugu Peringatan, Padang Merbok, Bank Negara Malaysia’s Lanai Kijang residential complex and Istana Selangor.

This will be a one-stop centre showcasing what Malaysia is and has, that can be experienced in a few hours.

“It is an immersive interactive cultural tourism park,” Themed Attractions and Resorts Sdn Bhd (TAR)’s chief executive officer Tunku Ahmad Burhanuddin said.

TAR is the operational and management company for Khazanah Nasional Bhd’s leisure and tourism division.

TAR has a total of RM2.3 billion in investments up until 2015 to develop attractions in Malaysia.

“It will be a tourist attraction where people can see Malaysia in a nutshell,” Ahmad told Business Times in an interview.

The idea, he said, is to woo transit passengers to visit Malaysia Truly Asia Attractions. “We want them to come out (of the airport) and spend a few hours at the attraction. And we want them to go ‘Wow’! This is what Malaysia is all about.

Next time, I come, I will stay a couple days or weeks.” Apart from cultural elements, it will include gastronomical and heritage components.

“We have a forest there, so it will include experiencing a jungle,” he said, adding that the vegetation in the Lake Gardens area will be maintained.

“This is part of the Greater KL initiative to promote KL as well as promote Malaysia as a destination,” he said. Prime Minister Datuk Seri Najib Razak is expected to launch the project later this year.

By Business Times

Axis REIT buys industrial land, buildings for RM26.5m cash

KUALA LUMPUR: Axis Real Estate Investment Trust (Axis-REIT) is expanding its portfolio of properties with the proposed acquisition of two parcels of indsutrial land with buildings in Labu, Negeri Sembilan, for RM26.50mil cash.

Axis REIT Managers Bhd, the management company of Axis-REIT, said on Thursday the 29,436 sq metres of land with tenure of 99 years expiring in September 2095, was acquired from LRS Property Sdn Bhd. The acquisition was undertaken by OSK Trustees Bhd, the trustee for Axis-REIT.

Axis REIT Managers said the acquisition was to provide unitholders with stable distribution and to achieve growth in net asset value per unit of the fund.

By The Star

CIMB-TCA buys RM710m building in Canberra, its third property in Australia

It is joint venture fund's 3rd property in Australia

PETALING JAYA: CIMB TrustCapital Advisors (CIMB-TCA) has acquired another office building in Australia for RM709.6mil (A$226mil) from the Walker Corporation.

The transaction for an A-grade 12-storey office building in Canberra, which was done with a co-investment partner, is the group's third property acquisition in Australia since it entered the market in early 2011.

The premium-grade asset was constructed in 2011 and is on a long term lease to the Commonwealth Government department of education, employment and workplace relations.

The fund's other assets include 469 LaTrobe Street and 850 Collins Street, both in Melbourne.

It had also invested approximately over RM1.41bil (A$450mil) over the last 12 months.

The fund is a joint venture between CIMB Real Estate Sdn Bhd and Singapore-based TrustCapital Advisors Pte Ltd and was established with the objective to invest in high grade commercial office buildings.

““We are very pleased to have completed the acquisition of this excellent asset with a strong tenant covenant,” said CIMB-TCA fund chairman Datuk Robert Cheim in a statement.

He said the third transaction demonstrated that the fund had the clear intent, the will and the resources to execute deals that would deliver strong returns to its investors.

By The Star

Singapore office rents fall up to 8.8%

SINGAPORE: Singapore office rents declined as much as 8.8% in some parts of the citystate in the first quarter, hurt by the weaker global economic outlook that led firms to hold back their expansion, real estate consultants Colliers International said.

The fall signals the downturn in the office rental market has worsened and Colliers expects more pressure on rents.

Office values held firm in the first quarter, however, as record low interest rates and measures to cool the residential market attracted buyers to the office sector.

By Reuters