Archive for the ‘Property News’ Category

Dijaya, Ivory Properties sign RM10b Penang JV

November 11th, 2011 No comments

KUALA LUMPUR (Nov 11): Dijaya Corporation Bhd and Ivory Properties Group Bhd have signed a joint venture (JV) agreement to develop mixed residential and commercial properties in Penang with a gross development value (GDV) of RM10 billion.

In a joint statement on Friday, the two companies said the development will be completed over the next eight years and would comprise of residential, shopping mall, hotel, office suites, office towers, retail spaces and an open mall with a boulevard. Construction of the first phase is scheduled to begin next year, they said.

The signing confirmed an earlier report on Friday by The Edge Financial Daily after Dijaya and Ivory Properties had both asked for a one-day suspension in trading for their shares pending a material announcement.

Dijaya and Ivory said the land was located within Bayan Mutiara, a new development hub located in the eastern part of the Tun Dr Lim Chong Eu Expressway (formerly known as Bayan Lepas Expressway) and in the vicinity of Sungai Nibong. It spans 102.65 acres, of which 76.56 acres are existing land and the remaining 35 acres are to be reclaimed, they said.

Dijaya group chief executive officer Tan Sri Danny Tan said the signing was another milestone for Dijaya’s investment outside of Klang Valley in addition to the Southern region. “Our investment in Penang is an affirmation of the company’s confidence in the growth potential of this region and, with Ivory as our business partner, we hope to further contribute to the economic growth in Penang,” he said.

Meanwhile, Ivory chief executive officer and chairman Datuk Low Eng Hock said Dijaya was famous for its series of lifestyle homes within a resort environment as seen in the award-winning development Tropicana Golf & Country Resort. “With the property company beefing up its financial muscles and market presence, this potential joint venture will add vibrancy and spur the economic growth of Penang,” he said.

Ivory had received a letter of acceptance from the Penang Development Corporation (PDC) on July 25, to purchase and develop 102.56 acres of mixed development land in Bayan Mutiara, Penang for a purchase price of RM1.07 billion.

Under the JV, the two public listed companies have formed Tropicana Ivory Sdn Bhd, with Ivory Properties holding a 51% stake and Dijaya holding the remaining 49%.


SOURCE: The Edge Property

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Build more LMC units on island

November 10th, 2011 5 comments

GEORGE TOWN: The state government should consider building low medium-cost (LMC) units on the island instead of pushing such projects to the mainland.

State Gerakan Housing bureau chairman Quah Kooi Heong said that to date, Chief Minister Lim Guan Eng had only announced one notable LMC project, which is the one located on the mainland in Batu Kawan.

“Lim has failed to realise that there is demand for LMCs on the island,” Quah said.

He said that on Aug 1, Lim denied accusations through the media that the state government had never launched any affordable housing projects.

Lim then revealed that a total of 11,596 low-cost and LMC units had been approved since 2008.

Quah however said: “Of the 11,596 units, he said that 8,175 units were built by private developers while the government and related agencies constructed 3,421 units.

“However, he did not mention that the 3,421 units were in fact inherited from the previous Barisan Nasional government.”

“The state government through PDC should build more LMCs while the state or the Penang Municipal Council should not resort to making quick profits by selling state or council land to private developers.”

Quah claimed that the state government had transferred its social obligations to build LMCs on the island to a private developer, who is overseeing the Bayan Mutiara integrated development project.

“This move does not help resolve the shortage of LMC units on the island. It will in fact increase the cost of LMCs in Penang and defeat the objective of the state to provide affordable housing for the poor,” Quah told a press conference at the state Gerakan headquarters yesterday.

Quah pointed out that in the latest Auditor-General’s Report, not a single LMC was built by the state government between 2008 and 2010.

Source: The Star

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Demand for luxury residential properties expected to turn cautious

November 7th, 2011 No comments


PETALING JAYA: Demand for luxury residential properties is expected to turn cautious, given greater economic uncertainties and a tightening of credit by banks, DTZ Research said in its latest Property Times market report.

In the report for Kuala Lumpur for the third quarter, the research house said there would be an increasing downside risk on prices at the higher end of the market if the conditions got worse next year.

“The residential sector experienced significant completions in the quarter and this will put pressure on rentals, especially in the larger prime condominium units where demand has not kept pace.

“Generally, while price remains stable, new pressure to sell is expected as some owners taking delivery of completed units may wish to exit their investments. There remained selective demand for new launches,” it added.

The quarter saw the completion of a significant number of projects with an additional 2,278 condominium units in Kuala Lumpur, including two city-centre projects: Brunsfield Embassyview and The Pearl, eight projects in Mon’t Kiara, and one in Bangsar.

A further 52 condominium units are expected to be completed by the end of the year, all of which are in the city centre.

In 2012, about 5,384 units are expected to enter the market with about 92% or 4,952 units located in the city centre.

A boutique luxury condominium project in Persiaran Raja Chulan, St John Woods Residence, has reportedly received strong response, with almost half of the 48 units booked within two days. The selling price of the units are between RM3.3mil and RM4.4mil each (or RM900 per sq ft).

According to Property Times, the average capital value of high-end condominiums in Kuala Lumpur is generally stable at RM626 per sq ft, with properties in the Kuala Lumpur city centre averaging RM902 per sq ft.

“The market may see short-term selling pressure as owners of newly delivered units may exit their investment,” it pointed out.

The average rental value of high-end condominiums in Kuala Lumpur is stable at RM3.50 per sq ft per month but new completions will keep the rate competitive, especially for larger units where demand has not kept pace with supply.

It noted that to maintain or increase pricing level, developers had resorted to smaller units marketed under the guise of small-office home-office in mixed developments to appeal to younger buyers seeking more lifestyle options and to investors.

The outlook for the office sector is likely to be more sombre in the light of substantial pipeline supply in 2012.

Three office buildings are expected to be ready by the fourth quarter this year, which will add 1.1 million sq ft to the year’s total supply of about 2.5 million sq ft. They are D’tiara Amanaraya Corp Tower, Crest Tower and Lot E @ KL Sentral, of which the first and third properties will be substantially owner-occupied.

The report pointed out that external headwinds were expected to create uncertainties and the overall net absorption rate could further slow in the fourth quarter, adding that the situation would not provide comfort to a market that was expecting 2012 to be a potential tipping point with some 7.4 million sq ft projected for completion in the office market.

During the third quarter this year, leasing activities were driven mainly by the oil and gas, information technology (IT) and financial sectors.

With no new completions adding to competitive pressure, office rents remained stable with prime gross rental rates at RM6.22 per sq ft a month.

Among the major leases and relocations were that of RHB Insurance at The Icon for 100,000 sq ft and Touch n Go taking up 67,000 sq ft at The Horizon, Block 6, Bangsar South.

The third quarter saw no change in the capital value of office buildings, with good quality suburban offices sold at RM600 to RM700 per sq ft. The average capital value of prime office in Kuala Lumpur stood at RM807 per sq ft.

The investment property market saw an increase in both value and activities, with total value topping RM1.3bil in the third quarter, an increase of 39% from the second quarter.

There were 10 deals in the quarter – five offices, two mixed developments, and a retail, industrial and residential property each – compared with eight in the second quarter.

The biggest deal recorded in the third quarter was the sale via public auction of The Putra Place, which was sold to Sunway REIT for RM513.9mil.

The other major transaction was a prime office building in Cyberjaya – Bangunan Lestari Kumpulan Emkay – that was on a long-term lease to Shell, with an estimated initial yield of 5.7%.

Most of the properties sold are located in and around Kuala Lumpur, with one transaction recorded in Penang, a Tesco-leased hypermarket in Tanjung Sri Pinang, and in Johor Baru where a major prime stratified office, Menara Landmark, was sold via a public auction to developer Daiman Bhd.

The investment market was more active with strong deal flows from investors and also supported by end-users buying for own occupation. But going forward, the market is expected to be dominated by local investors as foreign investors have become more cautious.

In terms of pricing, Menara Landmark was sold at RM164 per sq ft, which the report noted was significantly below the RM600 to RM700 per sq ft fetched by good quality suburban offices in Kuala Lumpur.

Three of the transactions during the quarter involved mid-sized offices purchased for owner-occupation. The buyers are from the IT, oil and gas, and infrastructure sectors which are key sectors under the Economic Transformation Programme.

As for the retail sector, Property Times said rental growth was likely to be moderate going forward, especially with new malls still sprouting up in the suburbs in an increasingly tougher operating environment.

About 860,000 sq ft of new space was added in the quarter in Kuala Lumpur with the completion of three major retail centres – Suria KLCC (extension), Solaris 2 and 1 Shamelin Shopping Mall. The total stock reached 45.8 million sq ft in the Klang Valley.

It said the overall outlook for the retail sector was expected to remain optimistic due to a stronger ringgit, with total retail sales projected to grow from RM182.44bil in 2011 to RM279.83bil by 2015.

The average occupancy rate at retail centres registered a slight increase to 91% in Kuala Lumpur and 88% outside the capital. However, newly completed retail centres have experienced slow leasing rate, given the increasing market saturation of retail facilities even in good suburban locations.

Meanwhile, growth in online shopping poses a challenge to the domestic retail industry which is facing higher costs of goods and operations.

In 2010, there were about 1.1 million online shoppers with an average RM2,500 spending per head. According to a research by AC Nielson, the online purchasing market had reached RM1.8bil in 2010 and is expected to increase to RM5bil in 2014.

“This rising trend is a challenge to local merchants who will have to adopt multi-channel retail strategy to capture the rising online market,” Property Times added.

SOURCE: The Star

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Concession rights now worth RM5bil, says Chow

November 7th, 2011 No comments

GEORGE TOWN: The concession rights obtained by the developer of the RM300mil Tun Dr Lim Chong Eu Expressway are now worth RM5bil, said Penang Local Government and Traffic Management Committee chairman Chow Kon Yeow.

“Former Chief Minister Tan Sri Dr Koh Tsu Koon’s outburst had not been able to dispel that fact as industry players had estimated the gross development value was over RM5bil because The Light project area was worth RM500 to RM600 per sq ft.

“Dr Koh had given the developer concession rights, including rights to reclaim land, cash payment for land acquisition and squatters relocation, and waiver to development charges, that are now worth RM5bil or more,” he said in a press statement yesterday.

In yesterday’s report, Dr Koh, also Gerakan president, had lashed out at Chow over claims that the previous Barisan Nasional administration had a “scandalous” agreement with a developer over the expressway.

“Chow’s allegations that the developer of the expressway could get up to RM5bil in development value was misleading and ridiculous.

“The development value of the project should be taken at the 1997 price, not the current price,” he had said.

Koh had estimated the development value for the expressway, previously known as the Jelutong Expressway, at 1997 to be RM656.5mil.

Chow said the state secretariat only used the “old” rate of RM90 for freehold and RM74 for leasehold to calculate the value of the reclaimed land as if they had used the current value, it would have added a few billion ringgit.

Dr Koh’s argument, he added, that the state should not use the current value to evaluate the 1997 concession agreement showed that he (Dr Koh) had ignored the importance of development value on the reclaimed land as a major source of revenue for the developer.

“To date, the developer had only spent RM242mil on the yet-to-be completed expressway but had already enjoyed the profits from the multi-billion ringgit property development.

“Our records also showed that the previous administration had given an advance of RM33.18mil to help the developer pay for land acquisition and squatter compensation. This proves that the Gerakan’s assertion that they never paid money to the developer was false,” he said.

SOURCE: The Star

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SDB in Penang debut with By The Sea

November 5th, 2011 No comments

Selangor Dredging Bhd (SDB) will be making its debut on Penang shores, literally, with a breezy project known as By The Sea.

The foray into the island’s famed Batu Ferringhi beach comes just several months after the launch of its fourth project in Singapore.

The Kuala Lumpur-based developer has completed several projects in the Klang Valley.

“I believe I could do something different with this piece of land in Penang,” says SDB managing director Teh Lip Kim.

The move by the property developer is seen as a strategy to extend its branding into cities favoured by the expatriate community and Asia’s well-heeled, says the Real Estate and Housing Developers’ Association Malaysia (Rehda) Penang chief Datuk Jerry Chan.

According to a survey by ECA International on 254 cities, George Town, the capital of Penang, is the eighth most liveable city in Asia, while Singapore is Asia’s most liveable city.

The project comprises 138 units of serviced suites spread over three blocks of between five and 11 storeys. There will also be a low-rise commercial block to provide basic amenities to the residents and the public. The site of the development is located between Bank Negara’s holiday complex and a community mosque.

The two hotels closest to it are the Hard Rock Hotel and Park Royal, both of which are just less than five minutes’ walk away in opposite directions.

Teh’s confidence in providing something different stems from the fact there will be two major focal points in the development that sits on 4.7 acres.

The first focal point of the RM230mil development is the beach which it will share with some of the island’s most popular five-star and boutique hotels – Shangri-La’s Rasa Sayang Spa and Resort, Golden Sands Resort, Hard Rock Hotel and the newly-refurbished Lone Pine.

Her second focal point is Sungai Satu, or One River, which flows through the land. The development will use the river as a border to separate the suites from the amenities block. The river, which flows past a cluster of squatters, will be cleaned and rehabilitated by the time it flows into By The Sea.

“The rubbish will be cleared and the water clarity improved considerably by the time it flows past the project and enters the sea,” she says. The river banks will be landscaped to add to the serenity and ambience of By The Sea.

Because beaches are public areas, the project will be set 60 m inland in order to create a park and a recreation area for residents.

“There will be value in the open space,” Teh says.

Priced at an average of RM1,200 per sq ft, By The Sea will be setting new benchmark in a predominantly tourist-centred area dotted by hotels. It is expected to be completed in the first quarter of 2016.

At that price and in today’s uncertain economic climate, Teh says she is targeting the Penang diaspora who would like to return to the island. The company is known for setting new benchmarks. In Puchong, the gated and guarded development AmanSari has set new standards in what was then a fairly ordinary township, while Ameera and Five Stones adds a new dimension to high-rise living in SS2, Petaling Jaya, an established township with predominantly landed terraces.

Teh’s main forte is landscaped housing, and this normally comes with a premium. She will use the same formula in the Penang property.

While SDB’s lifestyle concept developments may be new to the local Penang population, buyers in the Klang Valley and Singapore are familiar to its style and concept.

In Singapore, the company recently launched Hijauan on Cavenagh in District 9, one of the city state’s most prestigious areas and just minutes away from Orchard Road. The six-storey residential block sits on a half-acre plot and will have a total of 41 apartments with units ranging between 463 sq ft and 1,884 sq ft.

The units are priced between S$1.3mil and S$3.5mil each.

It will be built on the former Cavenagh Mansion land. Hijauan is expected to be completed in the third quarter of 2015.

Cavenagh Road was named in honour of Maj-Gen William Orfeur Cavenagh, the last India-appointed governor of the Straits Settlements who governed from 1859 to 1867. Hijauan will have a combination of garden units, penthouse and typical units but all will enjoy the greenery in a coveted green lung within walking distance from Orchard Road and a tree-lined passageway besides the Istana and adjacent to 25,000 sq ft of lush state land.

The Istana is the official residence and working office for both the President and Prime Minister of Singapore and is also the place where they receive and entertain state guests.

A link bridge will connect Hijauan to Orchard’s Centrepoint shopping mall. Twelve of the 41 units have been sold.

Besides Hijauan, SDB’s other project in the city state includes Jia, OKIO and Gilstead Two. The company recently bought two acres in Singapore’s Pasir Panjang near the National University of Singapore.

With today’s concerns about eurozone, Teh says Singapore, like Britain, is seen as a safe haven for property investment, particularly if they are located in London’s zone 1 and zone 2.

“Similarly, I see the same in Singapore. For me, (whether it is Singapore, Klang Valley or Penang), I want to do something different,” says Teh.

Next year, Teh says SDB will launch a development in Cheras that will set tongues a wagging.

For now, her focus will be By The Sea and Singapore’s Hijauan.

SOURCE: The Star

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