i-City to earn more from properties

Eu with a model of i-City project.

SHAH ALAM: I-Bhd, the developer of i-City, expects to see its property development segment accounting for 50% of its net profit in two to three years.

“The bulk of it will still be from property development. As for the leisure, we see a contribution of 30% to our net profits in two to three years' time, while the balance will be from the property investment segment,” group chief executive officer Datuk Eu Hong Chew said.

The leisure business posted 43% to profit margin last year. Since the launch of i-City's “City of Digital Lights,” revenue from the segment has grown from RM2.8mil in 2010 to RM17mil last year.

i-City will be investing another RM25mil to build a children's gym and a water theme park. The 10,000 sq ft gym will be opened in August 2012 while the 4-acre water theme park will be opened in November.

Upcoming developments in i-City include the one million-sq-ft shopping mall known as CityMall. The mall will be built on a 14-acre lot and will comprise a five-storey podium block and four towers for a hotel and three serviced residences. The gross development cost, which is the total cost incurred from initiation to implementation is between RM600mil and RM700mil.

Eu said the company was currently looking for a joint-venture (JV) partner with shopping mall development expertise to help build and manage the mall.

“We expect to have a minority stake of between 30% and 40%. We will let the experts manage it. The mall will be funded by the partner,” he said.

He added I-Bhd had not signed any deals for the development of the mall. However, he expects the construction for the mall to start before year-end. “We are in the building plan stage now, and expect the mall to be complete in 2015,” Eu said.

CityMall will be the only other mall to have direct access from the Federal Highway apart from Mid Valley Megamall.

A direct flyover from the Federal Highway costing RM58mil is currently under construction and will be completed in September. The project was undertaken by the Mentri Besar Inc to ease traffic flow to and from the area.

By The Star

I-Berhad to launch first KL project next year

LUXURY CONDOMINIUMS: Grand i-Residence is expected to generate RM500 million gross development value

I-BERHAD plans to launch Grand i-Residence next year, its maiden property project in Kuala Lumpur that will generate RM500 million gross development value, its chief says.

Grand i-Residence is a luxury condominium project, located on 0.43ha along Jalan Changkat Kia Peng, nearby Traders Hotel.

It was originally slated for launch at the end of 2008 and called The Peak@KLCC, but was postponed due to unforeseen circumstances.

Now that the company is bullish on the real estate market, it will proceed to develop it in a joint venture with land owner, Sumurwang Sdn Bhd.

Sumurwang is the majority shareholder of I-Berhad, controlled and founded by Tan Sri Lim Kim Hong.

Lim, via Sumurwang, bought the land at KLCC in 1993 for RM280 per sq ft.

I-Berhad is the master developer of the RM4 billion i-City here, its flagship project and only ongoing development.

"We have the development order ready but there are some adjustments, like increasing the height of the building from 41 to 50 floors, with smaller units.

"We hope to get the approval this year and launch it in 2013," I-Berhad chief executive officer Datuk Eu Hong Chew said at a media and analysts briefing yesterday.

Grand i-Residence will comprise about 450 Soho (single office/home office) units.

Meanwhile, Eu said I-Berhad is talking to international mall operators to help fund and operate the one-million-sq-ft shopping complex at i-City.

Eu hopes to ink a deal by year-end and start construction immediately, for completion in 2015.

The four-storey mall will be developed on 5.85ha, with a hotel and three residential towers sitting on top. Building construction for the four towers will commence from 2015.

Eu estimates the development cost for the mall and the four towers to be around RM700 million.

I-Berhad will also be investing RM100 million over the next five years, including RM25 million to set up a children's gymnasium and a water- theme park this year.

By Business Times

UEM Land’s planned development will help boost tourism industry in Desaru

Desaru is expected to be earmarked as the leisure and tourism region for Johor

DESARU, a tourist destination that never quite took off, seems to finally be on the right track with growing interests from investors keen to tap the area's tourism prospects.

The latest interest comes from UEM Land Holdings Bhd, which announced on Monday that it would develop 678.7 acres of land there on a 51:49 joint-venture basis with Desaru Development Corp, a unit under Khazanah Nasional Bhd, the Government's investment arm.

The proposed development, which is estimated to have a RM5.4bil gross development value, will be completed in 20 years.

“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 accommodations, entertainment and attractions,” UEM Land said in a statement.

“Such development of Desaru as an international tourist destination will be spearheaded by Khazanah,” the company added.

UEM Land said Khazanah's masterplan for Desaru would involve the proposed development of international hotels with renowned operators, two world championship golf courses, convention centre, themed attraction parks as well as other commercial and retail components.

The company also said the completion of the final 27km stretch of the Senai-Desaru Expressway, which now allows for reduced travel time between Johor Baru and Desaru, was expected to act as a catalyst for development in the area.

“The proposed project also enjoys direct spillover benefits due to its location within the centre of the main project, thus benefiting directly from the planned components under the Desaru Masterplan,” it said.

Apart from being a tourist destination, the development of Desaru will also complement Petroliam Nasional Bhd's (Petronas)proposed integrated downstream oil and gas complex in Pengerang in Johor's southeast region.

Dubbed the Refinery and Petrochemical Integrated Development (Rapid), the project is aimed at building something larger than Kertih.

“Those employed at Rapid, such as expatriates and their families, can look to Desaru, which is not too far away, as an ideal destination to unwind and relax,” said one observer.

KGV International Property Consultants executive director Samuel Tan said he was optimistic about Desaru's prospects.

“Desaru was slated to be a (major) tourist destination but it never took off. But now that Khazanah has taken over, especially with Petronas' Rapid project, Desaru should reach its potential faster.”

In an e-mail reply, PA International Property Consultants Sdn Bhd executive director V. Sivadas concurs that the development within Desaru will tie in with the oil and gas project in Pengerang.

“With an expected huge increase of skilled and expatriate staff over the next few years, residential and resort developments will enjoy the spillover effects,” he said.

He points out that there had been many plans to transform the entire Desaru belt into a major tourist destination since the 1990s.

“(But) it is only in the last one year or two that under the Khazanah leadership and direction, plans seem to be taking off in a big way.

“The Desaru development project by Khazanah covers 4,113.29 acres along a 17-kilometre coastline fronting the South China Sea. It is being proposed to be developed into a major tourism and leisure belt,” said Sivadas.

He said there would be many opportunities for leisure-based developments within the Desaru belt.

“Khazanah, however, are expected to be selective in its choices of parties. This is to prevent parties from accumulating lands but not commencing work.”

He also said there had not been many transactions of lands in the area.

“Many are either plantations held by GLCs (government-linked companies) or related parties, or alienated smallholdings held by individuals. With the strong prices for palm oil, we don't expect a rush by major land owners to immediately develop their land bank.

“It may be prudent to submit preliminary applications for development while reaping the benefits of the oil palm,” he said.

Resorts located at Desaru include Batu Layar Beach Resort, Chalet Pantai Samudra, Desaru Damai Beach Resort, Chalet D'Punggai, Pelangi Balau Resort, Hotel Hiap Hwa, the Sebana Cove & Marina Resort, Balau Bay Resort, Lotus Desaru Beach Resort, the Pulai Desaru Beach and Punggai Beach Resort.

By The Star

Ho Hup to expand concrete ops, develop properties

HO Hup Construction Company Bhd wants to further expand its ready-mix concrete business and re-enter the construction market as part of a revised regularisation plan.

Executive director Derek Wong said the company cannot depend solely on a 24.2ha freehold land in Bukit Jalil now in contention at the Federal Court and therefore needs to form contingencies to keep it running.

Ho Hup had filed a suit in 2010 to declare a joint development agreement between its 70 per cent unit Bukit Jalil Development Sdn Hd (BJD) and Malton Bhd's Pioneer Haven Sdn Bhd, as null and void.

Ho Hup was granted leave to appeal to the Federal Court on May 17 this year after the Court of Appeal had in December last year overturned the decision by the High Court, giving it full rights to develop the land.

"If the Federal Court hearing is not in our favour, the company is looking at other avenues to regularise our financial plan.

"We have been doing that in the last three to four months since the Court of Appeal reversed the decision," Wong said after the company's annual general meeting here yesterday.

"Moving forward, Ho Hup will be looking at leveraging on its track record and competitive strengths to bring in new projects and expand ready-mix concrete division, which has shown significant improvements in performance," he said.

Wong said the company has bid for two or three medium-sized Economic Transformation Programme (ETP)-related construction jobs.

In line with the increasing construction activity in the country, Ho Hup plans to expand its concrete business to two or three more locations in the Klang Valley and is scouting for a suitable location in Johor.

He added that its concrete operations, which grew by 50 per cent year-on-year in 2011, are expected to perform similarly this year.

It was learnt that Ho Hup is talking with several parties to develop properties on a joint venture basis.

Ho Hup will apply to Bursa Securities for a further extension of time, beyond June 30 2012, to submit its revised proposed regularisation plan.

Ho Hup had in July 2011 submitted a proposed financial regularisation plan to Bursa based on full rights to develop 24.2ha owned by BJD.

Wong expects the Federal Court ruling on the land matter to be made in August.

On the High Court order to buy over Zen Courts Sdn Bhd's 30 per cent stake in BJD, Wong said both parties will appoint an independent valuer next week to fix the final purchase price.

By Business Times

Ho Hup to carry on

KUALA LUMPUR: Ho Hup Construction Company Bhd is committed to growing its other businesses, even if the Federal Court does not rule in its favour in a much-awaited hearing that will determine whether it gets full ownership of a prized 60-acre freehold land in Bukit Jalil.

“The company must continue. Whatever the Federal Court's decision, there must be other contingencies,” executive director Derek Wong said after its AGM.

Wong: ‘The company must continue.’

“If the Federal Court ruling is not in our favour, the board will look at other avenues to regularise our position. We have been actively doing that since the Court of Appeal reversed the decision.

“The board has taken the position that we cannot just depend on the 60 acres to regularise.”

To recap, Ho Hup had in 2010 filed a suit to declare null and void a joint development agreement (JDA) between its 70%-owned subsidiary Bukit Jalil Development Sdn Bhd and Pioneer Haven Sdn Bhd, a unit of Datuk Desmond Lim's Malton Bhd.

The agreement was signed by Ho Hup's previous board led by Datuk Vincent Lye, a day before they were ousted in an EGM in March 2010.

Under the JDA, Ho Hup is the landowner while Pioneer Haven would be the developer.

Ho Hup is entitled to 17% of the total gross development value of RM2.5bil, or RM425mil, and stands to receive a minimum guaranteed entitlement of RM265mil.

But the company has maintained that it wanted full control of the development rights as that was a vital component to its regularisation.

The High Court's decision last June had favoured Ho Hup, but it was overturned by the Court of Appeal in December.

Subsequently, the Federal Court on May 17 granted it leave to appeal in what is seen as its last avenue to obtain the full development rights.

Ho Hup, whose financial difficulties have rendered it a Practice Note 17 company, will also apply to Bursa Malaysia for an extension of time beyond the June 30 deadline to submit its proposed revised regularisation plan.

Wong said he hoped the case was strong enough for it to be granted an extension at least until the Federal Court made its verdict.

“We want finality in the case, whether we win or lose. Then we can put the right (regularisation) plan in.”

Meanwhile, he said the company would focus on expanding its ready-mix concrete operations and reviving its once-thriving construction arm.

He said Ho Hup was in the midst of bidding for a few medium-size Economic Transformation Programme-related construction jobs, but he could not disclose their value.

In its prime, the firm's turnover from construction was about half a billion ringgit, and it was involved in large scale projects such as the North-South Expressway, parts of the Twin Towers and the Bukit Jalil stadium.

Asked whether the company possessed sufficient working capital to take on more construction jobs, he said: “We have the support of shareholders. If we win contracts, we are able to ringfence these projects and get finance institutions to look at them from a project finance basis.”

He added that the company was looking at developing properties in the Klang Valley and Johor on a joint-venture basis.

On the buyout of Zen Courts Sdn Bhd's 30% stake in Bukit Jalil Development, he said Ho Hup would appoint an independent valuer either this or next week to ascertain the value of the former's equity.

The High Court had on March 27 ordered that Ho Hup buy Zen Courts' shares in Bukit Jalil Development on a price to be determined by the latter's net tangible asset as at March 27, which needs to be valued by a mutually agreed independent valuer between Ho Hup and Zen Courts.

By The Star

Fajar Baru submits plans for condo projects

KUALA LUMPUR: Fajar Baru Builder Group Bhd is believed to have submitted plans to the local authorities in Selangor and Kuala Lumpur in a move to venture into the property development sector, people familiar with the matter said yesterday.

It is understood that the construction company had submitted the plans over the past three months to build residential condominium units in Puchong and Jalan Ipoh.

A company official, speaking on condition of anonymity, confirmed the matter, but noted that the company has yet to receive the full suite of approvals yet. "We are targeting for a launch in the early part of next year," said the official.

Fajar Baru, which has about some RM1 billion worth of ongoing construction jobs at hand, bought the land in Puchong for about RM39.94 million late last year.

It also bought 0.92ha land in the Jalan Ipoh-Sentul area last year for RM23.6 million. The land is said to be a gold mine as it is one of the nearest entry point to the city.

"The land in that area should easily fetch more than RM500 per sq ft," said the source.

RHB Research recently noted that for the year ending June 2012, Fajar Baru had secured five key contracts, boosting its year-to-date new contracts to RM668 million from RM368 million and outstanding order book by 46 per cent to RM925 million from RM625 million.

"... We gathered from Fajar Baru during a recent visit that it expects to put onto the market by the first quarter of next year a high-rise serviced apartment project in the Sentul/Jalan Ipoh area," RHB Research said in a report last month.

Business Times was told that the high-rise project in Jalan Ipoh will have a gross development value of about RM280 million.

For the year ended June 30 2011, Fajar Baru registered a net profit of RM13.6 million, but Kenanga Research expects its profit to rise to RM15.8 million this year and RM27.1 million by 2013.

The research house has an outperform call on the stock with a RM1.27 target price.

By Business Times

Starhill REIT proposes to buy Marriot hotels

Starhill Real Estate Investment Trust's (REIT) has entered into three separate hotel business and property sale agreements to buy the Marriot hotels in Sydney, Melbourne and Brisbane for RM1.31 billion.

The agreements were entered by Starhill REIT indirect wholly-owned unit, Pintar Projek Sdn Bhd, with Commonwealth Managed Investment Ltd, 30 Pitt Street Pty Ltd, 515 Queen Street Pty Ltd and Lonex Pty Ltd.

AmInvestment Bank Bhd, the manager of the trust, said the proposed acquisition was expected to be funded through a combination of bank borrowings and cash.

"The proposed acquisition is expected to contribute positively to Starhill REIT's distributable income and distribution per unit," it said in a filing to Bursa Malaysia.

Starhill REIT added that the proposed acquisition would reposition the company with stable fixed lease rentals from its existing properties and variable income from the Marriott Hotels.

AmInvestment said the proposed acquisition would also enhance Starhill REIT's position as a pure play international hospitality REIT.

The trust's property asset value would also increase from about RM1.58 billion to about RM3 billion comprising assets located in Malaysia, Japan and Australia.

By Bernama

Starhill REIT to buy Marriott hotels in Australia for RM1.3b

KUALA LUMPUR: Starhill Real Estate Investment Trust (Starhill REIT) is acquiring the hotel properties and business assets of three Marriott hotels in Australia for A$415mil (RM1.3bil) cash.

YTL Corporation Bhd managing director Tan Sri Francis Yeoh Sock Ping said on Wednesday the acquisition of these hotels would enlarge the trust's portfolio to about RM3bil from RM1.58bil now.

Starhill REIT had on Wednesday inked the agreements to acquire the Sydney Harbour Marriott Hotel, Brisbane Marriott Hotel and Melbourne Marriott Hotel from Commonwealth Managed Investments Ltd, 30 Pitt Street Pty Ltd, 515 Queen Street Pty Ltd and Lonex Pty Ltd.

Yeoh, who is also CEO of Pintar Projek Sdn Bhd, the manager of Starhill REIT, said the acquisitions would result in more than half of Starhill REIT's property value constituted by its hotel assets in Australia and Japan.

He said the acquisitions would make this the largest portfolio of overseas property investments of any Malaysian REIT.

"The acquisition represents a yield accretive opportunity for the trust, generating two income streams, firstly, stable fixed lease rentals arising from its existing property portfolio and, secondly, variable income from the three Marriott hotels, increasing the potential for distribution per unit growth and variations.

By The Star

Iskandar Waterfront serves conditional mandatory takeover on Tebrau Teguh

KUALA LUMPUR: Iskandar Waterfront Holdings Sdn Bhd (IWHSB) has served a notice of conditional mandatory takeover offer on Tebrau Teguh Bhd.

Tebrau Teguh said the Feb 13 conditional share sale agreement where IWHSB would acquire 222 million Tebrau Teguh shares or 33.15% from Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ) had become unconditional on Wednesday.

"IWHSB is obliged to extend a mandatory take-over offer to acquire all the remaining 447.72 million Tebrau Teguh shares (66.85%)" for 76 sen per share.

IWHSB had received an irrevocable undertaking from KPRJ that it would not accept their remaining shareholding of 53.59 million shares representing 8% of the Tebrau Teguh's paid-up capital.

"The board of directors of Tebrau Teguh will hold a meeting tomorrow to deliberate on the offer and upon its deliberation, announce whether it intends to seek an alternative person to make a take-over offer for the offer shares," it said.

By The Star

Wellcall arm buys land for RM4.6m

Wellcall Holding Bhd's wholly-owned subsidiary, Wellcall Hose (M) Sdn Bhd, has entered into a sale and purchase agreement to acquire a leasehold vacant industrial land at Kinta, Perak, for about RM4.635 million.

The land, measuring approximately 3.6 hectares, is located in Mukim Sungai Terap, Kinta, and a kilometre away from Wellcall's principal place of business and factories, the group said in a filing to Bursa Malaysia today.

The land will be used by Wellcall Group to build a new factory to cater for the anticipated increase in demand for its industrial rubber hose and also for future growth in its business.

The acquisition is expected to be completed by year-end and will be satisfied entirely in cash.

By Bernama

Chinese green building expert to share expertise

PETALING JAYA: In the effort of promoting a greener and more efficient living environment, Green Building Index Sdn Bhd (GBI) had invited the senior vice president of BROAD Group from China, Juliet Jiang, to share her expertise in building a green building efficiently at the Green Building International series 2012.

This Chinese construction company completed a 30-storey tower that currrently serves a hotel in Hunan province in 15 days. The video of this project had drawn the attention of millions of Youtube viewers since it was posted.

“We hope the focus is not just on the amount of time taken to complete this project. We would like to emphasise that we do not compromise quality in the process and would like to highlight the sustainability technology behind it,” Jiang said in a statement.

“The building had passed the resistance test of a level nine earthquake. It conserves energy of up to five times compared with that of a conventional construction, and provides air that is 20 times purer than the traditional buildings through our innovative air purification system.”

The accomplishment is made possible because 93% of the building materials are manufactured in the factory. The company welcomes global franchisees to adopt this model and build such factories locally. In supporting the company's value to be green, the factory should be located no more than 500km from the construction site.

There are currently six factories in China in different provinces. Besides China, BROAD Group has also set foot in India. These franchisees have made full payment for the transfer of technology which costs US$34mil for a population of 10 million and US$50mil for a population of 50 million.

Architect Dr Tan Loke Mun, one of the GBI Accreditation Panel, opined that the compressed period of accomplishing a construction project would reduce the work hazards faced by construction workers on the site, wastage and traffic jams.

“Financially, this will help construction companies save up on interest costs,” he said.

The organiser of the series hopes that Malaysians will be inspired to make a difference to create a more sustainable and efficient living environment through this kind of innovation.

“All parties ranging from the consultants to the end users will benefit if the span of construction projects are cut. This can reduce the number of abandoned projects,” Tan said.

By The Star

EPF buys 5.04% stake in YNH

KUALA LUMPUR: The Employees Provident Fund (EPF) has emerged as a substantial shareholder in YNH Property Bhd with an effective interest of 5.04% in the property company.

The EPF bought 20.74 million of YNH's shares on June 6, circulars issued to Bursa Malaysia showed.

Scotland-based Aberdeen Asset Management PLC had also acquired an additional 588,500 shares of YNH on June 5, increasing its stakes to 12.81%, documents showed.

By The Star