Archive for the ‘Property News’ Category

SP Setia targets RM4bil in property sales

December 8th, 2011 No comments

SHAH ALAM: SP Setia Bhd posted a 30% year-on-year jump in net profit to RM327.97mil for its financial year ended Oct 31, 2011 (FY11). The property developer attributed this mainly to higher selling prices for new launches and the stabilisation in the prices of construction materials. Revenue also increased 27.9% to RM2.23bil.

The group also set a new full-year sales record in FY11 of RM3.29bil, a 42% increase from the previous record of RM2.31bil set in FY10.

It was the fourth consecutive year of increase in the group’s sales and represented the second consecutive year that total group sales had exceeded the RM2bil mark, said SP Setia in a Bursa Malaysia filing.

(The sales figures are based on the retail pricing of properties sold, while revenue is recognised in the accounts when the developer is paid at the point of purchase and also when construction is completed in stages.)

SP Setia has proposed a final dividend of 9 sen per share. Together with the interim dividend of 5 sen per share, total dividend for the year works out to be 14 sen per share, representing a payout of about 59% of the group’s net profit.

The group’s profit and revenue were largely derived from property developments in the Klang Valley, Johor Baru and Penang.

Ongoing projects which contributed included Setia Alam and Setia Eco-Park at Shah Alam (Selangor), Setia Walk at Pusat Bandar Puchong (Selangor), Setia Sky Residences at Jalan Tun Razak (Kuala Lumpur), Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Baru and Setia Pearl Island and Setia Vista in Penang.

President and chief executive officer Tan Sri Liew Kee Sin said the group was aiming to achieve total new sales of RM4bil in FY12.

“This is despite factors such as the external headwinds from the economic uncertainty in Europe, and Bank Negara’s guidelines seeking to further encourage prudence in bank lending,” he told reporters.

About 90% of new sales in FY12 would come from Malaysia, with the balance from foreign markets.

Liew stated that the group had strong branding, and offered an extensive range of products that cater to diverse market needs.

The group’s recent launch of its integrated green commercial and mixed residential development, KL EcoCity (Kuala Lumpur), is expected to contribute strongly to sales in FY12.

Other recent launches like Fulton Lane and EcoXuan, the group’s maiden project in Melbourne and second project in Vietnam respectively, are expected to also help augment sales in FY12.

Meanwhile, Liew said he was not too concerned about the recent 10% increase in stamp duty for foreigners buying homes in Singapore.

“We target 70% of our product range in Singapore to cater to local upgraders. Foreign buyers will be about 30%, so we do not think there will be much of an impact,” he said.

Liew also said SP Setia was interested in making another bid to secure the project to redevelop London’s Battersea Power Station. SP Setia had submitted a 262mil (RM1.3bil) offer for the project in November that was turned down, before recently making a a second bid of 324mil (RM1.6bil) that was also rejected.

Source : The Star

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Why not borrow the RM8b?

December 8th, 2011 2 comments

title= Billed as the current government's biggest infrastructure exercise since it assumed office in March 2008, the projects have been tagged at RM8 billion and reportedly conducted via open tender.

Chief Minister Lim Guan Eng had said the projects would comprise a third (tunnel) link connecting Gurney Drive on the island to Seberang Perai on the mainland, a by-pass connecting Gurney Drive to the Tun Dr Lim Chong Eu expressway, a link between Bandar Baru Air Itam to the same expressway, as well as a paired road to the existing coastal road from Tanjung Bungah to Teluk Bahang.

Lim had also said that the state government will not provide any payments for the projects, and that the costs incurred will be recovered, via "competitive land swap" deals with prospective companies.

He was quoted as saying that the proposed land swap would involve the best prime land in Penang, which is in the Gurney Drive vicinity and that the price of land in Penang would increase in the next few years, and thereby benefit the companies that undertake the road and tunnel building projects.

Although it was reported that a prequalification exercise briefing for prospective companies would be held in Penang on November 29, the media does not appear to have been updated on how the briefing went, nor the interest shown by any potential firms.

Yesterday, the Penang state secretariat placed advertisements in selected print and electronic media, that a second briefing for pre-qualification exercise is to be held on January 14 next year.

The advertisement states that companies that had attended the first briefing on November 29, need not attend the second briefing.

The issue of the proposed land swap and the fact that Lim and his senior state executive councillor Lim Hock Seng were quoted as saying that the state would not incur any costs, appears to be quite mind-boggling, given the fact that prime land is going to be given away.

For the sake of argument, let us use the case of Ivory Properties Group Bhd which this year, won a bid to develop over 40ha at Bayan Mutiara on Penang Island.

Ivory Properties Group had in July this year disclosed that it received a letter of acceptance from Penang Development Corp on its proposal to buy and develop 41 ha of mixed development land in Bayan Mutiara for RM1.07 billion, or RM240 per sq ft.

Ivory is said to have paid RM240 for 70 per cent of ready-to-use land, while the remaining 30 per cent would be for reclamation rights.

If interested companies for the new plan unveiled get RM8 billion and land which will potentially triple in value, this renders an opportunity cost of RM16 billion (assets worth RM24 billion, minus costs of RM8 billion).

The question which now begs an answer is this: For RM16 billion, why does the Penang government not hire professionals and set up its own construction company like the Employees Provident Fund, which controls 40 per cent of Malaysian Resources Corp Bhd?

If the state is intent on proceeding with the projects – which are well-intended for traffic dispersal – it may be prudent for the authorities to borrow the RM8 billion needed to carry out the projects themselves and service the loan.

The current scheme announced appears to offer opportunity costs which are too low for the state and the people of Penang, and the move to privatise profits for such a venture may need to be revisited.

SOURCE: Business Times

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New eco-route allows cyclists to enjoy safe ride

December 7th, 2011 No comments

Avid cyclists can now have an enjoyable ride on the new eco-bike trail at the Balik Pulau Sports Complex in Penang.

Penang Municipal Council Recreation, Tourism and International Affairs director Mohamed Akbar Mustapha said the council spent approximately RM30,000 to put up 51 signboards for cyclists along the 20.5km bike trail.

“With the launching of the eco-bike trail, we expect the number of cyclists to increase as they can now enjoy a leisurely ride and admire the beautiful scenery safely without worries.

“The council will work with the Malaysian Association of Hotels (Penang Chapter) and the Penang Tourist Guides Association to promote Balik Pulau as a bicycle-friendly tourism spot,” he said at the recent launch.

The trail was launched by Penang State Assembly Speaker Datuk Abdul Halim Hussain at the complex.

“Cyclists will pass through padi fields and a mangrove forest.

“About 80% of the trail is off-road,” said Abdul Halim.

He said he made several suggestions to the council to improve the track such as installing lights along the stretch and building rest areas such as gazebos for the convenience of the cyclists.

“It is hoped that Penang will have the best bike trail in the country and become a bike-friendly city by 2015,” he said.

Source: The Star

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E&O: Hot property in Penang

December 2nd, 2011 No comments

Eastern & Oriental Bhd (Dec 1, RM1.41)
Maintain outperform at RM1.39 with revised target price of RM2 (from RM1.98):
Although annualised 1HFY12 core net profit was only 30% of our forecast, it is in line as future quarters should be stronger. We make no change to our target basis of 30% realisable net asset value (RNAV) discount or "outperform" call.

But we adjust our target, RNAV and earnings per share for housekeeping and ICSLS conversion.

E&O sold RM380 million worth of properties during 1HFY12, 52% more than its RM250 million sales in 1HFY11. Unbilled sales leaped from RM650 million a year ago to RM880 million. The bulk of 1HFY12 sales came from Penang, with the remainder coming from unsold units of St Mary Residences in Kuala Lumpur. As expected, E&O did not propose a 2Q dividend, in line with last year's practice and our expectations.

Take-up rates for both the St Mary Residences and Phase 1 of the Penang Quayside condos have reached 80%. Phase 2 of the Penang condos will be launched this month and indications are that demand should be strong.

Although minority shareholders may be disappointed that there was no general offer, we view positively the recent emergence of Sime Darby Bhd as a 30% shareholder of E&O. This provides E&O with a strong parent which could come in handy for the upcoming Phase 2 of Seri Tanjung Pinang. Also, we would not discount the possibility of joint ventures between the two companies as Sime Darby has 37,000 acres of undeveloped land with an estimated gross development value of RM100 billion. E&O's expertise in high-end residential projects will provide a good fit with Sime, especially for its landbank in the Klang Valley. – CIMB Research, Dec 1

SOURCE: The Edge Property

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Redevelopment deal of Crag Hotel stalled

December 1st, 2011 No comments

GEORGE TOWN: A deal for a developer to redevelop one of the state’s oldest landmarks on Penang Hill — Crag Hotel — appears to have stalled, due to an alleged exclusion of surrounding properties in the hotel’s vicinity.

Business Times has learnt that although Sri Nisuh Sdn Bhd had been initially promised several bungalows adjacent to the historic hotel when the contract was discussed, the said bungalows did not find their way into a draft agreement.

“Three bungalows adjacent to Crag Hotel were promised to be integrated into a memorandum of understanding between the Penang authorities and developer,” a source said.

“However, the said properties were excluded by the State Secretary in the draft agreement.”

In May, the state government announced that Amanresorts International Pte Ltd will run the famous Crag Hotel on Penang Hill, which was one of the earliest hilltop homes and later turned into a hotel in 1929.

The hotel has been in a neglected and derelict state since 1977 after the International School of Penang (better known as Uplands School) vacated the premises and moved to George Town.

The project was reported to have been awarded in April to Sri Nisuh Sdn Bhd and the company was said to be investing US$12 million (RM38.04 million) to finance the project, which was to be completed within 30 to 36 months.

Chief Minister Lim Guan Eng was quoted at the end of May as saying that redevelopment project will take off after an agreement is inked between the developer and the state government two weeks after he made the announcement.

He said the Aman Group would be awarded a long-term contract tenure by the state to manage the property.

Three months ago, Amanresorts’ media communications manager Anjali Nihalchand said that the firm would be forwarding its proposal to the state’s Chief Minister Incorporated on September 5 for final approval.

When contacted yesterday to enquire on the status of the approval sought from the state authorities, Anjali said in an email that there were no current updates as “this is still at its very early stage and we have not got anything further to share at the moment”.

Meanwhile, state-owned Penang Hill Corp director Datuk Lee Kah Choon did not comment on whether approval had been granted as yet to the developer of the proposed project. “This is a state project,” he said in a SMS reply, “and you may wish to check with the State Secretary’s office.”

State Seccretary Datuk Fariz Darus did not respond to an email enquiry from Business Times.

SOURCE: Business Times

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