GEORGE TOWN: The proposed Greater Penang Transformation Programme (GPTP), which is likely to include parts of Kedah and Perak, may study how to improve the agriculture supply chain and logistic efficiencies, among others.

Under the 10th Malaysia Plan, Greater Penang has already been earmarked to benefit from a total investment of RM17.9 billion to upgrade physical infrastructure to enhance access and connectivity.

"This needs to be synergised with the Entry Point Projects of the Economic Transformation Programme to prime Penang as the leading urban centre in the Bay of Bengal and the Indonesia-Malaysia-Thailand Golden Triangle," Minister in the Prime Minister's Department Datuk Seri Idris Jala told Business Times.

Jala is also chief executive officer of the Performance Management and Delivery Unit (Pemandu), which will arrange lab sessions to tackle the GPTP.

Pemandu will do this with the help of Khazanah Nasional Bhd and the Penang state government.

"We expect the four to six-week Greater Penang Transformation Programme (GPTP) lab to begin as soon as possible and have commenced preparations to determine the scope of the lab, organisational roles, processes and participants," he said.

The GPTP may also look at how to boost tourism and education.

"Medical travel and the George Town-Butterworth waterfront development will be a huge boost to the tourism sector," he added.

In education, the lab should review the current and future needs for human capital in the region and seek new initiatives by the private sector to address those needs.

Agencies that may be involved include the Economic Planning Unit, the Northern Corridor Implementation Authority, along with state and local authorities, such as the Penang State Economic Planning Unit and Penang Development Corp.

Others may include infrastructure and utilities firms, learning institutions like Universiti Sains Malaysia, heritage and public-interest bodies, along with industry and business groups such as those involved in property, tourism and industry.

SOURCE: Business Times

Shorefront Residences represents their maiden foray into the Penang market. Situated on Farquhar Road which is located within the Unesco Heritage buffer zone, Shorefront residents can be assured of both exclusivity and prestige wrapped around the charm of old Penang. Located next to the Historical Eastern and Oriental Hotel (est 1885).

Features:

• Prime freehold location
• Low rise, low density
• Own lap pool and view of the sea
• Two units per floor served by two private lifts
• Two car parks for each unit
• Clubhouse with pool, gym and function room facilities

Location : Georgetown, Penang
Property Type : Low rise condominium
Land Tenure : Freehold
Developer : YTL Land
Indicative Price : RM2,800,000 onwards

Aerial view of Seri Tanjung Pinang phase one, showing Straits Quay festive retail mall.The upcoming Quayside Seafront Condominiums is superimposed on this actual site photo.

PETALING JAYA: Eastern & Oriental Bhd (E&O) is targeting to commence reclamation work next year for 740 acres of land in Tanjong Tokong in the north-east coast of Penang for its RM12bil Seri Tanjung Pinang phase two (STP2) development.

Executive director Eric Chan said the group’s subsidiary, Tanjung Pinang Development Sdn Bhd, had received the approval in principle for the masterplan of STP2 from the Jabatan Perancangan Bandar dan Desa Pulau Pinang via a letter dated April 11.

“It should take two years from the start of the land reclamation before the first project launch can be embarked upon.

“Phase two will be a mixed integrated development comprising two islands of approximately 740 acres in size. At three times the size of phase one, phase two is expected to generate RM12bil in gross development value,” Chan told StarBiz.

As in phase one, he said residential property would be the key component in STP2, besides commercial and public spaces.

“In totality, Seri Tanjung Pinang phases one and two will embrace a range of residential, commercial, recreational and leisure properties within an integrated masterplanned development.

“We expect this iconic development to ultimately redefine Penang island on the world map as a vibrant new seafront resort destination to reside, holiday, work and invest,” he added.

Chan said STP2 would take the E&O brand to the next level and support the group’s aspiration to extend the brand regionally and globally.

“The development will also be a symbol of pride and progress, gaining worldwide publicity and prestige; and attract capital inflows and investment, employment and business opportunities, especially for Penang’s tourism. It will complement other major projects to turn the state into a world class city and an international property destination,” he added.

In 1992, TPD was granted the exclusive right to reclaim and develop approximately 980 acres of land in Tanjong Tokong.

It has to date reclaimed and is continuing to develop phase one of the project comprising about 240 acres of land.

The total GDV for phase one of Seri Tanjung Pinang is approximately RM4bil.

The E&O group, through TPD, had sought the state’s approval to reclaim the balance concession area of about 740 acres.

In a filing with Bursa Malaysia on Tuesday, E&O said while the in-principle approval was a vital step towards being able to reclaim the balance concession area, there were other steps still to be undertaken and approvals to be obtained before reclamation works could actually commence.

It said while it was too early to outline the detailed effects of the approval in respect of the masterplan or its implementation timetable, “the board of directors of E&O is of the view that in the longer term, the group will derive substantial benefits with a successful implementation of the in-principle approval.”

On the progress of Seri Tanjung Pinang phase one, Chan said more than 600 landed residential units and 217 serviced suites had already been completed and sold to date. There will also be seven condominium towers.

The landed properties include the Ariza range of courtyard and seafronting terraced houses, Avalon and Acacia semi-detached homes, and the Martinique, Skye and Abrezza villas by-the-sea.

Last February, the first tower of the 21-acre Quayside Seafront Resort Condominiums was launched and another two towers were launched in the last 12 months. The overall take-up of the launched condominiums is about 75%.

Meanwhile, the commercial area includes the Straits Quay festive seafront mall which has 270,000 sq ft of net lettable area; a 7-acre parcel of TESCO hypermarket development and a few other smaller plots.

Chan said since its soft opening last November, the Straits Quay mall had recorded a tenancy occupancy of close to 60%, comprising a myriad of marina-fronting food and beverage outlets, fashion, and lifestyle stores.

SOURCE: The Star

GEORGE TOWN: The RM2.94bil in gross sales value (GSV) of housing projects to be launched this year is expected to generate about RM3bil worth of jobs for the construction and renovation industries in Penang.

Penang Master Builders and Building Materials Dealers Association (PMBBMDA) deputy president Lim Kai Seng told StarBiz that about RM2bil would benefit the local construction industry, while the remaining RM1bil would go to the renovation sector.

“It is usual for the owner of a unit to spend about 30% of the property’s value on renovation.

“This is why about 30% of the RM2.94bil GSV or about RM1bil will benefit the local renovation industry,” Lim said.

StarBiz had reported that some 2,441 units of residential and commercial properties with an estimated RM2.94bil GSV would be launched on the island this year.

The south and south-west of the island will see some 1,275 units of residential and commercial properties launched with an estimated gross sales value (GSV) of RM1.45bil, while the north-east district will see the development of about 1,166 units of properties valued at RM1.49bil.

The commercial component in the south and south-west district is about 156 units with a GSV of RM221mil.

In the north-east, the commercial component will comprise 308 serviced suites and shop lots with a gross sales value of RM160mil.

Meanwhile, PMBBMDA president Vincent Ong said for 2010, the total value of construction contracts awarded in Penang was RM3.67bil, compared with RM4.5bil in 2009, quoting the latest Construction Industry Development Board (CIDB) report.

“In 2010, there were 326 projects, comprising 71 government and 255 private projects with a construction value of RM3.67bil, compared to 356 projects, comprising 92 government and 264 private projects, in 2009,” Ong said.

Ong said this year the local construction industry in Penang should perform better, as there would be more government contracts to be tendered out.

On April 19, the CIDB was scheduled to hold a Customer Day at the PMBBMDA headquarters in Penang Chinese Town Hall, Ong said.

“The purpose of the event is to disseminate the latest information on the construction industry to our members. It is also to give them the opportunity to renew their CIDB licences. The event will also serve as a platform for our members to make enquiries about CIDB,” he said, adding that PMBBMDA had 130 members.

SOURCE: The Star

KUALA LUMPUR: While Penang's property market has been sizzling, the stock price performance of the island's largest developer – Eastern & Oriental Bhd (E&O) – has been lukewarm, although that could very well soon change.

After facing a couple of challenging quarters compared with its peers in terms of investor interest, it appears that E&O may finally get a break after it received approval for the second phase of its proposed mixed development in Tanjung Tokong.

The counter has lagged behind the Kuala Lumpur Property Index, which has risen 8.5% year-to-date (YTD). E&O's YTD gains are meagre even when measured against those of its larger peers with an investor following. YTD, Mah Sing Group Bhd has risen 41.3%, UEM Land Holdings Bhd is up 13.9% and S P Setia Bhd's shares have gained 9.1%.

But on Wednesday, Apr 13, E&O gained nine sen to RM1.26, representing a YTD gain of 6.8%, on news of the approval, which was hailed as a "breakthrough" by some analysts covering the stock.

After Wednesday's rally, E&O's stock is finally trading above its latest book value of RM1.20 (as at Dec 31, 2010), but only barely.

UEM Land, meanwhile, is trading at 3.8 times book, S P Setia at 2.9 times and Mah Sing at 2.4.

In a note on Wednesday, Kenanga Research pointed out the green light for the reclamation of Seri Tanjung Pinang 2 (STP2) from the state government indicated that the mid-sized property player, which as at on Wednesday had a market capitalisation of RM1.06 billion, had overcome the biggest hurdle.

On Tuesday, E&O announced that it had received a letter dated April 11 from Jabatan Perancang Bandar dan Desa, Pulau Pinang, which communicated the state's approval in principle for Phase 2 of the master plan submitted by E&O unit Tanjung Pinang Development Sdn Bhd (TPD).

In 1992, TPD was granted the exclusive right to reclaim and develop approximately 980 acres of land in Tanjong Tokong. To date, the group has reclaimed about 240 acres under Phase 1 of the project which it is still developing.

"Although the in-principle approval came in a few months later, from previous guidance at end-2010, we are positively surprised since Penang is known for long approval processes," Kenanga said. "Clearly, the current state government is striving to improve and shorten development approval processes."

Despite this positive development, Kenanga said the estimated land reclamation and infrastructure cost of RM2.3 billion was still a hefty sum. It noted that E&O had yet to make a decision on the financing method for the reclamation, although it was believed to have "many suitors lined up".

"Our preferred financing method [is] allowing reclamation costs to be borne by another party with portions of STP2 land as payment. Although E&O's share of land and gross development value (GDV) would be reduced, this option means no balance sheet risks, allowing the group to embark on new developments in the Klang Valley," it said, adding that the GDV for STP2 could be as much as RM10 billion according to its estimates.

HwangDBS Vickers Research also noted that the coast was still not entirely clear for E&O, which would still see close scrutiny from the state government to ensure it complied with the requirements associated with planning approvals.

The change in state government following the March 2008 general election saw Penang-based developers such as E&O and Equine Capital Bhd facing stumbling blocks in approvals for various projects.

"As the largest landowner (1,123 acres including STP2) and operator of two hotels on Penang island, E&O stands to benefit from the federal government's Economic Transformation Programme for Penang (currently under four to six weeks' study), which could see large infrastructure projects such as the Penang Outer Ring Road and the LRT/monorail project being revived, as well as the rejuvenation of George Town's commercial centre less than 5km from STP," noted HwangDBS Vickers Research.

OSK Research, following a visit to E&O's sales gallery for STP, was also fairly upbeat on the company's aggressive marketing to both foreign and local buyers and its strong take-up rates.

Commenting on the high-end pricing of its Quayside Seafront Resort Condominiums of up to RM1,200 per sq ft, OSK Research said the continued attraction of foreigners under the Malaysia My Second Home (MM2H) programme would mean that there could be further growth in Penang's expatriate community.

However, Kenanga Research noted that still weighing down E&O's share price performance was the ongoing conversion of its irredeemable convertible secured loan stocks (ICSLS) with the impending likelihood of full mandatory conversion in October 2011.

Some 363 million ICSLS were issued in October 2009 from a rights issue to raise over RM200 million to address the company's then high gearing.

The 10-year ICSLS were issued at 65 sen, with an 8% coupon rate and can be converted to E&O shares anytime up to October 2019. E&O also has the option to call for conversion of the ICSLS into new E&O shares after two years of issuance and if its share price exceeds RM1.

An analyst said that as the ICSLS were issued at 65 sen, the progressive conversion of the instruments had created a share overhang in the last few years.

To date, E&O's STP development has seen 240 acres already reclaimed under the first phase of the project with an estimated GDV of RM3 billion, according to OSK Research, which also estimates that STP2 could have a GDV of up to RM12 billion.

The cost of reclaiming land for STP1 was about RM90 per sq ft, according to a March 2010 report from Kenanga Research.

An analyst noted that selling prices for E&O's homes had surged strongly, far outpacing the rise in reclamation costs. "Effectively, the reclamation rights for STP are like a landbank warrant", he said, adding that it gave E&O access to a large landbank which it could reclaim according to its needs and cash flow position.

STP, which is the island's largest seafront development, comprises 980 acres of reclaimed land largely featuring high-end landed and non-landed residential properties with commercial and retail precincts.

E&O is under coverage by five research houses, of which three have a "buy" recommendation on the stock while the other two call for a "hold".

SOURCE: The Edge Property