Thinkproperty Blog

GEORGE TOWN: IJM Land Bhd’s latest addition to the RM5.5 billion The Light Waterfront project — The Light Collection 1 — with a gross development value of RM203 million has seen a 50% take-up rate even before its official launch this weekend.

The Light Collection 1 is the third chapter of the larger development, after the launch of the Light Linear and Light Point in 2009. It will also be the first to feature the water villa series of the project which is being developed in three phases on 152 acres (61.5 hectares) over the next 15 years.

IJM Land’s managing director Datuk Soam Heng Choon expressed confidence that the rest of the units would be taken up within the next eight months. The project boasts of being the only one of its kind in Southeast Asia with coral reef waterways weaving around and interconnecting the cluster of buildings.

Soam said the waterways were an impressive feat of high-tech engineering, extensive marine research and expertise which set the project apart from other projects in the country.

KUALA LUMPUR: Milux Corp Bhd’s wholly owned subsidiary, TH Hin Sdn Bhd, entered into a sale and purchase agreement (SPA) with Albert Wines &  Spirits (M) Sdn Bhd yesterday to dispose of a piece of vacant land in Kota Damansara, Petaling Jaya, for RM10.98 million.

In a Bursa Securities filing, the group said the piece of vacant industrial land measuring about 10,627 sq meters had a lease tenure of 60 years expiring on Feb 15, 2062.

Milux said the property was acquired by TH Hin on July 28, 2009 and that the original cost of investment was RM5.5 million. It said the property was only accounted for in TH Hin’s books in the month of June 2010 as the acquisition was only completed on May 24, 2010.

The group said the net book value of the property was RM5.491 million as at June 30, 2010 and that proposed disposal was expected to be completed within three months.

Extract from The Edge (27/07/10) KUALA LUMPUR: The Edge Financial Daily yesterday wrote on the weak price performance of the two newly listed REITs, Sunway Real Estate Investment Trust (SunREIT) and CapitaMalls Malaysia Trust (CMMT). It highlighted the fact that while capital gains for REITs may not be strong, the total returns for shareholders is very decent after adding back dividends or distribution per unit. All Malaysian REITs, even those now trading below IPO prices, have given positive total return to shareholders. While high yields are likely to keep REIT investors contented, the key to capital growth in REITs is in raising overall yields and asset value, usually through yield-accretive acquisitions. The lack of such yield-accretive acquisitions, or value enhancement propositions, is one of the key factors behind the lackluster price performance of many REITs. It is not surprisingly REITs are often viewed as one-off exercises to realize the value of a developer’s assets.

KUALA LUMPUR: En route to a listing on the Main Market of Bursa Malaysia Securities soon, Tambun Indah Land Bhd (TILB) plans to undertake 12 property development projects in Penang with an estimated gross development value (GDV) of RM1.05 billion.

According to its prospectus exposure on the Securities Commission’s website, Tambun Indah Land said the 12 projects to be undertaken between June 2010 and 2016 involved an estimated 2,532 units of bungalows, semi-detached houses, terrace houses, condominiums, apartments and shop-offices.

The Penang-based developer’s ongoing projects as at May 15, 2010 include Juru Heights (GDV: RM75.53 million), Seri Palma (RM4.6 million), Carrisa Park (RM25.93 million), Pearl Garden  Phase A1A (RM54.92 million) and Pearl Garden Phase A1B (RM39.9 million).

Tambun Indah Land’s proforma income statements for the year ended Dec 31, 2009 (FY09) showed the group’s net profit rising marginally to RM23.76 million from RM23.47 million in FY08 while revenue dipped 20% to RM100.87 million from RM126.04 million. Basic earnings per share (EPS) rose to 12.63 sen from 12.44 sen.

Extract from The Edge (26/07/10) PETALING JAYA: The owners of six homes in the Klang Valley have emerged winners in the haven/The Edge My Dream Home Awards 2010. There were two Gold Award winners in the detached/semi-detached category this year — Francis Lee and Yap Poh Lean for their home in Shah Alam; and Mr and Mrs Anthony Leong for their house in Section 7, Petaling Jaya. The Leongs’ house also bagged the My Green Home Award 2010, a new category introduced this year in recognition of efforts by homeowners to go green. The 1960s architecture and original fittings of the house were maintained and given a new lease of life with the help of architect Dr Tan Loke Mun. “What is heartening is the overall quality of the entries received. More and more of the designs mirror a deliberate attempt on the part of homeowners, architects and designers alike to go green,” said Dorothy Teoh, editor-in-chief of The Edge at the awards presentation ceremony last Saturday. “In recognition of this, we have introduced a green category in this year’s awards,” Teoh said. “We have always wanted to keep the old charm of the house as old houses are usually built with passion, so we wanted to keep that,” said Mrs Leong, the proud owner of the Section 7 house.

(From right): Au, Teoh with joint Gold winner in the detached/semi-detached category Mrs Anthony Leong, her son Edward and Dr Tan, architect of the Leongs’ home in Section 7, PJ which also received the My Green Home award. Photo by Lee Lay Kin

KUALA LUMPUR: Atrium Real Estate Investment Trust’s (REIT) net profit for the second quarter ended June 30, 2010, rose 152% to RM2.56 million from RM1.01 million a year earlier.

In a Bursa filing yesterday, the REIT said revenue increased 17.5% to RM3.55 million from RM3.02 million while basic earnings per share grew to 2.1 sen from 0.83 sen.

Compared to the preceding quarter, the REIT’s net profit had decreased slightly from RM2.62 million due to an increase in expenses. 

“The increase in expenses is due to an increase in finance costs, which was due to higher interest rate charged by financial institutions as a result of Bank Negara Malaysia increasing the benchmark overnight policy rate by a total of 75 basis points to date since March 2010,” it said.

KUALA LUMPUR: 1 Mont’Kiara (1MK), a mall and office development in Mont’Kiara is believed to have been sold for RM333 million, in what is likely to set a new benchmark pricing for the Mont’Kiara area.

1MK, which is 50:50 owned by Singapore-based CapitaLand and London-listed Aseana Properties Ltd, is being developed by Ireka Development Management Sdn Bhd, a wholly-owned subsidiary of Ireka Corp Bhd. Ireka also owns slightly over 20% of Aseana Properties.

The buyer is believed to be a real estate fund management company affiliated with Hong Kong’s Cheung Kong Group, which is controlled by property tycoon and the world’s 14th richest man Li Ka-shing. The Edge Financial Daily first broke the story on June 11, with the speculated the sale price of RM300 million.

The mall has a net lettable area of 250,000 sq ft and the office at 180,000 sq ft. The sales value of the net lettable space works out to an average of RM774.42 psf, although the retail component will be valued higher than the office space.

Maintain hold at RM3.36 with target price of RM3.50: The Edge Financial Daily has reported that Gamuda’s wholly owned property development arm, Gamuda Land, has acquired a plot of freehold land in Jalan Pudu for a mixed commercial development with an estimated gross development value (GDV) of RM600 million. A sale and purchase agreement was entered into last month for the acquisition of the 2.94-acre parcel of commercial land located at the intersection of Jalan Pudu and Jalan Robertson for RM105 million or RM820 per sq ft from Wearne Brothers Properties Pte Ltd.

Known for their development of sprawling suburban townships, the project is Gamuda’s first mixed commercial development in Malaysia. The plot of land is located in the heart of Kuala Lumpur within walking distance of the bustling Bukit Bintang area and the Plaza Rakyat LRT station. The development is expected to take three years, with the initial launch tentatively scheduled for early FY2012. Assuming a pre-tax margin of 20% and a sales period corresponding to the development period, the project should contribute about RM90 million in after-tax earnings over the development period. We expect our earnings estimate for FY2012 to be boosted by just 0.5% as the project will still be in the start-up stage. Therefore, we leave earnings estimates unchanged for now.

We maintain our hold call as we believe Gamuda is fairly valued at current valuations. Our target price is unchanged at RM3.50 based on FY2011 EPS pegged to a historical average PER of 20 times.

Extract from The Edge (16/07/10)

KUALA LUMPUR: Gamuda Land Sdn Bhd is acquiring a freehold plot in Jalan Pudu for RM105 million for a mixed commercial development with an estimated gross development value (GDV) of RM600 million.

Its managing director Chow Chee Wah told theedgeproperty.com that Gamuda Land had last month entered into a sale and purchase agreement to acquire the 2.94-acre (1.18 hectare) parcel of commercial freehold land, located at the intersection of Jalan Pudu and Jalan Robertson, for RM820 psf from Wearne Brothers Properties Pte Ltd.

“The biggest advantage of the development is that it is near the LRT (Plaza Rakyat station) and Puduraya bus terminal. The project is also within walking distance to the Bukit Bintang shopping area,” said Chow.

He said plans for the site included shop offices and serviced apartments.

KUALA LUMPUR: Bandar Raya Development Bhd is teaming up with MULTI-PURPOSE HOLDINGS BHD (MPHB) to develop several parcels of land owned by MPHB in Penang and Selangor.

BDRB said on Tuesday, July 13 it had inked the MoUs with MPHB to work together and develop several parcels of land in Penang measuring about 80 acres, Rawang (266.7 acres) and Gombak (324 acres) which are owned by MPHB.

BRDB has six months from the date of the MoUs or such longer period as the parties shall mutually agree upon to conduct a feasibility study on all the proposed projects.

"The signing of the MOUs is in line with the BRDB group’s business strategy of enlarging its development land banks via joint venture to improve profitability and shareholder value," it said.

KUALA LUMPUR: Mid-cap property developer PJI Holdings Bhd topped the stock market’s most active list with 37.8 million shares traded at the market close yesterday.

Yesterday’s trading volume in the stock was a 311.31% spike from Tuesday’s volume.

PJI’s share price ended the day two sen or 19.04% higher at 12.5 sen. Together with Monday’s one sen or 10.53% jump in share price, the counter has had an almost 30% price gain over two trading days.

The surge in both volume and price of PJI shares follows the announcement by the company on Monday that it has entered into sale and purchase agreements to dispose of Wisma PJI to one Pan Pacific Enterprise Sdn Bhd for RM8.8 million cash.

KUALA LUMPUR: MTD ACPI Engineering Bhd yesterday announced that it has entered into a sales and purchase agreement (SPA) with Campio Builders Sdn Bhd to dispose of a piece of land in Sepang, Selangor, for RM8.23 million cash.

The freehold land measuring 1.39ha is zoned for commercial development. Valued at RM6.9 million, the land is presently charged to EON Bank Bhd, MTD ACPI said in an announcement to Bursa Malaysia.

The company had purchased the parcel of land for RM6.9 million in 2002, which represents a net gain of some RM1.33 million for the company. MTD ACPI added that it would be using proceeds from the sale to pay bank borrowings and for working capital.

KUALA LUMPUR: PJI Holdings Bhd is selling two adjoining three-storey semi-detached factories, known as Wisma PJI, in Bukit Jelutong, Shah Alam, to Pan Pacific Enterprise Sdn Bhd (PPESB) for RM8.8 million cash.

The property developer has been going through extensive fund-raising of late, and this latest sale brings the total gain from disposals or capital restructuring since March to RM73 million.

PJI announced yesterday that it had entered into agreements on June 30, to dispose of the factories and would lease the buildings, which house the group’s corporate office, from PPESB for a period of two years. PPESB group comprises hardware dealers and general merchants and is also in investment holding.

The three-storey office buildings, factory annexes and guardhouses have a total gross floor area of 3,764 sq meters and the land covers a total of 3,790 sq meters. The properties are currently charged to Kenanga Investment Bank Bhd for facilities extended to it.

Maintain trading buy at RM1.56 with a fair value of RM2.10: MRCB is buying out its partner in 348 Sentral, an office & service apartment development with a total gross development value of RM850 million in KL Sentral. It is paying RM105 million for a 60% stake in the project held by Gapurna (linked to businessman Datuk Mohamad Salim Fateh Din), thereby boosting its stake in the project to 100%.

At this price tag, 348 Sentral in its entirety is valued at RM175 million. This is a 60% premium to the valuation of the entire project of RM109.5 million when MRCB first bought a 40% stake, also from Gapurna, for RM43.8 million in December 2007. We believe the higher valuation is justified as: (1) the land value should have appreciated over the last two to three years; (2) the project is now 15% completed, via-a-vis just bare land when MRCB bought the initial 40% stake; and most importantly (3) Shell has been roped in as tenant for 60% of the office space for 15 years. Ceteris paribus, the acquisition will increase MRCB’s net debt and gearing of RM430 million and 0.36 times as at March 31, 2010, to RM535 million and 0.43 times, which is still manageable.

Forecasts are maintained as rental income (the project will be held as an investment property) will only come in beyond our forecast period. Completion is expected by 4Q2012. Risks include: (1) new construction contracts secured in FY12/10 coming in below our target of RM500 million per year; and (2) rising input costs.

We maintain a trading buy. We are upbeat on the construction sector as we expect construction stocks to generally outperform the market over the short term, buoyed by news flow, particularly from the RM36 billion KL mass rapid transit (MRT) project and the RM7 billion Ampang and Kelana Jaya light rail transit (LRT) line extension project. For MRCB, additional kickers could come from the possibility of it bagging prime federal government land parcels in KL and Sungai Buloh. We estimate that the land parcels could enhance its valuation by RM1.2 billion or 86 sen per share. Indicative fair value is RM2.10 based on a sum-of-parts valuation.

KUALA LUMPUR: Diversified Sanbumi Holdings Bhd is selling six contiguous parcels of freehold land with a combined area of some four hectares (10 acres) in Seberang Prai to Mydin Wholesale Cash and Carry Sdn Bhd for RM24.28 million.

Proceeds from the sale would be used to finance the expansion of Sanbumi’s hospitality business, Sanbumi told the stock exchange yesterday.

“The company intends to utilize the proceeds from the disposal for working capital purpose,” Sanbumi said, adding that it would incur a loss of RM1.06 million from land sale.

KUALA LUMPUR: PUTRAJAYA PERDANA BHD has secured a RM321.5 million contract to construct a commercial, retail and hotel building along Jalan Tun Razak here.

The company said on Friday, July 2 it had accepted the contract from The Intermark Sdn Bhd to undertake the CONSTRUCTION of the new Intermark retail podium and tower.

"The contract period for the project is 23 months, that is to commence on July 14, 2010 and to complete by June 15, 2012," it said.

Putrajaya Perdana said the project was expected to contribute positively to the earnings and net assets of the group for the financial years ending Dec 31, 2010 to 2012.

SHANGHAI: A new home pricing benchmark has been set in the exclusive Kuala Lumpur enclave of Mont’Kiara — the fourth and final block of Bukit Kiara Properties’ Verve Suites is being snapped up at up to RM1,580 psf.

Within two weeks of a preview on June 4, the 250-unit block called Vox Tower has netted close to 70% sales, a strong market response flooring even the pleasantly surprised developer. Sales have since climbed further to 76%.

“This overwhelming response has caught us all by surprise,” said Bukit Kiara Properties (BKP) group managing director N K Tong at the signing of a memorandum of agreement with BSH Home Appliances at Hamburg House at EXPO 2010 here on Tuesday.

Vox Tower units are pegged at an average of RM1,250 psf. Themed after what the developer has dubbed as the Versilica living concept, the units come in sizes of 462 sq ft (one-bedroom suite), 926 sq ft (two bedrooms) and 1,395 sq ft (three bedrooms). In all, Verve Suites comprises four towers with units totaling 933.

THE impending high profile initial pubic offering (IPO) for Sunway Real Estate Investment Trust (REIT) on the Main Board of the Bursa Malaysia has certainly raised investor awareness on this particular class of investment securities.

Sunway REIT will make its debut on July 8. Hot on its heels, yet another REIT, the CapitaMalls Malaysia Trust is slated for listing on July 16.

Although REITs have been around for some time — Axis REIT was the first REIT to be listed in Malaysia back in August 2005 — investor interest has been largely subdued with relatively thin trading volumes observed for most of the 12 REITs currently listed on the local bourse.

However, we could see increased interest going forward. For starters, the listing of Sunway REIT has helped raise the profile for this entire asset class. It will be the largest REIT on Bursa Malaysia with assets valued at almost RM3.73 billion and a market capitalization of roughly RM2.7 billion (assuming the indicative unit price of RM0.97). Elsewhere, CapitaMalls will list with assets totaling RM2.19 billion and a market capitalization of about RM1.46 billion (assuming a price of RM1.08). By comparison, Starhill REIT, currently the largest listed, has assets of about RM1.64 billion and market capitalization of little over RM1 billion.