Singapore tops in REITs after Japan

By BUSINESS TIMES

SINGAPORE: Singapore’s real estate investment trust (REIT) market has become the biggest in the Asia-Pacific region outside Japan, Trade and Industry Minister Lim Hng Kiang said yesterday. Since the first REIT listing in 2002, Singapore now has 16 listed REITs with a total market capitalisation of S$26 billion (S$1= RM2.26), he said in a speech to a property conference. In 2006, Singapore saw its first dedicated hotel REIT and Asia’s first healthcare REIT, said Lim.

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UAE Investors to build luxury homes in Malaysia

By THE DAILY STAR

Kuala Lumpur, -- SPA -- A luxury homes project will be built in Langkawi by Arab investors soon, Malaysian news agency "Bernama" reported today.

Kedah Chief Minister, Mahdzir Khalid said the project involving the construction of bungalows costing between $ 580,000 and $1.45 million each would be built by investors from the United Arab Emirates. A 60-hectare site has been chosen for the project.

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InterContinental Penang to have luxury residences

By BUSINESS TIMES

THE InterContinental Resort Penang, owned by Tradewinds Corp Bhd, may not open for at least another 15 months, as the hotel has decided to incorporate luxury residences.

The 438-room Mutiara Beach Resort Penang, to be rebranded as InterContinental, will see its inventory reduced to 220 rooms and 80 units of residences. The latter will be sold and leased back by the owners.

Following Tradewinds' decision to build luxury residences, the renovation and refurbishment exercise is expected to be more than the initial estimate of RM60 million.

Villa living in the resort, in the likes of Four Seasons Residences and at The Westin, Langkawi is becoming popular. Both hotels have decided to develop villas on the additional land and sell them.

From a hotel investors' viewpoint, the real estate play can partially pay for a hotel or resort, in addition to having bigger inventories to manage.

The hotel, located in Teluk Bahang, closed its doors for renovation on March 27 2006 and had planned to reopen 18 months later.

The closure was to enable a full-scale exercise to refurbish and modernise its premises.

"We viewed the market situation in Penang and wanted a product that is suitable and one that fits into Penang Tourism's agenda on where to target the product," director of project and technical services Tey Kok Kheong said.

"The hotel now sits on 2.23ha. We are converting one wing into residences and maintaining the rooms in the other wing," Tey told Business Times.

"The 80 units of residences will be sold and leased back and both hotel and the residences will be managed by InterContinental," he added.

The 80 units will comprise one-bedroom unit (measuring 100 sq m), two-bedroom unit (150 sq m) and three-bedroom units (200 sq m).

"We hope for the hotel to be ready by the second quarter of 2008," he said.

This 18-year old hotel is currently valued at RM217.5 million.

Tradewinds has a total of ten hotels here including the Crowne Plaza Mutiara Kuala Lumpur, Hotel Istana, Hilton Petaling Jaya and Mutiara Johor Bahru.

For the year ended December 31 2006, Tradewinds posted RM1.61 billion in revenue, up from RM1.45 billion in 2005.

Net losses narrowed to RM9.81 million from RM48.49 million in the corresponding period of 2005.

Tradewinds in its announcement to Bursa Malaysia said that the contribution from the hotel division is expected to be maintained despite the temporary closure for refurbishment on Mutiara Beach Resort Penang.

Tradewinds also has a hotel in Hanoi, Vietnam.

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Brickfields enjoys spillover effects of KL Sentral

By BUSINESS TIMES

OVER the last eight years, the profile of Brickfields has slowly developed, according to international property consultant C H Williams Talhar & Wong Sdn Bhd senior executive director P'ng Soo Theng.

"There has been hardly any land in Brickfields for further development and improvement the last several years. The image of Brickfields was built on efforts to develop the RM8 billion integrated KL Sentral transport and commercial hub located just opposite," P'ng said.

He said Brickfields will be further enhanced when the three million sq ft of commercial properties, currently under construction at KL Sentral, is completed by 2010.

About 19 million sq ft was approved by the Government for the development of KL Sentral.

So far, 4.5 million sq ft of commercial and residential projects have been completed. A further 11.5 million sq ft of land will be utilised for future developments.

P'ng told Business Times that Brickfields will enjoy the spillover effects of KL Sentral, which is expected to be completed by 2016, boosting property prices further.

In fact, prices of properties in Brickfields have been rising since the integrated commercial hub started in 1997, he added.

The price of a condominium unit at Palm Court at Jalan Berhala used to range between RM160,000 and RM170,000 in 1999 but rose to as much as RM195,000 in 2002. As of last year, the price per unit stood at RM210,000 to RM220,000.

The four-and-a-half-storey shophouse at the main road of Jalan Tun Sambanthan, facing KL Sentral, used to be worth about RM1.55 million in 1999 and RM2 million in 2003 but has increased to RM2.6 million as at end-2005.

"There has been no recorded sales of these shophouses since last year. People are holding on to their properties as they feel the prices will go higher with the amount of construction coming up at KL Sentral," P'ng said.

He said the value of properties in Brickfields could rise further if the relevant authorities "clean up" the area.

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Parkson: Bigger retail space, new outlets in store

By BUSINESS TIMES

DEPARTMENT store operator Parkson Corp Sdn Bhd will have an additional 934,000 sq ft of retail space by 2009 as it opens six stores and expands two of its existing outlets.

Parkson now has 33 outlets nationwide with a total retail area measuring 2.6 million sq ft.

Chief operating officer Toh Peng Koon said these openings are those that have been confirmed and there will in fact be more to come as it negotiates with shopping complex owners.

"There will be more. We negotiate with 90 per cent of the malls that have been planned for opening," he said. However, as all negotiations go, only a few will materialise in the end.

This Lion Group's retail arm last opening here was in October of 2005 in Alamanda, Putrajaya.

This year will see the retailer opening at Sunway Carnival, Prai; the Pavilion, Kuala Lumpur; Kota Baru Trade Centre (KBTC), Kelantan; and Spring in Kuching, Sarawak.

Parkson Pavilion's opening this September will be its largest retail outlet at 242,000 sq ft, twice the size of Parkson KLCC.

"Our outlet in Sunway Pyramid is being relocated and we will have an additional 20,000 sq ft," Toh said.

"In end-2008, we have confirmed to relocate our Miri outlet to bigger premises at the new wing of Bintang Plaza. The new area is more than twice the existing size. The new outlet will have an area measuring 146,000 sq ft," he added.

No new openings have been confirmed for 2008.

In 2009, Parkson will be the anchor tenant at KK Times Square occupying some 140,000 sq ft of space.

That year will also see Parkson make its maiden move into shopping complex management. It will manage a one million sq ft shopping complex on Jalan Genting Klang and run a 140,000 sq ft Parkson outlet there.

On the performance of the retailer this financial year ending June 30 2008, Parkson said that it expects substantial revenue growth with the additional new stores. Parkson Malaysia crossed the RM1 billion sales mark in the year ended June 30 2005.

In terms of like-for-like growth, Parkson expects to grow above the industry average for the department store category.

In the third quarter of 2006, department store category posted a growth of 5.4 per cent.

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i-City mall seen raking in RM40 rental income yearly

By BERNAMA

THE RM400 million shopping mall project in i-City, Shah Alam, is expected to rake in about RM40 million in rental income yearly for I-Berhad, chairman Datuk Lim Kim Hong said.

Lim said the mall, expected to be completed in 2010, would have one million sq ft lettable area housing three-and-a-half floors that would have two department stores, 280 shops, 10 entertainment outlets and 2,500 car park lots.

“Once completed, we expect rental income of RM40 million per annum. We anticipate the rental will increase every three years after that,” he said after the company’s annual general meeting in Kuala Lumpur today.

The yet-to-be-named retail mall forms an integral part of the first phase of i-City, the company’s first major foray into information and communication technology-enabled property development that was announced last year.

With the first phase of its 44 units of landed shops and offices expected to be completed by year-end, i-City is earmarked as a premier Multimedia Super Corridor (MSC) investment location for Selangor and is the first MSC-cybercentre in the state.

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Parkson buys Anshan Parkson stake, land for RM324m

By THE EDGE

Parkson Retail Group Ltd (PRG), which runs the Lion Group’s retail chain in China, has stepped up its presence there by acquiring the remaining stake in a store and the land in Liaoning province for 730 million renminbi (RM324 million).

Lion Diversified Bhd announced on April 24 that PRG would acquire the remaining 49% stake in Anshan Tianxing Parkson Shopping Centre Co Ltd (Anshan Parkson) from Creation International Investment & Development Ltd for 280 million renminbi. Lion Diversified owns 55.46% of PRG.

In an announcement to Bursa Malaysia, it said PRG was also acquiring the 42,574 square metres site where the Anshan Parkson is located for 450 million renminbi from Lung Shing International Investment & Development Co Ltd.

In a separate statement to the Stock Exchange of Hong Kong Ltd, PRG said: “The Anshan store is the flagship store for the company in the northeast region of China and one of the major contributors in terms of revenue and profit to the group.”

With the latest move, it said Anshan Parkson as a unit would immediately enhance the growth and profitability of the group to speed up its expansion in that region.

The latest corporate move came after PRG started legal action against its joint-venture partner Anshan Tianxing International Properties Development Co Ltd (Anshan JV partner) on April 10 to recover loans totalling 65.9 million renminbi. PRG owns 51% of the joint venture, while the remaining 49% belongs to Anshan Tianxing -- which is also the landlord of Anshan Parkson’s department store premises.

It said the beneficial owner of Creation International and Lung Shing International was Li Zhong Yong. Under the sale and purchase agreement, Li and his associates would not undertake any department store and retail business in Anshan city for two years.

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Gamuda’s second Vietnam foray

By THE STAR

HO CHI MINH: Gamuda Land Sdn Bhd expects its mixed development project here to take off in the third quarter.

Managing director Chow Chee Wah said the company had partnered a local company in the city at the start of the year.

“We are already committed at the start of the year and are looking to begin the development in the third quarter,” he told StarBiz at the sidelines of the Vietnam Economic Forum yesterday.

There was no specific investment figure for the venture in Ho Chi Minh City, he said, adding that “there is no limitation for the company”.

He said the project would include residential components and offices.

Chow said the Vietnamese market had huge growth potential, with ample opportunities in the property sector, supported by the pro-business government and environment.

It is understood that the company’s venture into Ho Chi Minh City involves the development of 20 to 30 villas, and that the local partner would bear 50% of the construction costs.

Earlier this year, Gamuda had announced its first foray into Vietnam with a US$1bil project in Hanoi, involving the development of a convention centre, office towers, hotels and luxury properties.

Gamuda will partner Vietnamese state-owned Mechanical Engineering Services LLC to develop the 327ha Yenso Park project.

On an unrelated matter, it is understood that Berjaya Group will undertake a US$700mil property project involving hotels, residential and commercial development in Ho Chi Minh City next year.

It is believed that the group will develop a financial district similar to the Phu My Hung New Urban Centre in District 7 in the city.

Currently, Berjaya Group is doing a feasibility study and construction is expected to commence next year.

Meanwhile, UEM Group international business assistant manager Nik Tasha Nik Kamaruddin said the group was active in Vietnam and would be keen to explore opportunities in Ho Chi Minh City.

She said UEM already had projects in Hanoi and a representative office under Pharmaniaga Bhd in Ho Chi Minh City.

“We are looking at all aspects of doing business as Vietnam is developing in every field. It is a matter of prioritising the business and focusing on one sector,” she added.

Earlier, the Vietnam: Modernisation and Regional Integration forum attracted more than 500 local and foreign participants.

The two-day event is being organised by The Asia News Network, Vietnam’s Planning and Investment Ministry and Vietnam News.

Malaysian companies taking part include Ireka Development Management Sdn Bhd, DIG Asia Sdn Bhd, Wah Seong Corp Bhd and Kenanga Investment Bank Bhd.

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AEON mulling REIT

By THE EDGE

AEON Co (M) Bhd is looking into setting up a real estate investment trust (REIT) for seven of its shopping centres, a move widely seen as unlocking their value.

Its chairman Datuk Abdullah Mohd Yusuf said such a move would be sensible for AEON given the size of its operations, as it owns seven of the existing 16 shopping centres operated by the group in Malaysia.

Speaking to reporters after its AGM in Kuala Lumpur on April 24, he said shareholders had raised the issue at the meeting and expressed interest in such a move.

Aseambankers Equity Research, in a recent report, had said there could be more upside to its target price should AEON progressively unlock the value of its seven shopping centres which carry a net book value of RM2.75 per AEON share.

The research house had raised its target price of AEON to RM10.50 per share while raising its valuation from 13 times to 15 times financial year 2008 (FY08) price earnings ratio. On Tuesday, the counter ended the day's trading at RM9.15.

Abdullah said the company was targeting to open up to three more stores this year to boost earnings growth.

“We are targeting to open our Sunway outlet in the third quarter of this year, Klang by year-end and Bandar Perda by year-end or early 2008.

“We are looking at opening a few more outlets in the Klang Valley, the northern region and the southern region, especially given the prospects of the Iskandar Development Region,” he said.

Abdullah said the company was also targeting to open three more D’Hati supermarket outlets this year.

He said although the company expects stiff competition in the retail consumer business, it hopes to exceed overall industry growth by at least 8%.

He expects AEON to post a revenue of over RM2 billion for the financial year ending Dec 31, 2007 compared with RM1.94 billion in FY06.

“Our current market share (in the retail consumer business) is 4% and combined with other major players, it totals only 20%. So there is more than 70% market share available,” Abdullah said.

On regional expansion, he said the company wanted to concentrate on its Malaysian operations before considering expanding into other Southeast Asian countries.

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Sarawak SEDC raises stake in Kuching Hotels

By THE STAR

KUCHING: Malinch Associate Holdings Sdn Bhd has sold its entire 43.5% stake in Kuching Hotels Sdn Bhd to Sarawak State Economic Development Corp (SSEDC).

No price tag for the transaction was disclosed.

Malinch is an indirect subsidiary of the privately-held Li & Fung (1937) Ltd.

Kuching Hotels owns and operates the 288-room Holiday Inn Kuching and the Sarawak Plaza Shopping Complex.

The agreement was signed here last Saturday between Malinch director Manit Lertsakomsiri and SSEDC chairman Datuk Talib Zulpilip.

SSEDC also owns the Crowne Plaza Riverside Hotel in Kuching

With the acquisition, SSEDC has increased its stake in Kuching Hotels to 88.7%. Kuching Hotels’ other substantial shareholder is state-owned Sarawak Timber Industry Development Corp, which has 11.3% stake.

“The acquisition of shares in Kuching Hotels is deemed strategic to SSEDC in terms of synergy and group marketing and promotion,” SSEDC said in a press statement.

SSEDC also owns the 241-room Crowne Plaze Riverside Hotel here and two beach hotels, Holiday Inn Resort Damai Beach and Holiday Inn Resort Damai Lagoon, in the Santubong Peninsula near here.

In a separate statement, SSEDC said it had entered into a long-term contract with InterContinental Hotels Group PLC (IHG) to manage Holiday Inn Kuching and Crowne Plaza Riverside Kuching.

As part of IHG’s continuous expansion in the country, a Holiday Inn hotel will be launched in Malacca in six months.

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Big plans for Hektar REIT

By THE STAR

PETALING JAYA: Hektar REIT, the first pure-play retail mall trust in Malaysia, aims to be a key long-term player in the local retail property sector.

Hektar Asset Management Sdn Bhd chief executive officer Datuk Jaafar Abdul Hamid said the prospects for retail in Malaysia were enormous.

“Even with the one million sq ft worth over RM500mil under Hektar REIT's management in Subang Parade, Selangor, and Mahkota Parade, Malacca, we don't control more than 1% of the entire retail space in Malaysia,” he told StarBiz yesterday.

Hektar Asset is the manager of Hektar REIT. It has been entrusted to identify and acquire shopping malls to be injected into the REIT.

Jaafar said the acquisition of retail properties in strategic locations, which are injected into the trust, was the fastest way for the REIT to grow. Currently, there are about 200 shopping malls nationwide.

“Our pipeline for acquisitions and development is significant and we will continue to execute our business plan quietly and surely. We plan to inject another property into the REIT by year-end,” Jaafar said.

Hektar REIT has declared a dividend of 2.4 sen per share for its first quarter ended March 31. It pledged to make four dividend payouts amounting to at least 9.6 sen per share for its financial year ending Dec 31, 2007.

Book closing is on May 9 and unitholders can expect to receive their first quarterly dividend on May 17.

Hektar REIT's gross revenue for its first quarter 2007 stood at RM23.58mil and net property income at RM14.86mil.

Net income was at RM11.24mil, which translate into earnings per unit of 3.51 sen, or 18.6% higher than the earnings forecast published in its prospectus.

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I-BHD expects RM40m in annual rent from i-City in Shah Alam

By THE STAR

KUALA LUMPUR: I-Bhd expects to rake in RM40mil in annual rental income from its proposed RM400mil shopping centre in i-City in Shah Alam.

Chairman Datuk Lim Kim Hong said the 280 shop lots and other anchor space would be for lease only.

The shopping centre that has yet to be named would have total net lettable area of a million sq ft (inclusive of the City Walk pedestrian mall).

Work is expected to begin by year-end and scheduled for completion in 2010.

Speaking after the company AGM on Tuesday, Lim said I-Bhd hoped to have a reputable foreign investor with an international brand name to help develop the shopping centre.

"Internal funding will not be a problem as my own company, Sumurwang Sdn Bhd (a major shareholder of I-Bhd), alone has the financial resources to undertake the project," he said.

Lim said the RM1.5bil i-City would provide the group with an alternative source of income through property development and management and enable it to extend its digital business by providing various services and applications into the 72-acre freehold development in Section 7, Shah Alam.

He said revenue from the sales of the landed shop offices and stratified retail suites would contribute significantly to the group's turnover and profits.

The group reported turnover of RM18mil for financial year ended Dec 31, 2006 (FY06), compared with RM63mil in the previous year.

Pre-tax profit in FY06 was RM2.8mil compared with RM7mil in FY05.

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Ong: Work to make Govt initiatives for property sector a success

By THE STAR

KUALA LUMPUR: All related parties should work together to make the initiatives announced by the Government for the property sector to work, Housing and Local Government Minister Datuk Seri Ong Ka Ting said.

Ong said this in his opening speech at the road show on improving housing delivery system at Sunway Resort Hotel here on Tuesday.

He said all related parties, including the Government, agencies, departments and developers would make a complet team to improve the housing delivery system.

"Without any of the players in the team, the housing delivery system will not be successful.

"Let us all together make this system work," he said.

Ong, who is MCA president, welcomed the suggestions to make the system more efficient.

On April 13, Prime Minister Datuk Seri Abdullah Ahmad Badawi announced the comprehensive changes for the property development sector, as part of his move to improve the public delivery system, at the Conference To Improve The Delivery System of Government Services: To Improve The Development Processes As Well As Property Management.

Among the initiatives announced were the setting up of one-stop centres in every state for housing projects for fast-track approval, replacing the Certificate of Fitness for Occupancy (CFO) with the Certificate of Completion and Compliance (CCC) and giving incentives to developers who adopt the Build-Then-Sell (BTS) concept.

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