Medini Iskandar to build condos with Chinese firm

ISKANDAR Investment Bhd (IIB)'s subsidiary, Medini Iskandar Malaysia Sdn Bhd, has teamed up with China's Zhuoda Real Estate Group to build 2,600 units of high-end condominiums in Medini, Johor.

The condos, with an estimated gross development value of RM2.6 billion, will be developed over two phases and completed in five years.

The project, Zhuoda's maiden overseas venture, will be undertaken by a joint-venture company - Zhouyuan Iskandar Sdn Bhd in which Medini Iskandar has a 20 per cent stake.

The project, tentatively named Medini International, will be built at a cost of between RM600 million and RM700 million, said Wang Bin Wu, chief executive officer of Zhouyuan Iskandar.

The Chinese group was attracted to invest in the area due to Medini-specific incentives such as tax exemption and no restriction of sales to foreigners, he added.

Sales of the units, the cheapest of which in Phase One is expected to be sold at around RM1 million, will be targeted mainly at Singaporeans, Chinese, Malaysians, Koreans and the Japanese.

IIB's president and chief executive officer Datuk Syed Mohamed Syed Ibrahim is confident the units will have a good take-up rate, given that recent property launches in Iskandar Malaysia have been well received, especially after the completion of some infrastructure projects under the 9th Malaysian Plan.

"There is, in fact, now upside potential for new quality offerings in the market with the completion of the infrastructure projects," he told reporters here yesterday after formalising the joint-venture agreement with Zhuoda's Beijing-based unit, Qingdao Zhuoyuan Investment Holdings.

Medini, located in the Nusajaya development zone, is envisioned to be the central busiest district of Nusajaya.

By Business Times

Iskandar still offers potential for price upside

KUALA LUMPUR: There is still an upside potential for residential property prices in Iskandar Malaysia, Johor, as the infrastructure is being completed and catalytic projects to lure more investments are still coming in.

Medini chairman Jamil Muttalib (left) exchanging documents with Wang.

Iskandar Investment Bhd president cum chief executive officer Datuk Syed Mohamed Ibrahim said locations that did not have immediate development potential would have better capacity and capital value with the completion of infrastructure projects such as highways.

He said the average price of a high-rise residential unit, which has not risen much in the last 10 years, hovering in the region of RM300 to RM350 per sq ft (psf), was now seeing higher prices.

Syed Mohamed said when UEM Land Holdings Bhd launched their first waterfront project and Imperia (condominium), the value of the unit was about RM750 psf.

“Following this success, Dijaya Corp Bhd launched their project near Danga Bay at an average of RM650 psf,” he said, indicating that capital value of real estate in Nusajaya had appreciated. “It is not true that there is an oversupply of residential properties in Johor. (Otherwise) these developers would not achieve this kind of success.”

“The upside potential is just the prices alone. When you develop, you are assured of a good take-up (rate) of all your products. With better infrastructure, you will be able to fetch a premium of the prices of your products,” Syed Mohamed said after a signing ceremony between Iskandar Investment Bhd's subsidiary, Medini Iskandar Malaysia Sdn Bhd and Qingdao Zhuoyuan Investment Holding's Square Stone Holdings Sdn Bhd to build high-end condominium with an estimated gross development value (GDV) of RM2.6bil.

The high-rise property proposed to be known as Medini International starts from an average price of RM750 psf targeting buyers from Singapore, China, Malaysia, Japan and Korea.

The joint-venture company Zhouyuan Iskandar Sdn Bhd would develop the project in three different phases. Phase one and two covers a 16-acre land that is estimated to be completed within seven years. The project would take off at the end of this year.

Meanwhile, Zhuoyuan will be the sole developer of phase three with an estimated GDV of RM1.5bil.

Square Stone Holdings Sdn Bhd and Zhuoyuan Iskandar Sdn Bhd chief executive officer Wang Bin Wu said it was Zhuoyuan maiden foreign venture and the China company was attracted to incentives such as tax exemption and no sales restriction to foreigners to invest in Iskandar.

“We are also fascinated with the presence of catalytic projects like Legoland and EduCity which would add value to the entire development,” Wang added.

By The Star

Office rentals in KL suburbs seen rising

KUALA LUMPUR: Rentals for purpose-built offices in suburban areas outside Kuala Lumpur are expected to rise with vibrant business activities, good information and communications technology (ICT) and government projects there, said the valuation and property services Department (JPPH) of the Finance Ministry.

“Domestic and foreign investors in the region will also make it attractive,” said Dr Zailan Mohd Isa, director of the National Property Information Centre (NAPIC), a unit under JPPH.

She was speaking to reporters after the launch of the Purpose-Built Office Rent Index (PBO-RI) for Federal Territory of Kuala Lumpur for the first to fourth quarters 2011 by Deputy Finance Minister Datuk Dr Awang Adek Hussin.

The first rent index of its kind in South-East Asia was developed by NAPIC to provide a guide on current office rentals in Kuala Lumpur besides being a benchmark of the country's financial stability.

It comprises sub-indexes for four main regions - the KLCC-Golden Triangle (KLCC-GT), central business District (CBD), within city centre (WCC), and selected suburban areas.

According to the index, the KLCC-GT region was the most sought after location in the city in 2010, with the highest average rentals among the four regions.

In the fourth quarter of 2011, average office building rental per sq ft was RM4.66 in KLCC-GT, RM3.27 in CBD, RM3.36 in WCC and RM3.51 in the suburbs.

JPPH director-general Datuk Abdullah Thalith Md Thani said the department intends to produce the index every half-year for the country's main cities including George Town and Johor Baharu.

By Bernama

Setia Haruman to focus on purpose-built buildings

SETIA Haruman Sdn Bhd, the master developer of Cyberjaya, will focus on purpose-built buildings to generate recurring income.

Purpose-built buildings are developed according to a prospective tenant's requirement.

Setia Haruman chairman Tan Sri Mustapha Kamal said such types of buildings can be part of a real estate investment fund (REIT) portfolio.

Mustapha was speaking to reporters after a tour of Cyberjaya with Minister of Internationl Trade and Industry (Miti) Datuk Seri Mustapa Mohamed.

Setia Haruman officials also had a meeting with Mustapha to further promote Cyberjaya as an IT hub among world-class companies.

Mustapha said Cyberjaya offices are attractive for investors as they have between seven per cent and eight per cent yield. Average rental there, including service charges, is about RM5.50 per sq ft.

Setia Haruman plans to build more residential, commercial and entertainment units in the coming years for its current 50,000 strong community. There are over 300 firms, including HSBC, Hewlett Packard, Shell and Dell operating in Cyberjaya at the moment.

Over the next five years, 16 major developers will build properties with an estimated gross development value of RM20 billion. A total of RM10 billion worth of projects have been completed.

By Business Times

Setia Haruman RM20b investment plan on track

CYBERJAYA: Cyberjaya's flagship developer Setia Haruman Sdn Bhd's RM20bil investment plan is on track and now it wants to attract 10 high-impact companies to set up operations in the ICT hub of Malaysia.

Under its RM20bil investment plan over the next five years, the developer said RM2bil had been invested in the first half of this year.

Setia Haruman's strategy is to develop purpose-built projects that will fulfill the needs of foreign companies seeking a footing in Cyberjaya.

High-impact companies are defined as organisations that can offer high-value employment, be it local or multi-national companies.

Chairman Tan Sri Mustapha Kamal Abu Bakar said at a media conference here yesterday that Cyberjaya developments needed a paradigm shift from merely developing commercial buildings to creating a liveable environment for the companies' staff.

“We have come to a tipping point where we cannot get investors to come in if we do not provide facilities for them,” he said, noting that Setia Haruman will take on a “campus development” concept.

Setia Haruman intends to build residentials, offices, commercial units and entertainment outlets.

“Cyberjaya is going to be a vibrant place in the next five years and the whole development needs to grow organically,” Mustapha said.

He added that the companies would provide high-value employment which “if happens, the dream of become a high-income population will be realised”.

Mustapha said Setia Haruman would lease the commercial buildings and stand to gain from a recurring income stream. It will also sells some units to real estate investment trusts.

“Due to uncertainties, investors prefer to come and rent (buildings),” he said, adding that the rental should bring in 7% to 8% annual yield, making it attractive to REITs.

Mustapha said the rental for Setia Haruman's commercial property in the area was currently US$5.80 per sq ft, including service charge and maintenance.

Setia Haruman has another 1,000 acres of land to develop. It has developed 3,000 acres while another 3,000 acres allocated for utilities.

In total, Setia Haruman has developed RM10bil worth of projects in Cyberjaya.

Meanwhile, International Trade and Industry Minister Datuk Seri Mustapa Mohamed, who was also present, said that the place needed to be further promoted internationally.

The minister said there were 50,000 people living and working in Cyberjaya now compared with 20,000 in 2004.

“There are also over 300 companies here such as HSBC, Dell, Shell, HP which are some of the major employers. This is the place to develop if we are talking about high-value jobs for Malaysians,” he said.

Mustapa said the ministry would work together with Setia Haruman to promote the world-class facilities and infrastructure to global companies to locate their operations here.

By The Star

Tabung Haji has cash to buy more properties

KUALA LUMPUR: Lembaga Tabung Haji, which is in the midst of finalising its first commercial property acquisition in London, still has the cash to make more acquisitions going forward.

Its group managing director/chief executive officer Datuk Ismee Ismail said the pilgrims fund board has only used half of the RM7 billion that it has allocated to acquire real estate in Malaysia and overseas.

In an interview, he said the RM7 billion accounted for 20 per cent of the total fund managed by Tabung Haji, currently amounting to RM35 billion.

"I think we are still under-investing. The investment in real estate has not touched RM7 billion. Our focus firstly will be on properties in Malaysia, which we have started for the past three years," he said.

Ismee said the remaining RM3.5 billion may not be used up entirely this year even though there were many viable properties up for grabs.

By Bernama

Lembaga Tabung Haji has only used half of its RM7bil fund for properties

KUALA LUMPUR: Lembaga Tabung Haji (LTH), which is in the midst of finalising its first commercial property acquisition in London, still has the cash to make more acquisitions going forward.

Its group managing director/chief executive officer, Datuk Ismee Ismail, said the pilgrims fund board had only used half of the RM7bil that it has allocated to acquire real estate in Malaysia and overseas.

Ismee: ‘I think we are still underinvested.’ — Bernama

In an interview with Bernama, he said the RM7bil fund accounted for 20% of the total fund managed by LTH, currently amounting to RM35bil. “I think we are still under-invested. The investment in real estate has not touched RM7bil. Our focus firstly will be on properties in Malaysia, which we have started doing that for the past three years,” he said.

Ismee said the remaining RM3.5bil allocation may not be used up entirely this year even though there were many viable properties up for grabs. “Buildings are plenty but we have to be cautious in our evaluation before acquiring any of them.

“We have to ensure the returns are competitive every year, so we have to study the types of investments that will give recurring income and I believe the property sector is one of them,” he said.

On the proposed acquisition of commercial buildings in London, he said, the deal, which was estimated to be worth 165 million pound sterling, was expected to be completed by this September.

“In UK, we wanted to buy commercial buildings and not hotels or housing because we want to get the rents which are reasonable and the rental is for long tenure.

“Like the present building we are evaluating, the tenure is for 13 years. Those are the kinds of areas that we are looking for in real estate investments,” he said.

Ismee said based on the fund's investment analysis, investment in London, if it's fully funded by cash, the expected return would be at least 5.2% to 5.5% yearly, which was competitive.

“If we apply a certain percentage of gearing and take bank borrowings, the yield or rental will increase. Currently, we are going for cash basis but we may refinance the acquisition by bank borrowings later.

“This is our first acquisition so I think we will take step by step,” he said, adding that LTH was actively looking for more commercial properties in London.

Apart from London, LTH was also actively looking to invest in real estate in Mecca and Madinah as well as Jeddah, Saudi Arabia, he said.

Ismee said Saudi Arabia did not allow non-citizen to own properties in Mecca and Madinah, therefore any investments by Tabung Haji must through long-term leasing.

Tabung Haji currently earns a recurring income from its 25-year lease of the Hajar Towers Hotel in Mecca and the 10-year lease of the Movenpick Hotel in Madinah, both in Saudi Arabia.

At the moment, LTH owns several landmarks in Kuala Lumpur, which include the Tabung Haji building, TH Selborn, Tabung Haji tower in Platinum Park as well as a recently acquired, 13-storey boutique office building in Bangsar South.

By Bernama

Zecon sells mall to Tabung Haji

PETALING JAYA: Zecon Bhd announced that its unit Zecon Land Sdn Bhd, with Zecon Land's 51% owned subsidiary Zecon Petra Jaya Sdn Bhd, had entered into a sale and purchase agreement with Lembaga Tabung Haji (LTH) for the sale of a retail mall for RM155.85mil.

The retail mall, with a gross floor area of 774,859 sq ft, will be situated in Kuching, Sarawak and be developed by Zecon Land for LTH.

The development of the mall will be funded via a mix of internal generated funds and borrowings.

In a development agreement dated Jan 20, 2011, Zecon Petra Jaya had appointed Zecon Land to undertake the construction of an integrated mixed development known as the Vista Tunku Project on the project land. LTH had requested Zecon Land to construct the mall, with an anticipated completion date two years from commencement of works.

By The Star