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New Developer To take Over Abandoned Project

Extract from The Star (14/10/10)

JOHOR BARU: Buyers of a low cost housing project at Taman Baiduri here, heaved a huge sigh of relief after being told the project would be resumed after it was abandoned for eight years.

Taxi driver Sujali Ahmad, 51, said that he was grateful that the project would resume as he was in the dark over the progress of the flat that he purchased.

“Words could not describe my happiness as I almost lost my hope over the abandoned project.

“I almost wanted to buy another property as this project was abandoned, however financial difficulties have made it impossible to buy another house,” he said.


Call To Curb Loans For Third Home Buyers

Extract from The Star (14/10/10)

GEORGE TOWN: The Penang Master Builders’ and Building Materials Dealers’ Association (PMBBMDA) urges the Government to impose a cap on the margin of advance for housing loans for third home buyers.

The move was necessary to curb speculation, reduce gearing of purchasers, and maintain the sustainability of housing prices and the property market, PMBBMDA president Vincent Ong told StarBiz.

“The first and second home buyers should continue to get borrowing up to 90% of the property value to ensure that the demand for properties is sustained, creating spill-over effects for the contractors and building materials suppliers,” he said.

He also added that the federal and state governments should also implement more government projects in Penang, as there were so far only 28 projects, with a total value of RM172mil, awarded by the government sector for Penang for the period January to June 2010.


Time For Property To Bloom

Extract from The Edge (13/10/10)

Property sector
We expect Budget 2011 to support the government’s Economic Transformation Programme, aimed at propelling Malaysia into becoming a high-income nation. Higher real property gains tax (RPGT) and restrictive loan-to-value (LTV) caps will be deterrents to foreign direct investment (FDI) and high net worth individuals. While it is important to ensure a healthy property market, the risk of a property bubble in Malaysia is relatively low. Affordability remains high and the sharp price appreciation that has been seen is mainly limited to landed residential properties in prime locations. A LTV cap based on the number of properties owned, location and/or value may be difficult to implement — banks would be better off managing the risk on their own. Policy tightening in regional markets saw initial negative knee-jerk reactions, but share prices rebounded to surpass pre-policy levels (Singapore, Hong Kong) while property prices largely held up (but sales volume fell). Demand should continue to be supported by Malaysia’s positive macro factors — young population, urbanization, shrinking household size, rising income, inflation hedging, and strengthening ringgit.

We see huge re-rating potential from the transformation of Kuala Lumpur into a more livable and vibrant city. More details will likely be unveiled on the MRT, LRT extension, and government land redevelopment that could involve large private sector participation and FDIs (EPF, 1Malaysia Development Bhd, the Qatar Investment Authority and the UAE’s Mubadala Development Company have committed to date). Sure winners will be the current owners of large pieces of prime land with international development potential in Kuala Lumpur (S P Setia Bhd, Bolton Bhd and DNP Holdings Bhd). While it is trickier to guess the direct beneficiaries of government land redevelopment, GLCs and bumiputera developers have the upper hand (Malaysian Resources Corp Bhd, Boustead Holdings Bhd, Glomac Bhd, Bolton and S P Setia).

The Malaysian property sector is one of the biggest laggard sectors post-financial crisis. Regional peers have fared much better, despite higher policy risks with property prices appreciating more steeply. While the Malaysian property sector’s P/BV and P/RNAV multiples have recently inched up to 0.88 times and 0.68 times (slightly ahead of historical means of 0.77 times and 0.61 times, respectively), valuations are still a far cry from the 2-SD seen in 2004 and 2007, when re-rating was driven by strong sales momentum and positive policy changes — similar to what we are seeing now. At their peak, property stocks traded close to RNAV, while sector leader S P Setia fetched a 20% premium with foreign ownership hitting 56% (22% currently). — Hwang DBS Vickers Research


Sunrise Glows Beyond Mont’Kiara

Extract from The Edge (13/10/10)

Sunrise Bhd (Oct 12, RM2.13)
Upgrade to buy at RM2.12 with revised target price RM2.80 (from RM1.98):
The stunning sales performance of Sunrise’s recently-launched Canada project is a showcase of its ability to expand beyond Mont’Kiara. The project raises unbilled sales by 69% and makes Sunrise’s RM1.3 billion FY11 sales target more achievable. Unbilled sales could be further lifted by a RM480 million en bloc office sale, expected to be concluded by end-2010. We raise forecasts by 5% to 46% and realised net asset value (RNAV) by 0.9%. Our target price (TP) is raised to RM2.80, a 30% discount to RNAV.

Sunrise’s Quintet project in British Columbia marks a successful start to its overseas expansion. Phase 1 was fully sold within a month. Quintet has a gross development value (GDV) of RM1.2 billion at about RM1,730 psf. The size of the apartments ranges from 500 sq ft to 1,500 sq ft and the project will be developed in two phases. Given the strong sales recorded thus far, Sunrise will bring forward the launch of Quintet Phase 2. In our forecasts, we expect Quintet to contribute 4.3% to 28.1% of FY11/13 earnings before interest and tax (Ebit).

We understand that Sunrise is currently in talks with a local buyer for the en bloc sale of Menara Solaris (RM480 million initial GDV or RM818 psf; initially planned for strata office development). We are positive on these potential sales as it will reduce sales risks and enhance our forecasts by 5% to 11%.

We are upgrading Sunrise FY11/13 earnings forecasts by 5% to 46% to factor in changes in Quintet sales assumptions and profit recognition method as well as Menara Solaris GDV. Meanwhile, our estimated RNAV has been raised to RM4 per share (from RM3.97). We expect Ebit contributions from non-Mont’Kiara projects to increase from 4% (FY11) to 42% (FY13).


Budget: Expect Tighter Regulations For Credit Card & Property Sector

Extract from Bernama (13/10/10)

KUALA LUMPUR -- The Government is expected to adopt tighter regulations in the 2011 Budget to curb potential dangerous run-up in consumer credit card spending and speculative activities in the property market.

"We believe Bank Negara Malaysia (BNM) is focusing on tackling household debt in 2011 to promote healthy credit card spending," said Kenanga Research.

In its 2011 "Wish List", Kenanga said the central bank should consider imposing tighter borrowing limit for the property sector to avert potential over-leveraging on the household segment and speculations.

It said bank loans should be lowered to between 70 and 80 per cent value ratio for third mortgage, it said.


REHDA To Hold 3-Day Property Expo

Extract from Bernama (13/10/10)

KUALA LUMPUR -- The Real Estate and Housing Developers' Association (REHDA) will showcase a wide selection of properties at Malaysia's Property Exposition 2010 (MAPEX 2010) from Oct 22 to 24, 2010.

In a statement here Wednesday, REHDA said MAPEX 2010, with the theme '1Malaysia, 1Home', aimed to connect homebuyers to their dream home by providing a comfortable and convenient avenue for information seeking and exchange through interaction with 38 property developers.

Housing and Local Government Minister, Datuk Chor Chee Heung, will officiate at the launch of the expo on Oct 23.

Chairman of MAPEX committee, Datuk Ng Seing Liong, said in the spirit of 1Malaysia, REHDA wished to set up this platform to help the rakyat of all races own a home.


Conditional Green Light For Bukit Damansara Bungalow Project

Extract from Bernama (12/10/10)

KUALA LUMPUR -- The government has given a conditional green light for the hillslope luxury bungalow project in Bukit Damansara to proceed.

Secretary-general of the Federal Territories and Urban Wellbeing Ministry, Datuk Ahmad Phesal Talib, said for the project to proceed, the developer, SDB Damansara Sdn Bhd, would have to meet the engineering requirements such as observing a higher factor of safety (FOS) of not less than 1.5 for a man-made slope and 1.3 for a natural slope.

"This FOS is stated in the new guidelines for hill slope development for the Federal Territory of Kuala Lumpur (GP WPKL) 2010 which was launched on Oct 1," he said at a meeting with the Medan Damansara Residents Association (MDRA), the developer, Kuala Lumpur City Hall officials and an independent technical team, here Tuesday.

Kuala Lumpur mayor Datuk Seri Ahmad Fuad Ismail was also present.


Mah Sing Calls On Government To Maintain Tax Relief On Housing Loans

Extract from Bernama (12/10/10)

KUALA LUMPUR -- Mah Sing Group has called on the government to maintain the tax relief on interest up to RM10,00 per year incurred on housing loans.

This was initially announced for sale and purchase agreements executed between March 2009 and December 2010.

"In fact, it would be good if the tax relief is extended to all interest incurred on end financing for the first home," said Mah Sing's chief executive officer Tan Sri Leong Hoy Kum in a statement Tuesday.

In line with government's initiative to promote affordable home ownership, he said the government could also consider providing grants for first-time house owners.


PJD To Launch Projects Worth RM2b Next Year

Extract from New Straits Times (12/10/10)

PJ Development Holdings Bhd (PJD) is set to unveil three new projects worth over RM2 billion next year as it is bullish that market will perform better on pent-up demand for high-end properties.

Managing director Wong Ah Chiew said he is confident that the new projects, located in hot spots like Sri Hartamas, Cheras and Kuantan, Pahang, will do well.

This year, PJD did not launch any new projects except for sub-phases in existing developments because of uncertainties in the market.

The company has five on-going projects, lasting it for the next five years. They are Swiss-Garden Residences at Jalan Pudu, Kuala Lumpur, Taman Putri Kulai and Mont' Callista in Johor, Taman Bukit Istana in Kuantan, and Ocean View in Butterworth, Penang.


KLIFD Pact Delay May Be Due To Land Issue

Extract from New Straits Times (12/10/10)

ABU Dhabi's Mubadala Development Co's entry into an agreement with 1Malaysia Development Bhd (1MDB) yesterday to participate in developing a multi-billion-ringgit commercial project in Kuala Lumpur came some four months after the announcement on the collaboration was earlier planned.

Mubadala yesterday said it is ready to participate in building the RM26 billion Kuala Lumpur International Financial District (KLIFD), an area designed to house all players in the financial sector.

The development will take place on a 34.4ha site near Jalan Tun Razak in Kuala Lumpur, popularly known as Dataran Perdana.

The collaboration was first scheduled to be announced at an event on May 29 this year, with the attendance of General Sheikh Mohammed Zayed Al Nahyan, the Crown Prince of Abu Dhabi, and Deputy Supreme Commander of the United Arab Emirates Armed Forces.