THE average price of a house on Penang Island in 2009 was RM550,000 — the highest in the country and RM160,000 more than the average price of a house in Kuala Lumpur.

State government think tank, Socio-Economic and Environ-mental Research Institute (Seri), said the price was eight times the average household in-come.

Its senior fellow Dr Lim Mah Hui said the house price should be between three and four times the average household in-come.

Dr Lim added that most houses that were built did not cater to the need of the majority of people.

“The building of super luxurious condominiums should not be encouraged. There are too many empty houses in Penang. The demand is there but it’s not affordable,” he told a press conference yesterday.

Consumers Association of Penang president S.M. Mohd Idris said house prices have soared to exorbitant levels in major cities of the country.

“Even the middle class cannot afford to own a house or apartment, let alone the lower income group,” he said.

Mohd Idris said that it was time for the government to start a public housing policy that provided affordable housing, particularly in urban areas, to people from the lower income group.

“A good example worth studying is the Singapore Housing Board where the government spearheads the building of affordable housing for a majority of its citizens,” he said.

He said the majority of Malay-sians want affordable homes but developers are supplying houses that they cannot afford.

“Developers prefer to cater to investors and speculators who buy to rent or to flip over and make money. They also go overseas to aggressively market properties as they are still cheap by international standards.

“Unlike Indonesia, the Philippines, and Thailand, Malay-sia is one of the few countries in Southeast Asia to allow foreigners to own landed property,” he said.

SOURCE: The Star

GEORGE TOWN: Mah Sing Group Bhd will apply for approval to take over the planning permission for the Tropika Ferringhi project given to the previous land owner.

Mah Sing said in a statement that on 22 November, the group had acquired a piece of freehold land in Batu Ferringhi which had been approved by the authorities for residential development as applied by the vendor from an earlier submission.

“The premium has been paid and a development order procured for landed development (Phase Two) for the project named Tropika Ferringhi.

Subject to authorities’ approval, Mah Sing intends to rebrand the project ‘Ferringhi Residence@Penang’ upon completion of the sales and purchase agreement.

”Mah Sing will be applying to the MPPP for approval to take over the planning permission upon completion of the land purchase,” the statement said.

Mah Sing was responding to an MPPP statement which said that the group had not submitted any application for planning or development approval for the Ferringhi Residence@Penang project.

Mah Sing had said the group would unveil its RM800mil residential project on a 61-acre site in Batu Ferringhi in the first quarter of 2011.

Group managing director and chief exe-cutive Tan Sri Leong Hoy Kum said the pro- ject would be a gated and guarded scheme, comprising property such as semi-detached and bungalow homes as well as condominiums.

SOURCE: The Star

Sathu Terraces embrace the contemporary tropical style which is full of warm, serene vitality. Simple yet elegant, the minimalist concept is clearly showcased in the clean, neat lines being both modern and spacious.

It features a car porch that is spacious enough to park two cars. With a roofed balcony that provides additional shading for the master bedroom. In addition, the backyard is connected with the common park, thereby negate the need for children to cross thoroughfare.

With 182 units, Sathu Terraces is built with cycling tracks to encourage a low carbon lifestyle, enabling you to enjoy the surrounding lush landscape while taking a ride on your bicycle.

Location : One Residence, Sungai Ara, Penang
Property Type : 2-Storey Terrace
Land Tenure : Freehold
Total Units: 182
Developer : Ideal Property

EASTERN & Oriental Bhd (E&O) (3417) says its unbilled property sales as at September 30 have surpassed peak levels recorded in the year ended March 2008.

E&O, listed on Bursa Malaysia's main board, locked in unbilled property sales of RM604.8 million during the period compared to RM203.7 million registered as at March 31 2008.

This was due to stronger buying sentiments in the high-end segment where it has a niche, the company said in a statement yesterday.

This helped E&O to achieve a net profit of RM17.9 million for the six-month period to September this year, matching the performance of a year ago.
E&O executive director Eric Chan said the profit from its strong unbilled sales position will provide a robust base for an enhanced future performance.

"In addition to this, the recent reopening of Lone Pine Hotel, E&O's boutique resort at Batu Ferringhi, and the upcoming launch of Straits Quay, Penang's first seafront retail mall, are expected to positively impact the group upon achieving targeted operational levels."

Chan said E&O was on a strong platform to capitalise on future growth opportunities and is expanding in all segments.

"We are set to execute a portfolio of current and near-future projects with a total GDV (gross development value) of RM4 billion," he added.

E&O is positive about its hospitality arm, spearheaded by its two heritage hotels in Penang, the E&O Hotel and Lone Pine Hotel.

The company has recently increased its stake in The Delicious Group to 100 per cent and is embarking on an expansion drive locally and regionally.

Plans are under way to strengthen the brand presence of the F&B chain, which currently operates seven outlets in Kuala Lumpur.

SOURCE: Business Times

PETALING JAYA: After nearly 30 years, Malaysian Resources Corp Bhd (MRCB) is poised to join the “premier league” of the property development sector via its proposed merger with IJM Land Bhd.

The company started in 1969, under the name Perak Carbide Sdn Bhd, with its core activity of carbide manufacturing. In 1981, it became known as MRCB, following a major shift in operational interests to property development and investment.

To recap, the government-linked company, with Employees Provident Fund (EPF) holding in excess of 40% stake, announced that it would team up with IJM Land under a newly incorporated company (Newco). The proposal will involve a share swap of MRCB and IJM Land with new shares in Newco.

Newco is expected to take over the listing status of both company in the second half of next year with implied market capitalisation of RM7bil and net asset of over RM3bil where it will emerge as the second-largest property developer in the exchange.

It was largely reported that it would be a synergistic merger given the different strengths of MRCB and IJM Land in the property market segments.

So, what does MRCB bring to the merger with IJM Land?

According to OSK Research, MRCB’s activities are mostly in the commercial sector and heavily concentrated in the Klang Valley, with its flagship project KL Sentral with gross development value (GDV) of about RM12bil.

“Its major shareholder, the EPF, is to undertake the development of the prized Rubber Research Institute (RRI) land in Sungai Buloh where we believed the merged entity may be the frontrunner to undertake the project on behalf of EPF,” it said.

This announcement was made in Budget 2011, whereby the project would involve mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities. The entire development is estimated at RM10bil and is expected to be completed by 2025.

IJM Land, on the other hand, is more focused on township and residential developments in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak with remaining landbank of 6,637 acres and remaining GDV of about RM22.85bil.

This landbank of IJM Land would complement the merger, as according to Kenanga Research, post-completion of KL Sentral, MRCB might not have another equally strategically located landbank and would only be counting on securing a role in EPF’s RRI land development to have a significant new earnings stream.

OSK Research also believed the proposed merger might have been initiated by EPF as part of its efforts to consolidate its property exposure as well as to establish its own sizeable property arm.

Besides MRCB, EPF is also a common and significant shareholder in IJM Corp Bhd and IJM Land.

“This, we believe, will enhance EPF’s capability to achieve its goal of increasing its exposure in the property market as part of its investment diversification strategy,” it said.

The EPF was recently quoted on the merging of IJM Land and MRCB as saying it would first have to evaluate the proposal before deciding on its position.

Based on current information, the EPF is slated to be the second-largest shareholder in Newco after IJM Corp, as the details of the new management structure has yet to be revealed.

On the offer price of RM2.30 per MRCB share on the merger share in Newco compared to RM3.65 per share for IJM Land, OSK Research said it’s a fair offer price but not that attractive.

“The RM2.30 offer price for MRCB offers only a 7% and 12.2% upside from the last closing price (before the merger announcement) and our previous fair value respectively.

“As such, we view the offer price as somewhat fair, and yet not that attractive, owing to the rather limited premium or upside,” it said.

Going forward, although Newco is expected to enter the “premium league” of property sector, the other players in the league are also stepping up in terms of size and capabilities apparent in the current trend of mergers and acquisition in the industry.

On Nov 4, UEM Land Bhd has proposed a merger with Sunrise Bhd, while last week Sunway Holdings Bhd and Sunway City Bhd received a takeover offer from Sunway Sdn Bhd for RM4.5bil in cash-and-share swap.

Thus, although the merger between MRCB and IJM Land is expected to create a giant in the sector next year, Newco is not alone in the battlefield as the other contenders would be equally strong.

SOURCE: The Star