Naim turning old Bintulu airport site into integrated upmarket project with RM2bil GDV

An artist’s impression of Naim’s Batu Lintang mixed development project with gross development value of RM2bil.

KUCHING: Naim Holdings Bhd will develop the site of the old Bintulu airport into an integrated upmarket commercial and residential project.

The new city centre for the booming industrial town will comprise condominiums, street mall, international class hotel, shopping complex and other related facilities.

Corporate services senior director Ricky Kho said the project on about 12ha would have a gross development value (GDV) of RM2bil.

“It will be implemented in two phases, with phase one targeted for launch by year-end,” he told StarBiz.

Kho said the proposed street mall would feature commercial shophouses and small home offices while the three-star hotel would have about 200 rooms.

The condominium blocks would house some 600 units for sale to both local and foreign buyers.

“Phase one development is expected to take five years. Phase two will involve construction of the shopping complex,” he added.

Naim, Sarawak's biggest property developer, is expected to own and operate the shopping complex as a long-term investment.

Kho said there was a strong demand for quality accommodation like hotel, condominium and serviced apartment in Bintulu with the big influx of expatriates involved in the development of energy-intensive industries in Samalaju Industrial Park.

Samalaju is one of the five growth nodes of Sarawak Corridor of Renewable Energy (SCORE) and it will become the state's new heavy-industry centre.

Bintulu is now undergoing its third industrial boom. Besides the setting up of heavy industries like aluminium and manganese ferrosilicon smelters, the city also has two other major projects the Samalaju deepsea port and Petroliam Nasional Bhd's Bintulu liquified natural gas Train 9.

Naim will make its Bintulu integrated mixed development a major retail centre, leveraging on the growth of SCORE.

Meanwhile, Kho said Naim was expected to commence construction work of its proposed RM1.5bil mixed development in Batu Lintang here in the next few months as planning approval had been obtained.

The joint-venture project will involve the development of a 27-storey apartment, 18-storey condominium, 36-storey office tower, shopping mall, 17,000-sq-ft showroom, multi-storey car parks and water theme park. The prime land, which was previously occupied by government quarters, has been cleared.

He said phase one would involve some apartment and condominium units.

Naim's joint-venture partners in the project are charitable trusts, Lembaga Amanah Kebajikan Masjid Negeri Sarawak and Tabung Baitulmal Sarawak.

Kho said Naim had chalked up strong sales of properties this year, boosted by the high take-up rates of newly launched schemes in existing townships in Miri and Kota Samarahan.

“We have registered sales of about RM125mil as at May 31,” he added. Last year's sales was RM184mil an increase of RM42mil over 2010.

He said the top-selling properties were single-storey semi-detached and terraced houses in Miri's Permyjaya township (Naim's flagship development) and terraced units in Desa Ilmu in Kota Samarahan.

Naim is also recording good sales for its walk-up apartments launched recently in up-market Riveria satellite township near here.

The company has set up an office in Kota Kinabalu to prepare for its property development expansion in Sabah.

Naim, which has a land bank of about 1,050ha in Kuching, Miri and Bintulu, is on the lookout to acquire more land.

By The Star

KL land price too high?

The piece of land, which is located at the intersection of Jalan Bukit Ceylon and Jalan Ceylon, is situated on a hilly area.

Freehold land along Jalan Bukit Ceylon selling for RM700 per sq ft

KUALA LUMPUR: The three parcels of freehold land along Jalan Bukit Ceylon, Kuala Lumpur that was recently put up for sale are priced on the high side, property professionals said.

Last week, advertisements appeared for the sale by tender of three parcels totalling 36,563 sq ft with a reserve price of RM26mil, or about RM700 psf.

“On an as-is' basis, this is quite high. I would reckon a price of RM500-RM550 is more realistic considering its residential use status,” a valuer said.

Sources familiar with the sale said interested parties have to pay more if they were to convert it for commercial use.

“Commercial status fees can vary and it depends on a case to case basis by the authorities. It could be that after conversion, the cost of this piece of land may rise up to RM1,500 psf or more, which further adds to the costs of development,” sources said.

“If you are a developer, you must ask yourself whether you will be able to make a profitable sum,” he said.

However, a valuer said RM700 seems fair and the residential status was a non-issue.

“A developer can still build residential units and owners will not have to pay commercial rates for utilities. Although it may not be close to rail links, it is located in the city,” said a source.

StarBiz understands that the piece of land, which is located at the intersection of Jalan Bukit Ceylon and Jalan Ceylon, is situated on a hilly area and prospective developers who may be eyeing the piece of land will need to carry out additional levelling works, which will further add to the costs of development.

“I would reckon a 20% margin is comfortable before developers actually decide to do this (carry out development work).

“Ground works will definitely add a substantial amount to the costs as well,” a developer said.

Another property consultant used the example of a piece of prime freehold land measuring 50,063 square feet located in nearby Jalan Tengah, which is just next to Eastern & Oriental group's St Mary's Residences.

This piece of land is being transacted at about RM100mil, which prices it close to RM2,000 psf.

However, this piece of land has a commercial status, which does not require any additional costs for conversion.

It is also located in a relatively more centralised area nearer to public transport facilities.

By The Star

Home prices in suburban Klang Valley expected to hold steady

Low Yat Group’s 2,670-acre Bandar Tasik Puteri township in Rawang.

KUALA LUMPUR: Property prices in suburban areas in the Klang Valley may be stable in the next two years, as there would be a lot of supply to cater to the demand.

Low Yat Group executive director Low Su-Ming said she believed that “prices will be holding the way they are because there is more supply coming up in the northern and southern corridors” and that developers were already branching out to areas beyond the first tier locations.

“I don't think there will be an acceleration unless the development is prime but having said that, construction cost and land prices will not come down,” she told StarBiz.

Low said that while the domestic demand for properties was varied, there was unwavering demand for landed property among Malaysians.

Low: ‘Property prices will be holding the way they are.’

“There will continue to be demand for these homes and more Malaysians are also looking for landed properties at affordable prices. People are going out (of the urban areas) and developers will go where there is a catchment market.”

Whether prices would appreciate and at what rate, Low maintained this will depend on the developers' distinctive concepts and product pricing. The Low Yat Group has a mid-market 2,670-acre township development in Bandar Tasik Puteri, Rawang that is 50% completed with a 50,000 population.

Low said the township has become more appealing now as more infrastructures have been introduced to the area, notably highways that shortened the time it took to travel into the city centre.

“There is a choice (for Malaysians). That's the beauty of Klang Valley. You can own an inner-city dwelling yet live 20 minutes away and have a huge mansion of your dreams,” she said, noting that it was something intense, highly developed cities like Hong Kong and Singapore could not offer.

“We have a young and growing population. In the Klang Valley, we have a great deal of opportunities to make our city into a well-developed and sustainable city by having the various townships linked up through infrastructures like highways,” she said.

Of a recent report about rising prices in Penang, Low said that an effective masterplan for sustainable development was needed to overcome concerns from Penang's population.

“Penang is undergoing a transition. In the next three to five years, it should join the ranks of world class beach and tourist destinations like Bali, Phuket, Singapore and Hong Kong.

“It will also become a choice destination for high net worth individuals who come here here the Malaysia My Second Home programme,” she said, adding that this scenario should be perceived positively.

“As long as guidelines are in place and administered efficiently, the island will gain from better quality projects that are designed by internationally acclaimed architects and master planners,” she said.

Low Yat has been in the Penang property scene since the late 1970s building resorts, hotels and condominiums.

Currently, it has an upcoming five-star hotel project with 382 rooms along Northern Road on the island.

The project is scheduled to commence construction in the first quarter of next year.

By The Star

UEM Land plans residential resort in Desaru

UEM Land Holdings Bhd has proposed to develop a high-end residential resort surrounding two golf courses in Desaru, Johor, and a beach club to cater to the residents.

The project will be undertaken in collaboration with wholly-owned subsidiaries of Desaru Development Holdings One Sdn Bhd (DH1), a subsidiary of Desaru Development Corporation Sdn Bhd (DDC).

"The proposed development will be undertaken via 51 per cent-owned subsidiaries of UEM Land (Dev Cos)," CIMB Investment Bank Bhd said said in a filing on behalf of UEM Land with Bursa Malaysia today.

The proposed development will be undertaken in respect of land parcels to be acquired by Dev Cos with an aggregate gross area of approximately 678.70 acres (274.7 hectares) and at a purchase consideration of RM485.3 million.

"The proposal is in line with the UEM Land Group’s continuous effort in sourcing new land bank and property development opportunities to improve and sustain its long-term earnings growth," the investment bank said.

Desaru is expected to be earmarked as the leisure and tourism region for Johor, offering an integrated resort lifestyle experience with world-class leisure and tourism accommodation, entertainment and attraction.

Such development of Desaru as an international tourist destination will be spearheaded by Khazanah Nasional Bhd via DDC.

Khazanah’s masterplan for Desaru involves the proposed development of international hotels with renowned operators such as Aman Resorts, Sheraton and the Datai, two world championship golf courses designed by distinguished golfers, Ernie Els and Vijay Singh (i.e. South Course and North Course), convention centre, themed attraction parks as well as other commercial and retail components.

The recent completion of the final 27-km highway stretch of the Senai-Desaru Expressway in June 2011, which now allows for reduced travel time between Johor Baru and Desaru, is expected to act as a catalyst for the development in the area.

Based on the UEM Land Group’s preliminary feasibility and concept plans for the project, the proposed development is estimated to have a gross development
value of approximately RM5.4 billion and is expected to contribute positively to its future earnings the group.

Subject to the necessary development approvals being obtained, the UEM Land Group targets to commence the proposed development by 2013 with completion of
the final phase within 20 years thereof.

By Bernama

Daiman buys Johor land for RM64.5m

Daiman Development Bhd has proposed to acquire two pieces of freehold land in Tebrau, Johor, from Johor Land Bhd for RM64.463 million.

In a filing to Bursa Malaysia today, Daiman said its wholly-owned unit, Daman Impian Sdn Bhd, has entered into a sales & purchase agreement to acquire the land, namely, Parcel A and Parcel B, measuring 34.68 hectares (ha) and 37.83ha, respectively.

Daiman said the acquisition would enable the company to further expand its landbank in key growth markets and to continue with its property development activities in the region.

"Premised on the continued growth and development in the property sector in Johor Baharu, the acquisition will enable the group to contribute more dwellings
and home on the back of an increase in demand for housing and generate stable cash flow for the company.

"Barring any unforeseen circumstances, the properties are expected to be completed in the medium term between five and 10 years," Daiman said.

It added the acquisition is not expected to have any material effect on its earnings for the financial year ending June 30, 2012, however, it is expected to
contribute positively to the future earnings of the group.

By Bernama

MRT Corp: No plans to buy BB Plaza

KUALA LUMPUR: Mass Rapid Transit Corp Sdn Bhd has no plans to buy the Bukit Bintang Plaza (BB Plaza) to help build an MRT station.

Instead, MRT Corp said, it will work with the government to build an underground station integrated with BB Plaza.

MRT Corp chief executive officer Datuk Azhar Abdul Hamid said it is in talks with the government on this, adding that the plan will do away with the need to involve private properties in completing the project and at the same time provides a golden opportunity to re-position the almost 40-year-old BB Plaza, Azhar said.

"It must be clarified that there has never been any plan to acquire BB Plaza. Our principal focus is to build the Sungai Buloh-Kajang MRT Line. We do not want to be distracted by property development at this stage," he said in a statement yesterday.

Potential construction of the Bukit Bintang station presents several opportunities including a chance for UDA Holdings to redevelop BB Plaza, Azhar said.

"The other end of Jalan Bukit Bintang has seen rapid redevelopment over the past few years, and this has clearly added Kuala Lumpur's appeal to both locals and tourists alike. BB Plaza can be part of this new Bukit Bintang. The 1970s-built BB Plaza has the potential to be the icon of the area," he said.

Another opportunity will be on enhancing and elevating the Bumiputera agenda, as opposed to using cheap rental as a means to incentivise and promote their participation in trade.

"Bumiputeras can now shift gears and become entrepreneurs. Of course an area for small traders can be built into the redeveloped mall, but they must also be given the opportunity to move up the value chain. This elevates their role and is value-adding, so MRT Corp sees no reason why UDA's role in promoting active participation of Bumiputeras in retail in urban areas has to be compromised with redevelopment. In fact, it can be enhanced," said Azhar.

By Business Times

Malaysians in UK shopping spree

GOOD INVESTMENTS: Sime Darby and SP Setia join the likes of AirAsia and Berjaya Group owners to buy key British assets

AT last, it took two Malaysian giants to defeat Russian billionaire Roman Abra-movich's Chelsea for prized assets.

The mighty Barcelona and then German heavyweight Bayern Munich failed to beat Chelsea for the coveted Champions League trophy. Before that, British powerhouse Liverpool was frustrated by the Blues for the English FA Cup.

But Chelsea was denied another prestigious trophy, a non-footballing one though, by Sime Darby Bhd and SP Setia Bhd.

Malaysia's oldest conglomerate and largest property company, respectively, teamed up to shock Chelsea (and 14 other bidders, including British property magnet Godfrey Bradman) and win the tender for the iconic Battersea power station.

Sime Darby and SP Setia are the latest Malaysian investors who find Britain, especially London, extremely attractive as an investment (and playground) location.

Permodalan Nasional Bhd already has three properties in London in One Exchange Square, 90 High Holborn and Milton and Shire House.

Berjaya Group founder Tan Sri Vincent Tan has bought Cardiff City football club. So has AirAsia's Tan Sri Tony Fernandes with his Queens Park Rangers football club.

Tabung Haji is currently shopping for London assets as part of its plans to splash some RM1 billion on overseas investments.

But what makes Britain so compelling? Are Malaysian investors risking themselves too much? Are they paying too much for the assets? Why not invest in assets back home, which are cheaper, given the exchange rate factor?

Property experts say Britain is compelling because there are few barriers to buying and selling commercial and residential assets there. It also has a liquid market with good legal and regulatory infrastructure.

In short, buying and selling properties there are reliable and easy.

When you buy a building there, as the investor and owner of the building, your responsibility is just to make sure the building is there and collect your lease payment. The responsibility for maintaining the building, both inside and outside, rests with the tenant.

Back to the Sime Darby-SP Setia venture.

The RM2 billion price tag for the old power station that once graced the cover of British rock group Pink Floyd's "Animals" album in 1977 is surely hefty. But when comparing with other prime land parcels in London, it appears cheap.

The former parcels have transacted for more than STG1,000 (RM4,900) psf, but the Battersea power station, which sits on a 14.56ha site on the south bank of River Thames, works out to STG235 psf.

Despite the current economic contraction, UK properties remain favourable given the ultra-low interest rate environment, ongoing geo-economic uncertainties and relatively weak British pound.

According to the latest Nationwide House Price Index, British house prices rose 0.3 per cent quarter-on-quarter but were lower by 0.7 per cent year-on-year.

For office spaces, London properties earned an average rent of RM497.95 psf, the highest among 38 key European cities.

So aren't Sime Darby and SP Setia getting (or buying) a great trophy?

By Business Times

The foreign hypermarket dilemma

DETERRENT: Sudden changes and ad-hoc rules governing their operations may not be the best selling points

The probability of a new foreign hypermarket player in the likes of Walmart, Costco and Metro entering Malaysia is close to nil.

A foreign player here not only has to adhere to stringent regulations on expansion and other requirements but brace itself for ad-hoc rules that most often than not involve extra costs.

Rules governing foreign hypermarket operations in Malaysia have changed numerous times since 2001, so much so that it is easy to lose count on those changes that have been made.

At present, the rules governing foreign hypermarkets in Malaysia come under The Guidelines on Foreign Participation in the Distributive Trade Services Malaysia 2004 (revised in 2010).

The guidelines, to name a few, require hypermarkets to be located beyond the 3.5km radius of a town centre, have a floor size larger than 5,000 sq metres and that only one hypermarket is allowed for every 250,000 population.

The initial rules by the then Domestic Trade and Consumer Affairs Ministry, coincidentally shortly after Tesco announced its entry into Malaysia, were to stop the death of sundry shops.

The ministry started receiving complaints that the expansion of foreign hypermarkets was to the detriment of the traditional mum-and-pop stores.

There were three other major foreign players already in the market at that time - Carrefour, Giant and Makro Cash & Carry.

So, for each new location identified for a new store, an impact study (roughly costing RM25,000) on the neighbourhood kedai runcit has to be conducted.

Ad-hoc rules, some later incorporated into the guidelines, were made when, for example, Tesco decided to operate its stores 24 hours. The ministry wasted no time in coming out to say that no foreign hypermarkets would be allowed to operate around the clock.

Several other rules were introduced along the way.

A five-year freeze on openings in certain location was imposed and about two years ago, the ministry decided that it would not issue new licences but simply swap old unused licences for new ones.

And then, there are other obligations that a hypermarket operator has to adhere to.

Each foreign player had to nurture and teach local small- and medium-sized enterprises (SMEs) how to label and package their products. In fact, a few years ago, it was not uncommon to hear that the more these hypermarkets helped the SMEs, the more brownie points a hypermarket got in terms of being considered for a new licence.

More recently, Tukar (small retailer transformation programme) was introduced.

Hypermarket operators are to help sundry shops to modernise and efficiently manage their stores to improve their competitiveness. Each hypermarket is required to pledge that it will transform a certain number of stores.

The most recent ruling is for the need to hold a public hearing when the population to hypermarket ratio is not met. While this appears to be a good solution as it allows the community to decide if they wanted a foreign hypermarket player in the locale, some local councils simply felt that they had no obligation to hold a public hearing.

This simply means you cannot open a store if they don't hear you out. And if a hearing is held, any expenses incurred are likely to be borne by the hypermarket operator.

Investment is not restricted to expansion but a player must be prepared to spend money on impact assessment, SME education, promoting local products and even the Tukar programme.

To be clear, only foreign hypermarket licences are granted by the ministry and only foreign players have to adhere to these guidelines.

There are no restrictions on where local hypermarket operators can open their stores nor where they can source their products from.

So, is it worth going through all this trouble and enter the market as a new player? Possibly not.

The best avenue to expand for a new entrant would be via acquisition of an existing chain.

Based on trend over the last decade, it is pretty safe to assume that more changes can be expected in the future to regulate the industry.

By Business Times