SUNRISE Bhd (6165) plans to launch two new property projects worth some RM1.5 billion in Kuala Lumpur over the next four months.

Executive chairman Tong Kooi Ong said Sunrise will launch 28 Mont' Kiara, a 41-storey tower featuring 460 units of condominiums, each ranging from 3,000 sq ft to 4,000 sq ft, this December.

Early next year, it will launch Solaris KL, two 30-storey towers with 550,000 sq ft of office space on Jalan Sultan Ismail.

Sunrise has done the foundation for 28 Mont' Kiara and hopes to start construction in December, completing it in three years.
He said work on Solaris KL will start early 2010 and the project will be ready in four years.

"We believe the market will do well next year. We are confident of sales because of the location and features of the properties," he said after a shareholders' meeting in Kuala Lumpur yesterday.

Sunrise has applied to obtain the Green Mark certification for Solaris KL, which is issued by the Singapore government and awarded to buildings that are environmentally friendly.

Its 11 Mont' Kiara is the first local residential project to receive the Green Mark. Solaris on the Park, a mixed development in Mont' Kiara, which is yet to be launched, has also won the Green Mark.

Tong is optimistic Sunrise will do well with unbilled sales of RM860 million, which will underpin its earnings for the next two years to 2011.

Most of the unbilled sales or sales that have yet to be booked into its accounts were from higher margin products in Mont' Kiara.

Last year, Sunrise made a net profit of RM156.2 million on revenue of RM803.9 million.

Among the projects Sunrise will launch in 2010 are Solaris on the Park, and a RM1 billion residential project in Richmond, Canada.

Sunrise will launch a mixed development project on 0.6ha of prime land opposite the Petronas Twin Towers where Wisma Angkasa Raya now sits in 2011.

"We have done a market study in terms of the various composition of properties, whether it would be a hotel, a condominium or an office block, with retail space. We have decided what we want. We are at the stage of appointing architects now," Tong said.

The 24-storey Wisma Angkasa Raya, which is around 30 years old, is Kuala Lumpur's first high-rise office building. Sunrise paid RM179 million for land and property last year.

Thinkproperty.my has reported an unusually high number of new listings after the 2010 Budget announcement as well as a high number of price cuts for properties on sale

The reintroduction of a real property gains tax (RPGT) from January 1 next year appears to have triggered a rush to sell properties but agents said it will be very tough to beat the deadline.

Thinkproperty.my, a website that lets people advertise their properties for free, said it has seen an unusually high number of new listings after the 2010 Budget announcement.

There have also been a high number of price cuts for existing properties that are on sale. However, it did not provide detailed numbers.

Last Friday, Prime Minister Datuk Seri Najib Razak said the RPGT will return next year at 5 per cent after it was scrapped in 2007.
But agents think it is just a knee-jerk reaction. Property consultant Sharizal Supian said a property deal takes between three and six months to complete, which means it will be very hard to beat the January 1 deadline.

The RPGT has not been well-received as many think it would halt the growth of the property market.

Thinkproperty.my chief executive officer Asim Qureshi believes the re-introduction of the tax has been a year or two too soon.

"We need some of the feel good factor to gain momentum and this tax can only slow down that momentum.

"Furthermore, I believe that having a tax exemption for property owned for a certain number of years would be better as the tax would target property speculators," he said in a statement.

Asim said Malaysia is increasingly seen as an international property hot spot and the RPGT will somewhat undermine that view.

However, he thinks that at 5 per cent, the reintroduction has been gentle and it may not significantly disrupt the market.

"In terms of opportunity, it will be a good time to buy in the secondary market from now until year-end which is where the tax will have its most direct impact," he said.

Emkay Group chief oper ating officer Peter Teh has a different take. He thinks that any sudden surge in sales in the next few months would be mainly due to a recovering property market.

He said the tax will not deter serious home buyers. "They are also not really buying now but over a few years and they will not fell the pinch as it will pass through in the next coming years."

Property developer Land & General Bhd (L&G) (3174) expects 90 per cent of units in its two commercial towers in Bandar Sri Damansara, Selangor, to be snapped up by June next year.


Dubbed "8trium", the commercial development comprises a two-storey 100,000 sq ft retail podium and 260 units of office suites contained in two blocks.

The development has a gross development value of RM160 million and makes up 90 per cent of L&G's unbilled sales.

"Tower 2, which was officially launched this July, is over 90 per cent sold. Meanwhile, 30 per cent of Tower 1, which was launched 10 days ago, has been taken up," L&G managing director Low Gay Teck told reporters after the 8trium groundbreaking ceremony yesterday.

The project is slated for completion by the first quarter of 2012.
The developer is also looking to develop another 16.18ha in Bandar Sri Damansara.

"We have submitted the necessary documents for the approval of the relevant authorities for a residential development there," said Low.

L&G is also in talks with landowners to pursue land deals in the Klang Valley, for either residential or commercial developments.

"We don't have a target landbank size, but what we look for is valuable land. Our business direction is to consider areas that are sought after," he said.

The land purchase will be financed via bank borrowings and cash reserve.

L&G also has undeveloped land in Sungai Petani and Johor.

TA Global Bhd, set to become Malaysia’s fifth biggest listed property group, plans to double the number of hotels it owns in five years, adding to a portfolio that includes the Radisson Plaza in Sydney and the Westin Melbourne.

It wants to build at least two hotels in Kuala Lumpur and make acquisitions in overseas markets from London to Canada, said Alicia Tiah, managing director and co-founder of its parent company, the Malaysian brokerage TA Enterprise Bhd.

“Definitely we want more. We want to develop our own chain. I want to buy hotels in gateway cities like London,” she said in an interview in Kuala Lumpur. “But some are not cheap, some too big, some too small, it takes time to get the right fit. I want people to show me what they have.”

TA Enterprise, whose shares have more than doubled this year, folded all its property assets into TA Global which will be listed on the Kuala Lumpur stock exchange on November 23 to tap a resurgent stock market. The FTSE Bursa Malaysia KLCI Index has gained 44 per cent so far this year.
TA Global, which now owns four hotels, is being spun off into a separate listing to realise its value and help it expand. The group spent about RM756 million (US$225 million) from December to August to buy the Westin Melbourne hotel, the Swissotel Merchant Court hotel in Singapore and the Coast Whistler Hotel in Canada, taking advantage of depressed prices during the global recession.

The acquisitions will triple hotel revenue at TA Global next year, Tiah said, without giving the current figure.

“A lot of hotels were going for below their replacement costs,” she said. “We managed to get great assets at a time when things were so gloomy.”

Good Timing

TA Global will have a market value of RM2.4 billion when it’s listed and will be ranked the fifth largest property group, HWANGDBS Vickers Research Sdn Bhd said in a September 29 report.

“The timing is quite good to list,” Tiah said. “We have accumulated great assets.”

TA Global, which has total assets valued at RM2.4 billion, has lined up more than RM6 billion of property development projects from now till 2012, said Tiah.

The company also owns the 24-story Terasen Centre, an office building in Vancouver, Canada, and Menara TA One, a 34-story office in Kuala Lumpur.

By listing the property unit, TA Enterprise will be “unlocking the hidden value” of its property assets, ECM Libra Capital Sdn Bhd said in a report yesterday.

TA Global will raise RM230 million from the share sale. It also owns offices in Kuala Lumpur and Canada. TA Enterprise will retain a 57 per cent stake after the listing, said Tiah.

“We have a good stream of income, good time, bad time, it will be there,” she said, referring to the hotels. “I love hospitality, you can up the rates,” as opposed to office buildings where rates are fixed by contracts, she said. -- Bloomberg

Property development and investment firm Low Yat Group expects to earn RM55 million in rental income from its Rivercity project over the next five years after it raises prices following a refurbishment.


Rivercity, located at Batu 3, Jalan Ipoh, in Kuala Lumpur, features eight 1- to 3-storey warehouses and shop-office blocks, built in the 1940s.

The properties are being given a RM7 million facelift, slated for completion by December, its deputy general manager for property development Leow Sian Hiong said.

After the refurbishment, Low Yat will increase rental rates to between RM4 and RM8 a sq ft from RM2 to RM4 a sq ft currently.

"We are refurbishing the properties to enhance the appeal of Jalan Ipoh and transform the area into a vibrant lifestyle hub.
"We may (further) raise rental rates after the fifth year, but it will depend on the market situation," Leow told a media briefing in Kuala Lumpur yesterday.

One of the three-storey shop-office blocks has been redeveloped into a seven-storey office building. It is home to Low Yat and Asia Pacific Land (AP Land) Bhd, which has moved out from Empire Tower in Jalan Tun Razak.

Low Yat, set up in 1947, is a substantial shareholder of AP Land, which has an integrated development worth nearly RM1 billion next to Rivercity.

Leow said the remaining seven blocks at Rivercity will comprise food and entertainment outlets, home furnishing concept stores, showrooms, beauty and wellness outlets, and electrical and electronics as well as telecommunications centres.

There will also be a 25,000 sq ft supermarket, which will boost Rivercity's current occupancy of 50 per cent to almost 90 per cent by the first quarter of next year.

Leow said Rivercity will be positioned to meet the taste and needs of the growing population of more than 300,000 families, students and business community within its 5km radius.

Meanwhile, Low Yat's development plans for next year include taking its flagship brand, Fairlane Hospitality, global.

Its real estate management firm, Fairlane Hospitality Sdn Bhd, offers hospitality services to the group's serviced residences such as Bintang Fairlane Residences in Bukit Bintang, Kuala Lumpur, and plans to expand overseas. - btimes.com.my

THE government has called for bids to upgrade Carcosa Seri Negara, a 97-year old boutique, city hotel and heritage building that was once home to Frank Swettenham, the highest ranked British representative to the Malay States.


It will be closed for renovation from January 1 2010. However, the property would will keep its name. Bids must be in by October 29 this year.

"We are inviting fresh ideas (for the property)," Nurulhakeem Hasim, the principal assistant secretary from the Property and Land Management Division of the Prime Minister's Department said in a briefing on Thursday.

The Request For Proposal (RFP) document highlighted that the proposer must bear all upgrading costs and pay a monthly rental.
The developer/operator must also propose a profit sharing deal with the government.

The government wants bids from candidates with strong financial standing, wide experience and recognition in hotel and resort management and one with a chain of hotels/resorts in Malaysia and abroad.

The applicant should own a hotel brand and have a proven administrative and management track record.

Some 17 people attended the briefing, including representatives from Swiss Garden, Impiana Group, Johor Corp, Peremba, Landmarks Bhd and MITC Ancasa Hotel Melaka.

Those present told the Business Times that they were surprised that advertisements only appeared in the Malay dailies last week.

They also lamented on the short time frame to prepare the proposal. Moreover, no financial details were given as to the past performance nor rental for the lease.

According to Nurulhakeem, renovations will be done in two phases. The first phase involves upgrading and developing the existing product while the second phase will be managing and operating the hotel.

The hotel, work on it that started in 1904, was completed in 1912. It is essentially divided into two, the seven-suite Carcosa and the six-suite Seri Negara. The two blocks sit on a 1.62ha site near Taman Tasik Perdana.

The Carcosa was originally the private residence of Frank Swettenham, the highest ranked British representative to the Malay States, while the Seri Negara was for his guests.

This designated heritage site is owned by the Government and was taken on a 20-year lease by Landmarks Bhd in 1989. This lease ends on December 31, 2009.

Landmarks operated the premises until five years ago, when General Hotel Management Group was brought in, in 2004, as a guardian for the heritage site.

Meanwhile, the period for which the hotel will be closed, will depend on the extent of work that was proposed.

The developer must propose the duration of the lease based on the return on investment anticipated after the upgrade.

An interested party said that since all the investment will come from the private sector, unlike previously when the government paid for all the renovation and refurbishment, the investment amount has to be practical.

Nurulhakeem indicated that certain terms on government's usage of the facility may be incorporated. It is however unclear, if the some 365 years of free nights available to the government will continue under the new contract.

Sunway City Bhd (SunCity) is looking at a strong recovery from the dampened sales inflicted by the global financial crisis and plans to move on with its planned property projects both locally and abroad.


According to SunCity managing director for property development Ngian Siew Siong, the local property market had not been too badly impacted by the global crisis and it should recover quite fast.

“Demand for property is a function of economic growth and, with the country’s economy expected to bounce back next year, property demand should also move in tandem with the higher market confidence,” he said.

For the fourth quarter ended June 30, SunCity’s property sales showed a strong rebound of 120% to RM88mil from RM40mil in the previous quarter.

The stronger sales were mainly due to improving consumer sentiment and the launch of the “Triple Z Series” promotion in April.

Sunway SPK Villa Manja’s semi-detached residences showed a stronger take-up with RM57mil sales during the quarter compared with RM8mil in the preceding quarter.

However, year-to-date revenue was down 16.8% to RM1.09bil compared with the previous corresponding period while earnings before interest and tax dropped 7.8% to RM331.1mil.

Property development earnings, which dropped 39.6% year-on-year due to lower sales and construction progress, were the main culprit. For the current financial year, SunCity will be changing its financial year-end from June 30 to Dec 31.

To further boost its RM743mil unbilled sales, which will provide more than a year’s earnings visibility for the company, SunCity is planning over RM1bil in new launches next year.

The projects include Sunway Velocity in Jalan Peel, Sunway-SPK townhouses, South Quay condominiums, and Sunway Damansara zero-lot bungalows.

Ngian said the company would be using its cash reserve of close to RM450mil to expand its land bank in the Klang Valley as well as in China and India. “Land prices have come off from their previous highs and we are actively looking to make some value buy.”

SunCity would also be launching its India and China projects next year.

“We have already done our homework and feasibility studies on both countries and we like what we saw there. There is a growing middle-class population and the higher purchasing power is translating into greater demand for housing,” Ngian said.

With a population of 1.3 billion in China and 1.2 billion in India, the two countries make up 40% of the world population. The sheer size and growth prospects were very attractive, he added.

For its maiden project in China, SunCity has partnered with Sunway Holdings Bhd’s subsidiary, SunwayMas Sdn Bhd, and Shanghai Guanghao Real Estate Development Group Co Ltd for a mixed high-rise development in the central business district of Jiangyin New Harbour City in Jiangsu Province.

The 39:26:35 joint venture to develop the RM492mil project will be launched in mid-2010. The Sunway Guanghou Jiangyin project will have 1,172 medium-end condominiums and some specialty shops on about 17 acres.

“We believe our maiden project in China will be our platform to secure other future property projects in this high growth country, especially in tier-two cities,” Ngian said.

In India, SunCity’s maiden project, Sunway Opus Grand in Hyderabad with a gross development value of RM1.17bil, is also targeted for launch next year.

The 35-acre project will comprise 2,423 medium-range condominiums priced from RM193 per sq ft.

Ngian said India was still a very young country as far as progress in property development was concerned, and SunCity’s expertise in project design, quality and management capability had opened up immense opportunities to play a bigger role in its property market.

Its preferred cities include Hyderabad, Bangalore and Pune. Hyderabad tops the list as its growth is fuelled by the information technology and biotech industries.

Besides a huge demand for quality housing, Grade-A commercial properties are also in short supply in India. - thestar

The outlook for the domestic construction sector looks positive in the fourth quarter, but the roll-out of major projects will likely only happen next year, analysts and industry players said.


Master Builders Association Malaysia (MBAM) president Ng Kee Leen said there was certainly greater optimism of a revival in the construction sector, thanks mainly to the Government’s stimulus packages and overall improvement in the global economy.

“We are definitely seeing more tenders and small public works jobs being dished out in recent months, but most of the bigger or mega projects are likely to be rolled out next year,” he told StarBiz recently.

The construction sector grew 1.1% in the first quarter but contracted 2.8% in the second.

“We expect the third and fourth quarter results to be positive,” he said, adding that the construction sector’s growth for the whole of 2009 could be 3%.

For 2010, Ng said “barring unforeseen circumstances, the construction sector’s gross domestic product should be better than this year’s 3% forecast, but definitely well below the highs seen in early 2000 when it was hovering around 6% to 7%.”

The construction sector remains attractive, especially since material costs such as sand, steel and cement prices have stablised, he said.

However, Ng advised construction players, especially developers in the sector, to not just build “more of the same” and expect the market to mop up whatever they build.

“Developers must be market driven to build projects that are wanted by the community,” he said, adding that there was now more interest in energy-saving buildings that embraced the green concept.

According to Ng, the construction sector’s yearly turnover was around RM60bil.

“About 50% of this turnover are from government projects and the balance from private initiated investments,” he said, adding that much of the government spending was for infrastructure development, including road works.

Ng noted that developers were also more confident of the property sector’s growth, with some unlisted ones like GSB Sentral Sdn Bhd, a member of the diversified Gapurna Group, having already started groundworks on its 348 Sentral development – a green property project with a gross development value RM1.1bil to be completed 2012.

GSB Sentral director Imran Salim said the company was very confident of the project’s success going by the 60% uptake of floor space of the building by its main tenant – Shell Malaysia.

Datuk Osman Abu Bakar, the secretary-general of the Malay Contractors Association which represents some 7,000 bumiputra contractors, said many of the projects dished out so far by the Government were for smaller projects.

“There are more tenders and small construction projects out these days and our members have benefited from these projects as our members are mostly Class F contractors,” he said.

A member of the Indian Contractors’ Association said he had benefited from the Government’s simulus packages.

“Most of the contracts we’ve secured are small roadworks projects. However, our company has not derived any benefits or jobs from mega projects,” he said.

A construction analyst with OSK Research concurred that the construction sector was on the road to recovery and that players in the market, from developers and contractors to real estate agents, were definitely more optimistic of the sector’s growth going forward.

“There are more property launches by developers and more tenders this third and fourth quarters. This is a good sign. But many contractors are waiting for more mega projects to be rolled out, which we suspect will occur next year,” he said.

The billion-ringgit projects that are likely to be rolled out or have been confirmed include the RM9bil Pahang-Selangor interstate raw water transfer project, the RM7bil Kelana Jaya and Ampang light rail transit line extension works and the construction of the low-cost terminal, according to the OSK analyst.

A construction analyst from another brokerage said that while there were early signs that the construction sector was recovering, the rollout pace of major projects remained slow.

“Also, now that the global economy appears to be on the mend, we wonder if the mega projects proposed when the economy was in a downturn will be implemented,” the analyst said.

“Granted mega projects implemented can help boost significantly the construction sector, but government funds on smaller infrastructure projects such as those in east Malaysia can also have significant impact on the overall health and resilience of the Malaysian economy, besides the construction sector, over a longer term.” - thestar.com

TA Global Bhd, the property arm of TA Enterprise Bhd, hopes to acquire hotels in London and Vancouver within the current financial year ending Jan 31, 2010.

TA Enterprise executive chairman Datuk Tony Tiah Thee Kian said the company had always been on a lookout for good opportunities and “now is a good time to look at acquisitions”.


“We are looking at hotels in London. It may be a good fit for us. We are also looking at a hotel in Vancouver, by either building one ourselves or on a joint-venture basis,” he told reporters after the company EGM yesterday.

“The criteria is, it should be cheap, well-located and give us a stable income flow. Those with a RM600mil price range are good for the company,” he said.

He added that TA Enterprise only made acquisitions during recessionary periods.

TA Global is slated for a listing on Nov 30. After the listing, TA Enterprise will have a 57.3% stake in TA Global.

According to chief executive officer Datin Alicia Tiah, TA Enterprise’s cash position after the listing of TA Global would be RM230mil, provided all the offer shares were fully subscribed.

“We can do more things with the fund, like nurture start-ups and beef up our corporate finance. These are areas we want to strengthen (our position in),” she said.

On the outlook for TA Enterprise, she said it would depend on the performance of the stock market.

“If the market is rosy, our profits will go up.

“Hong Kong is also giving us a good return on brokerage income, given its proximity to (mainland) China,” she said. --thestar.com.my

TRADEWINDS Corp Bhd (4804) expects property development to start contributing significantly to its revenue sometime between 2011 and 2012, its top official said.

The group undertook a restructuring exercise in 2008 to focus on hotel and property development.

The contributions are expected to come in once projects which are now on the drawing board are launched from 2010 onwards.

In 2008, Tradewinds' property division, including rental income from Komplex Antarabangsa and Menara Tun Razak, made RM24.51 million representing 5.2 per cent of total revenue.
"We expect to launch projects in 2010 that will see revenue coming in in 2011 or 2012," TCB's chief executive officer Shaharul Farez Hassan said.

"And we expect property development to overtake hotel contributions (in terms of revenue) in four to five years' time," he added.

Hotel operations now contribute 70 per cent of total group revenue.

In a recent interview with Business Times, Shaharul said given that it was only beginning to establish itself as a property developer it will take sometime for the segment to mature and make a mark.

TCB now has 365ha of land in Nusajaya in Johor for development. TCB plans to form tie-ups with established property developers to launch its housing projects.

It has already entered into a 49-51 per cent joint venture agreement with United Malayan Land Bhd (UM Land) holding the majority share, to develop land in Nusajaya.

At the same time, it is also looking for land within the Klang Valley and Penang to buy or enter into joint-venture pacts for property development projects.

Previously, TCB's venture into property development has been by roping in a developer to develop land that it owns.

These projects include Bandar Baru Pulai in Johor and Bandar Jaya Putra in Mount Austin, Johor.

In the half year ended June 30 2008, property division contributed RM13.6 million in revenue.

TCB in 2008 split its plantation and sugar refining business from the group to focus on its hotel and property operations.

HOTELIER and property developer Tradewinds Corp Bhd (TCB) (4804) is setting its eyes on hotel acquisitions abroad, as this provides better and speedier returns on investments.

It has been looking at several proposals which it has received from around the region.


"We have been approached by various parties, but we are not actively pursuing any of these at the moment, neither are we saying no to these proposals," chief executive officer Shaharul Farez Hassan told Business Times.

He added that he sees Southeast Asia as a suitable location for its foreign venture.
"Hotels in other countries fare better in terms of room rates," he said.

With the exception of Langkawi, Malaysian hotels in general rake in lower average room rates compared to their counterparts elsewhere.

TCB's previous foreign hotel initiatives were in Vietnam and Sarajevo, Bosnia Herzegovina. It sold its partially completed hotel in Hanoi, The InterContinental Westlake hotel, two years ago for US$75 million (RM261 million). This gave TCB a one time net gain of RM148.5 million.

Tradewinds had also previously won a bid for a hotel in Sarajevo, but pulled out after due diligence was conducted.

Meanwhile, Shaharul expects its hotel division revenue to dip by between 10 per cent and 13 per cent in the year ending December 31 2009, as the global economic crisis and the H1N1 flu sees people travelling far less.

Last year, the division chalked up RM332.74 million, which accounted for 70 per cent of its total revenue of RM475.46 million.

In the first half ended June 30 2009, TCB made a net profit of RM13.12 million on the back of RM223.63 million. Sixty four per cent of the revenue was from its hotel division.

This year, its worst hit hotel has been Hotel Istana Kuala Lumpur. Business is down by about 10 per cent compared to last year. Nevertheless, all hotels are profitable.

The best performing hotel in terms of room rates is the five star Meritus Pelangi Beach Resort & Spa, Langkawi which it owns but is operated by Singapore Meritus International Hotels Pte Ltd.

Other hotels owned and operated by the group include Mutiara Taman Negara, Pahang and Mutiara Johor Baru.

Hotels owned by TCB but operated by an international chain include Crowne Plaza Mutiara Kuala Lumpur, Hilton Batang Ai Longhouse Resort, Sarawak, Hilton Kuching and Hilton Petaling Jaya.

TCB also manages the Mutiara Burau Bay Beach Resort, Langkawi for the Langkawi Development Authority.