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MONTH: OCTOBER 2012 ISSUE NO: 10/2012 Property News PA International Property Consultants is a registered real estate firm committed to providing a comprehensive range of property solutions to meet the needs of investors, occupiers and developers. The Research Division provides core real estate information to clients and internal departments in order to ensure accurate real estate decision-making. Our research team has completed market studies and research work for various ongoing development schemes within Klang Valley, providing comprehensive economic analysis, property PA INTERNATIONAL market information, forecasts and consulting advice based PROPERTY CONSULTANTS (KL) SDN BHD on reliable sources. Phone: 03- 7958 5933 Fax: 03-7957 5933 We constantly strive to present the most up-to-date Website: http://www.pa.com.my market knowledge in order to ensure clients are well- Email: [email protected] armed with sufficient data to make the right property decisions. Issue No. 10: 1 - 31 October 2012 GENERAL ECONOMIC & PROPERTY MARKET 1. Naza TTDI, lend lease join hands to develop RM4 billion GDV of mixed development (The Edge, 02- October-2012) . Naza TTDI and Australia’s lend Lease will join hands to develop a 4.376-hectare of land into a mixed development with a gross development value of RM4 billion. In a statement, the property arm of Naza Group of companies said the development, which would be at its KL Metropolis flagship development, would comprise a regional retail centre, office, hotel and residences. Based in Australia, Lend Lease is a fully integrated international property and infrastructure group. Naza TTDI Deputy Executive Chairman and Group Managing Director SM Faliq SM Nasimuddin said the GEN collaboration augured well for the company’s aspiration and vision to position KL Metropolis as Kuala Lumpur’s international trade and exhibition district. E . This is where a hub for retail and commercial activities, as well as, residences would be created to RAL complement the new Matrade Exhibition centre that was expected to take shape in 2015, he said. He added, the collaboration would bring together the resources and experience of both parties in their ECONOMIC & PROPERTY MARKET respective areas of expertise and hoped to see the realization of the joint venture by year-end. With a gross development value of RM15 billion, KL Metropolis is Naza TTDI’s 30.2-hectare project that is poised to propel the country as a preferred meetings, incentives, conventions and exhibitions (MICE) destination in the region. 2. Glomac optimistic about hitting another year of record sales at RM800 million (The Star, 08- October-2012) . Glomac Bhd is optimistic about achieving another financial year of record-breaking new property sales. For its financial year ended April 30, 2012, the property developer had chalked up record sales of RM663 million. Glomac has a pipeline of future projects with a total gross development value (GDV) of RM7 billion, out of which RM1.13 billion is targeted to be launched in financial year 2013. Glomac Group Managing Director and Chief Executive Officer Datuk FD Iskandar said usually the company hit 80% - 85% (sales of new property launches) and thus, is expected to have at least RM800 million of sales in financial year 2013. He added that Glomac is on track to achieve its target as it had achieved new sales of RM212 million for its first quarter ended July 31, 2012. Key drivers for the group’s sales in financial year 2013 will be Lakeside Residences in Puchong, Phase 4 of Plaza Kelana Jaya, and the townships of Bandar Saujana Utama and Saujana Rawang. It should be noted that for 2012, Glomac had posted record revenue of RM652.4 million (increase of 9.2% year-on-year) and net profit of RM85.2 million (increase of 35.2% year- on-year), which was mainly due to key projects such as Glomac Damansara and Glomac Cyberjaya 2, as well as the final billings from the completed Glomac Tower. There are also plans for residential development over 200 acres in Sungai Buloh, which is next to the group’s Bandar Saujana Utama development, and 191 acres in Dengkil, Sepang, to tap demand from middle-income home buyers. Both parcels are expected to have a GDV of RM800 million each. Our philosophy is simple: A unique combination of People, Intellectual Property, Relationships, Services and Commitment 1 Issue No. 10: 1 - 31 October 2012 . It was also noted that the recent launch of 105 units of 2-storey terraced houses with a GDV of RM75 million at the group’s Lakeside Residences development in Puchong, Selangor was fully sold through balloting. Lakeside Residences is a mixed development with a GDV of RM2 billion, and there are plans for about 6,000 residential units to be launched within the next 6 years. About 20% of the units will be landed homes, with the balance being high-rise units. 3. Naim targets RM3bil REIT with ‘mini KLCC’ project (The Star, 13-October-2012) . Naim Holdings Bhd is the latest property group to express ambitions of having its own real estate investment trust (REIT), with a target size of RM3 billion. The plans, though, are in early stages, but will include new developments such as its mini KLCC project, which has yet to be named, at the old Bintulu Airport, that carries a gross development value (GDV) of some RM2billion. GEN . This puts the Sarawak-based Naim Holdings, which also has a significant construction arm, in the same category of companies such as TA Global Bhd and KLCC Property Holdings Berhad, which has in recent E times expressed interest in forming their own REITs. ECONOMICRAL & PROPERTY MARKET . Both property and construction arms contribute equally to the company revenue. Senior Director for Corporate Services Ricky Kho said, the company planned to launch the REIT in six to nine years, when its property assets had reached a sufficient size. It is the company’s long-term plan to generate recurring income and gain in property value. He said, adding that the REIT would allow the company to manage the tenant mix of its commercial property units to maintain the dynamic and vibrancy of the entire development. If all goes as planned, Naim Holdings’ REIT will be the first Sarawakian REIT. The properties that will be injected into the proposed REIT include Naim Holdings’ completed two storey Miri Permy Mall. The remaining REIT properties that have yet to be completed are the development of the old Bintulu Airport, a mixed-development in Batu Lintang in Kuching, Pantai Piasau Residences and Piasau Camp in Miri. Permy Mall’s occupancy rate is 94% and it is expected to generate rental income of RM8 million per annum. It is already giving us a return of 12% on rental income, Kho said. The total development cost, including land and building for the Permy Mall, stands at RM52 million. As at 31st December 2011, the estimated fair value for the building and land was RM85 million and RM3.6 million respectively. Naim Holdings aim to develop a mini KLCC at the old Bintulu Airport situated in the New Bintulu City Centre, with a GDV of RM2 billion. It will consist of shopping complex, condominiums, SOHO (small office home office) units and hotels, Kho said. The whole project will take about 10 to 15 years to be fully complete. The company will launch the shopping complex worth about RM400 million early next year. Naim Holdings will be developing a 34-acre site in Batu Lintang, Kuching, for a mixed development with a GDV of RM1.8 billion spread over 20 years. The company will build the residential segment by the end of 2013. The company has a landbank of about 2,620 acres with an estimated GDV of RM9.5 billion. He mentioned that the company was still looking to increase its landbank in the Samaluju area in Bintulu. The Sarawak-based company has about RM1.3 billion in its construction orderbook, which is mainly for infrastructural work in the Sarawak Corridor of Renewable energy (Score). Score is one of the five regional development corridors initiated by the Federal and Sarawak state government to develop and transform Sarawak into a developed state by 2030. Our philosophy is simple: A unique combination of People, Intellectual Property, Relationships, Services and Commitment 2 Issue No. 10: 1 - 31 October 2012 . The corridor will encourage investments in power generation via energy resources like hydro-power, coal and natural gas, which have been found in Sarawak’s central region. The company was recently awarded a RM208.2 million contract via its wholly-owned subsidiary, Naim Engineering Sdn Bhd, for one of the work packages under the Klang Valley Rapid Transit project in Kuala Lumpur. 4. Exclusive Ken Holdings to develop land near Genting (The Edge, 15-October-2012) . Ken Holdings Bhd plans to build a mixed development property spanning 5 acres atop the popular highlands gateway. According to the Ken Holdings Bhd’s Executive Chairman Datuk Kenny BK Tan, there are a lot of facilities in Genting but not many condominium or apartments. Plans are on the drawing board for a mixed development commercial land near the casino. GEN . He added that the company will be submitting plans to relevant authorities for the 5-acre land that is situated close to the bus station. E . Currently, Ken Holdings has close to 20-acre of land in the Genting vicinity and a 10-acre plot in Melaka City ECONOMICRAL & PROPERTY MARKET Centre. According to Tan, Ken Holdings is exploring opportunities in Melaka and Kelantan. However, they are still considering the Melaka project due to its unfavorable conditions. Furthermore, the land will be sold if the conditions are not supportive.