Firm aims for top spot in property management

SUBANG: Andaman Property Management Sdn Bhd (APM), which is currently building and managing 10 ongoing property projects locally, aims to be the country's leading property management and property related services company.

Its executive director (sales and marketing) Datuk Vincent Tiew said from Jan 2011 onwards, the company would be launching and managing at least 10 properties worth RM2bil simultaneously.

Tiew said of 10 projects it currently managed, four belongs to the Andaman group.

“And we anticipate more developers and landowners to request for our services this year,” Tiew told StarBiz, adding that APM's business model was to develop and manage properties while generating high yield and fast turnaround for developers and landowners.

APM was formed in 2009 by some of the management members of the Andaman Group, an established property developer.

“After honing their skills in property development and managing properties of the Andaman Group, they decided to form an independent company, which is how APM was incorporated,” Tiew noted.

On its business model, Tiew said: “We want to be a leader in the industry in the country and build a strong track record of developing, maintaining and adding value to the properties that we manage in terms of yield, occupancy rates and capital gain for our clients, including property buyers.”

He said when APM was given the go-ahead to develop and manage a property project, it would first be looking to fulfill the developers expectation of the property project in terms of commercial reality, yield, bottom line.

“And our work starts from the onset of planning, authority management, construction and building maintenance to units selling, project administration and securing of strata-title. We also provide developers and landowners advice on how to best position the property development in terms of architectural design and other value-added services in line with developers/landowners expectations,” Tiew said.

On pricing he said: “We built shop lots and residential developments with per unit prices ranging from RM2mil to RM10mil and RM350,000 to RM1mil respectively.”

APM targeted its properties at the mass market to ensure that they remain in demand, even during the downturn, Tiew said, adding that for certain properties, buyers were guaranteed with return on investment.

APM's current property projects for the Andaman Group include Kota D'Sara with gross development value (GDV) of RM125mil, and Casa Residenza (GDV: RM180mil), both located in Kota Damansara. APM plans to launch the The Academia@South City Plaza in Seri Kembangan and the RM700mil The Arc@Cyberjaya in Cyberjaya.

By The Star

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Sycal Ventures unit signs property JV

Sycal Ventures Bhd's wholly-owned unit, Sycal Properties Sdn Bhd, has signed a joint venture agreement with Global Net Communication Sdn Bhd.

In a filing to Bursa Malaysia today, Sycal said the companies aimed to jointly develop three plots of land in Kuala Lumpur into a high-end residential villas with estimated gross development value of RM70 million.

It said the development would contribute positively to the construction order book of Sycal Group.

By Bernama

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Sunrise shares to be delisted on Jan 21

SUNRISE Bhd’s shares will be removed from the Main Market of Bursa Malaysia with effect from 9am on January 21.

Sunrise, which develops high-rise residences and commercial properties locally and abroad, has been taken over by UEM Land Holdings Bhd.

By Business Times

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UEM Land jumps as Sunrise bid completes

UEM Land Holdings Bhd, a Malaysian property developer, rose to a record in Kuala Lumpur trading as it’s close to completing a takeover of Sunrise Bhd.

The stock climbed 1.7 per cent to RM2.94 at 9:16 a.m. local time.

The takeover offer closed on Jan. 7 and it will now invoke a compulsory purchase order for all remaining shares of Sunrise, it said in a statement.

By Bloomberg

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JCorp may sell land, property to pare down debts

KUALA LUMPUR: Johor Corp (JCorp) is considering selling various assets including some landbank, properties and plantation assets to partly repay its current RM3.6bil debt which is due for repayment in July next year.

The state investment arm first plans to bring down the debt level of RM3.6bil to a “sustainable level” of between RM1bil and RM1.5bil following a debt restructuring exercise, its newly appointed president and chief executive Kamaruzzaman Abu Kassim said.

That would mean that it needs to raise at least RM2.1bil by 2012.

“About 70% (source of funding) for the RM2.1bil needed has already been identified and this includes selling some of our assets,” he said at a meeting with the media yesterday.

The group has “saleable assets” of RM2.1bil, Kamaruzzaman said, without elaborating.

JCorp's landbank and properties are largely in Johor and this includes up to RM2.5bil in commercial properties.

At at March last year, it had about 2,000ha to be developed in the Iskandar Malaysia region.

It also has major plantation and palm oil businesses in Papua New Guinea.

Kamaruzzaman said the group's remaining debt would be restructured via new loans or instruments.

JCorp has appointed CIMB Bank and Maybank Investment Bhd as advisors for the restructuring.

Both banks are also the biggest lenders to JCorp which could probably mean that both banks own the bulk of the bonds due for maturity.

According to JCorp's 2009 annual report, it has RM705mil in cash but a whopping RM6.62bil in debt and with hardly any free cash flow.

The RM3.6bil debt was due to JCorp's investment projects since 2000, “mainly in landed property and industrial areas”, it has been reported.

JCorp has been in the news in recent weeks after it rejected two bids for the takeover of its QSR Brands Bhd. One was by a company linked to tycoon Tan Sri Halim Saad and another by the Carlyle Group.

JCorp is the ultimate shareholder of the lucrative fast-food businesses of QSR and KFC Holdings (M) Bhd.

Its interests in both companies are held through its 53%-owned subsidiary Kulim (M) Bhd, which main business is in the plantation sector.

Kulim owns a 57.5% stake in QSR, which in turn, owns a 50.6% stake in KFC.

As one of the country's largest state economic development authorities, JCorp has about 250 companies under its stable from which it currently derives RM90mil in annual dividend income, Kamaruzzaman revealed.

Kamaruzzaman said yesterday there was a possibility some of these might be listed in the future. “But the proceeds will not be to repay our current debt due for maturity,” he said.

JCorp's other key assets apart from those in the recent limelight include private healthcare service provider KPJ Healthcare Bhd, property development companies Johor Land Bhd and Damansara Realty Bhd, intrapreneur venture business Sindora Bhd and the London-listed plantation company, New Britain Palm Oil Ltd (NBPO). (Kulim owns about 50% of NBPO).

NBPO is one of the world's largest producers of sustainable palm oil.

By The Star

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Hua Yang sells retail units

KUALA LUMPUR: Main-board listed Hua Yang Bhd is selling 73 retail units in its flagship commercial property, One South, Sungai Besi, to South Crest Synergy for RM105mil.

One South, an iconic landmark in Sungai Besi, is a mixed development project spread over 1.72ha and is a key revenue driver for the company.

The development represented a large chunk of RM1bil worth of projects that the group was rolling out, the company said in a statement yesterday.

By Bernama

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Mitrajaya unit wins RM53.5m contract

PROPERTY developer Mitrajaya Holdings Bhd’s subsidiary has won a RM53.5 million contract for the construction and completion of five units of hangar, one unit of two-storey multipurpose café building, two units of electrical substation and one unit guardhouse at Subang Airport, Selangor.

The contract awarded to Pembinaan Mitrajaya Sdn Bhd, is for a period of 10 months and work starts on January 1 2011.

By Business Times

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Land rights and legacy

MALAYSIA is 53 years old this year. More than 20 years ago in the 1980s, a group of Penans from Sarawak, wearing only flimsy loin cloths and feathered head gear, flew into Kuala Lumpur to protest against the deforestation. The opening up of the interiors resulted in environmental degradation, clogging rivers and cutting off their source of food and clean water supply.

They contented that the forest was their home, ancestral grounds, source of livelihood, that they have native customary land rights'' to the forest. Remember the movie Avatar?

Fast forward to 1990s, a decade later. Initial plans to build the Bakun hydroelectric dam in Sarawak created another hue and cry among natives. Thousands of Kayans and Kenyahs were displaced. The 67,000ha reservoir, about the size of Singapore, is being flooded right now, after much delay in its construction.

Enter the present. Early this week, the Kampong Baru Development Corp Bill was tabled for its first reading. It will go through the usual process for debate in the lower house of Parliament and in Senate, the upper house.

That Bill paves the way for the setting up of a corporation to implement the development of Kampong Baru (literally translated new village), a Malay reserve enclave that goes back to British India days in the late 19th century.

Covering about 380 acres amid the progress and modernity of the city, the village is a rustic world of timber and concrete housing, with chickens running helter skelter admist the gleaming Petronas Twin Towers. In Kampong Baru, traditions still reign supreme.

For years, the different administrations have tried to bring development to the land owners there ar 4,300 lot owners only to face a palette of issues, from legal to political to racial. It is the hotbed of Malay sentiments.

What has the natives of Sarawak laying claim to the forest got to do with the Malays laying claim to Kampong Baru? First, they are all Malaysians, known singularly as bumiputras, or sons of the soil. Secondly, they want their land rights to be protected.

Land ownership is a funny thing. It stirs up much sentiment within each of us, no matter what tribe we may hail from. Although we may lay claim to modernity and display elements of it, in many ways, if we examine the roots of our being, each of the race that make up this country is tribal. And each of us have a legacy we want to protect and pass on to future generations.

Legacy goes beyond land ownership, or wealth but has much to do with it. Legacy also includes values, knowledge, experiences that are passed down from generation to generation. These are the intangibles that must be considered as assets, as much as the tangibles like land and houses.

Legacy should not just denotes the past. It includes the present and future because mankind is made in such a way that they enter this world with the desire to leave something for future generations.

Herein lies the need for strong leadership because how a family or a country is governed has a strong influence on the future. The core issue of Kampong Baru development will be its Malay land rights, just as the natives of Sarawak demand their native customary rights, just as everybody in this country desire his right to live, work and prosper in this country, unquestioned.

The number of hotels, office blocks, residential houses or condominiums, roads and healthcare are important, but when laid side-by-side with the issue of the legacy of the Malay community of Kampong Baru, the future architectural landscape seems peripheral.

Kampong Baru is among several mega property projects to be undertaken by the government but it is probably, by far, one that may potentially be the most contentious because of this issue of legacy and land rights.

Let's have consensus, not directives.

Assistant news editor Thean Lee Cheng is all for development, but don't leave out the soul of that development.

By The Star (by Thean Lee Cheng)

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IJM unit wins RM460m job from Naza TTDI

PETALING JAYA: IJM Corp Bhd said its wholly-owned unit received a contract worth RM460.59mil from Naza TTDI Construction Sdn Bhd for superstructure works for the latter’s development in Kuala Lumpur.

It told Bursa Malaysia yesterday that IJM Construction Sdn Bhd received the work contract acceptance letter on Dec 16 for the execution and completion of superstructure works for the Platinum Park Phase 3 along Jalan Stonor.

Phase three includes the proposed development of two office tower blocks of 50 and 38 levels, comprising one facilities area, eight levels of podium carpark and three levels of basement carpark.

The completion date for this project is Dec 31, 2013.

Platinum Park is an integrated high-end residential and commercial development. It will see seven towers, namely two super condominium towers, a serviced apartment, a five-star hotel and three Grade A office towers.

By The Star

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Funds for the building allocated over the years

The allocation to rebuild the Petaling Jaya mayor’s official residence was first included in the 2008 Budget, with RM871,900 budgeted but was not used.

A total of RM900,000 was thus side aside for the purpose in the following year’s budget and that raised some eyebrows. An additional RM600,000 was allocated in Budget 2010 due to an increase in the cost of building materials.

Some questioned if the expense was necessary but the full board approved it eventually as the official residence had been torn down due to being termiteinfested. The site was left idle for years and became an eyesore.

All Petaling Jaya Residents Association (Apac) chairman Johan Tung Abdullah said the money spent on the mayor’s official residence was “very generous” but declined to elaborate.

“Now that you have a huge mansion there, it is important for the Petaling Jaya City Council to maintain the asset properly and ensure there is no recurrence of termite infestation. We do not want to see another RM1.5mil allocated for the same purpose again a few years down the road,” he said.

Former Apac chairman Liew Wei Beng, who was in office when the issue was first raised, said the allocation was fair but that the council could have been more transparent in how they handled the money.

“It is fair that the mayor be provided with a proper residence to show his status and the amount is not exorbitant.

“Still, the council was not transparent throughout the process. The allocations budgeted for different years were rather confusing. Also, questions arise over whether there was an open tender? Was it done properly? We did not know,” he said.

MBPJ councillor Richard Yeoh, who is the former executive director of Transparency International, said he did not see a problem in the construction of the new residence.

“The mayor’s residence had been there for about five decades but it fell into a state of disrepair due to termites. Currently, spending RM1.5mil for a house for the mayor is reasonable as there should be an official residence for the mayor to host visitors or to have official functions.

He added that the mayor’s residence was a public asset and proposed that the community and councillors be allowed to use it for public events.

By The Star

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Asia to lead world office building: report

Asia will lead the world in developing new office space as firms shift focus away from lacklustre markets in Europe and North America, a report said Tuesday.

Asia will be the only major global region to boast "significant" office completions in 2010 and 2011, before slowing somewhat in 2012, said the new report by international property firm CB Richard Ellis.

The region -- including Hong Kong, mainland China and Singapore -- will account for about two-thirds of world office completions by 2012, far outpacing development in Western Europe, North America and the Pacific, including Australia and Japan, said the report.

"Asian office development has by now fully resumed after slowing down briefly in the wake of the global economic downturn," said the report, "Global Office Development Cycle: Where are we now?"

"Other regions, in contrast, are experiencing either slightly below normal completions, such as the Pacific, or relatively scant completions, such as Western Europe and North America."

Asia will account for about 65 percent of the 293.2 million square feet (26.4 million square metres) completed in leading global office markets between 2010 and 2012, the report said.

Europe will account for about 23.6 percent, or 69.1 million square feet, of the total followed by North America at 7.9 percent (23.1 million square feet) and the Pacific with about 3.6 percent (10.5 million square feet).

On an annualised basis, office completions in North America -- pounded by the global financial crisis -- would drop by 70 percent between 2010 and 2012 compared with the yearly average between 2001 and 2009, the report said.

By contrast, Asia's average yearly office completions would soar by 50 percent compared with the previous nine years.

"Office demand in North America will remain sluggish in the near term as companies continue to be cautiously optimistic and try to preserve their cash reserves," the report said.

The big shift reflects firms looking to Asia amid a sputtering economic recovering in the West, and moving employees to boost their regional presence, the report said.

"This shift in corporate activity is reflected by the way in which the regional focus of office development has changed, especially since the global economy has begun to emerge from the financial downturn."

By AFP

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SunCity, Sunway accept merger proposal

Sunway City Bhd and Sunway Holdings Bhd, two Malaysian property developers, said their respective boards accepted a merger proposed by Jeffrey Cheah, chairman of both companies.

Sunway City’s board said in an exchange filing that its board considered advice from independent directors and Goldman Sachs (Malaysia) Sdn Bhd.

Sunway Holdings said in a separate statement that its board took independent advice from OSK Investment Bank Bhd.

By Bloomberg

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The perils of the American dream

There was this tagline The American Dream is truly attainable! in a local newspaper advertisement marketing US properties.

The advertisement highlighted earning an annual rental income with a three-bedroom detached house of up to 20%, which in Malaysia, would be considered a bungalow.

The nice house and attractive proposition aside, is that American dream really attainable? And if it is, is it sustainable?

If it were, the US government would not need to pump nearly US$1 trillion into the economy and neither would US President Barrack Obama speak to CEOs to seek their help to ease unemployment which is running at more than 9%.

Malaysia's unemployment rate is 3.2%, which is technically considered as full employment. But this piece is not about the American economy, or the Malaysian economy.

It's about the pursuit of the American dream which Hollywood and savvy marketing have enticed us with over the years. That American dream constitues a nice house in a middle class neighbourhood, sons who drive to college, daughters who are trendily dressed in class.

They take annual holidays and are up to date with the latest trends and lifestyle. They go after the latest gadgets that technology has spawned. Sounds familiar? But that lifestyle has also incurred high household debts which in some cases has resulted in foreclosures in the United States.

The situation in United States today is due to choices made years ago. It did not begin with Lehman Brothers fall in 2008, it started way before because of materialism and consumerism.

The Americans have been so good at marketing and advertising, they have made consumerism and marketing into an art and the Americans bought into it.

They are selling that same dream to Asia and other parts of the world just as they have very successfully sold us the various gadgets that technology has spawn.

Out of a population of 28 million, Malaysia has a working class of 12.5 million, of which two million are foreign workers. Of the remaining 10.5 million, 1.5 million are in the public sector.

Only 5.5 million are formally employed in the private sector. The remaining 3.5 million are making a living as traders.

Of late, the authorities and the press have been talking about being in the middle income trap. The middle income group has a monthly salary of between RM2,000 and RM10,000.

Most of us belong to this group whose profile is a house, or several houses, in the Klang Valley and the major towns of Malaysia, with school going children in private or overseas schools and universities. It also includes young graduates who earn slightly less than RM2,000 but who within a short time, move from lower income bracket to the lower middle income group.

This middle income group comprises about half of the 12.5 million working population, who are in a way pursuing that American or Malaysian dream.

The resulting trend is that house buyers no longer seek to buy a house, but to buy a lifestyle.

And developers prefer to build lifestyle homes, because the margin is greater. Lifestyle housing also gives them the added edge of branding themselves.

If it is an apartment, the bigger the better. Buying a house is no longer enough, one has to buy a lifestyle house with designer fittings and sanitary ware.

Education for the children is a premium. Technologically advanced gadgets and branded attire completes the picture.

In short, technically we are geographically in a different location but the people and that American dream remains the same.

Some 30 to 40 years ago, the manufacturing sector was the mainstay of the American economy. It now accounts for 12% of US jobs. Today, services, creation and innovation accounts for a large chunk of it.

In Malaysia, manufacturing used to account for about 35% of gross domestic product (GDP). Manufacturers used to be the largest employers.

Today, contribution from that sector has dropped to 29% of GDP, giving employment to a third of the 5.5 million private sector salaried workers.

The service sector is expected to be the largest employer this year, constituting more than half of the total employment, followed by manufacturing.

For years, the problem in the United States was hidden by cheap debt. We have that today in Malaysia. Banks are pushing attractive mortgage terms. Another way to finance that lifestyle is to leach from the Employees' Provident Fund to finance home mortgages, children's overseas education and private investments in unit trust.

And so the baby boomers (those born in the the 1950s and 1960s) have to postpone their retirement because banks are now approving loans up to the age of 65 or 70.

Easy debt has become a millstone in latter years. Come 2011, house buyers who purchased properties with the 5/95 scheme and variations of it, will be getting the keys to their properties. They paid a downpayment of only 5% of their property price in the first quarter of 2009.

They will now have to cough out the other 95%. Americans are slowly relinquishing that American dream. We are aspiring towards it. Is the American or Malaysian dream sustainable? Food for thought.

Like other middle class wage earner, assistant news editor Thean Lee Cheng is herself a victim of the American dream.

By The Star

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Stratified property issues need attention

KUALA LUMPUR: Developers of stratified properties should be more transparent with buyers about the buildings' overall maintenance cost.

International Real Estate Federation (Fiabci) Malaysia president Yeow Thit Sang said there had been a lot of unresolved problems, especially on the collection of maintenance fees, in such properties.

Yeow said there were two million strata-titled residential units and the problem was growing but the resolution had not been fast enough.

Speaking on the sidelines of the 5th Property Management Seminar here yesterday, he said even before the purchase of such properties, buyers must be informed of the maintenance fees and processes involved.

He said the Commissioner of Buildings (COB) should also act more forcefully and speedily to overcome the problem as it had the authority to deal with houseowners who did not pay maintenance fees.

The COB must send a message because they have the power to attach the property of the defaulting condominium owners, he said.

On grey areas involving stratified properties such as fees for car parks in a mixed complex, Yeow said there was a need to find a correct formula on how to handle and share the fees which had different users.

By Bernama

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