Pine Properties, MJR Investment sign shareholders’ agreement for land development in IOI Resort City

PETALING JAYA (Jan 31): Pine Properties Sdn Bhd, a 99.8%-owned subsidiary of IOI Properties Group Bhd, has signed a shareholders’ agreement with MJR Investment Pte Ltd on Jan 26.

In a statement, IOI Properties said the signing of the shareholders’ agreement marks a significant milestone towards participation in developing a 9.6-acre freehold land in IOI Resort City, Putrajaya to build 676 condominium units.

IOI Resort City is an integrated development crafted by IOI Properties which comprises Puteri Palma Condo, green building index-certified IOI City Towers, Putrajaya Marriott, Le Meridien Putrajaya, IOI City Mall and an 18-hole championship golf course, Palm Garden Golf Club.

Following the signing of the shareholders’ agreement, Pine Properties will dispose 45% of its existing equity stake in Pine MJR Development Sdn Bhd to MJR Investment.

The parties will, subsequently, upon obtaining the relevant approvals increase Pine MJR’s paid-up capital through the subscription of ordinary shares and redeemable non-cumulative preference shares.



Hua Yang’s Meritus Residensi achieves 34% take-up rate during official launch

PETALING JAYA (Jan 31): Hua Yang Bhd’s maiden project in Penang, Meritus Residensi, has recorded a 34% take-up rate as of today since the project’s introduction last November, said the developer in a statement.

“We are heartened that our inaugural project here has been well-received, and this encourages us to further commit resources in developing affordable projects in Penang.

“One way to do this is to ensure we continuously engage with Penangites and this is only possible if we are present here on a permanent basis,” said Hua Yang assistant general manager Tony Ng at the official launch of Meritus Residensi in conjunction with Hua Yang’s Chinese New Year celebration.

The developer expects Meritus Residensi’s take-up rate to exceed 50% by the end of March.

The 4.32-acre Meritus Residensi comprises 480 units of serviced apartments with a built-up of 945 sq ft onwards and 15 retail shops with an estimated gross development value (GDV) of RM220 million.

Meritus Residensi is the first phase of a 6.98-acre freehold development along Jalan Baru, Seberang Perai, Penang. The estimated GDV of the overall development is RM324 million. price of Meritus Residensi starts from RM364,500 and the project is slated for completion by 2020.

Currently, Hua Yang has a total undeveloped landbank of 335 acres in the northern region with a potential GDV of RM1.9 billion.


EcoWorld seeks shareholders’ approval for RM875 mil land buy in Penang

KUALA LUMPUR (Jan 31): Eco World Development Group Bhd has despatched a circular to its shareholders, seeking their approval for its proposed acquisition of two parcels of land in Batu Kawan, Penang for RM875.24 million.

Shareholders are scheduled to vote on the acquisition of the land measuring a total of 374.56 acres (151.58 hectares), at an extraordinary general meeting on Feb 14.

The property developer had announced the acquisition on June 29 last year. On Jan 23, Eco World said it is teaming up with the Employees Provident Fund (EPF) as its joint venture partner and co-investor in developing the land. EcoWorld will sell a 40% stake in the project to EPF.

Batu Kawan, according to EcoWorld, is slated to become Penang’s third satellite town after Bayan Lepas and Seberang Jaya.

In the circular to its shareholders, EcoWorld said the purchase price for the two parcels of land was done in a “willing-buyer willing-seller” basis.

This, it said, was after taking into consideration the prospects of the lands in view of its strategic location and close proximity to the Second Penang Bridge, which connects Bandar Cassia with Batu Maung on Penang island and potential developments in the future, worth an estimated RM7.76 billion. —


Hua Yang expects northern projects to contribute up to 30% of FY18 revenue

BUTTERWORTH (Jan 31): Property developer Hua Yang Bhd expects its northern region projects to contribute up to 30% to its revenue for its year ending March 31, 2018 (FY18).
“We hope to generate a sales revenue of up to RM100 million for FY17 from our projects in the northern region, including two developments in Seri Iskandar, Perak,” said the group’s assistant general manager Tony Ng.
Its maiden project in Penang, the Meritus Residensi in Prai, is projected to generate a sales revenue of RM40 million to RM50 million in FY17, and up to RM100 million in FY18, he added.
Speaking to reporters at the launch of the RM220 million gross development value (GDV) project, Ng said it has seen a 34% take-up rate, made up mostly of first-time homebuyers, since the soft launch earlier this year. He expects the rate to rise to 50% by end of March.
Meritus Residensi features 480 serviced apartment units and 15 retails shops on a 1.7 hectare (ha) land. It is part of an overall 2.8-ha mixed development freehold project, with a GDV of RM324 million.
The units, priced from RM364,500 onwards, are expected to be completed by 2020. 
Elsewhere in the north, the Seri Iskandar project, featuring mixed developments and townships, has a GDV of RM1.2 billion. It began in 2002 and is 50% complete.
Hua Yang has built RM3.7 billion worth of properties since 1978, with a focus on the affordable home segment, whereby units are priced below RM500,000.
Asked if the group would be affected by the revision of the moratorium period for the 1Malaysia People’s Housing Programme (PR1MA) from 10 years to five years, Ng replied:
“No, because Hua Yang is a private-driven developer. Our buyers are different from those who are keen on PR1MA. Ours is a free market catering to those who want to invest [in] a freehold property.
“PR1MA housing involves the buyers’ eligibility which is more stringent. That is a rakyat-based market while our criteria is less strict. It is different,” he said.
He was asked to respond to a recent note from RHB Research Institute stating that the relaxation of the PR1MA policy would have a negative effect on Hua Yang.
“This is as the company is in the affordable housing and high-rise segment in the Klang Valley, with the property prices of around RM500,000. The new policies may pose a threat to Hua Yang, as the government has cut the moratorium period for PR1MA housing to five years, from 10 years,” RHB had said. 
Hua Yang has an undeveloped land bank of 135.6ha in the northern region, with 8.5ha in Penang, with a potential GDV of RM1.9 billion spanning six years.
“We are aggressively looking for land and want to expand further in this region, as we see it fits in with our business model,” Ng said.
On Jan 25, Hua Yang acquired a 10.86% stake in Magna Prima Bhd for RM66.6 million via an off-market direct business transaction, as part of its objective to invest in strategic land banks.
Hua Yang’s net profit for its third quarter ended Dec 31, 2016 (3QFY17) declined 65.5% to RM10.42 million or 2.96 sen a share, from RM30.16 million or 8.57 sen a share a year ago.
Revenue dropped 52.3% to RM73.95 million, from RM154.98 million, due to lower sales revenue.
The group has declared a second interim dividend of two sen per share for FY17. —


Knight Frank: Catalytic projects needed to boost Kota Kinabalu property market

Kota Kinabalu

PETALING JAYA (Jan 31): The property market in Kota Kinabalu is expected to remain flat in 2017 due to multiple uncertainties, said Knight Frank Malaysia in its “Real Estate Highlights 2H2016” report.

According to the latest Napic Property Market Report for the first half of 2016 (1H2016), Sabah registered 3,155 transactions with a total value of RM1.52 billion, a decrease of 27% and 31% in volume and value, respectively, against 1H2015.

“Based on the current economic conditions, weak property market sentiment and influx of new supply, experts are not anticipating a recovery in the immediate future,” said the property consultancy firm.

It said catalytic projects are needed to spur growth and investments. Spearheading these will be infrastructure improvements such as the Bus Rapid Transit, the Pan Borneo Highway and the proposed Light Rail Transit.

“With the commencement of these infrastructure improvements, it is likely that there will be fresh injection of interest and added development impetus in Kota Kinabalu.”

For now, a further softening and consolidation of the residential property sector is expected with the increasing supply and poorer take-up, particularly in the high-rise residential segment.

According to data from Napic, the total supply of condominiums/apartments in Kota Kinabalu is about 19,998 units as of 2Q2016, an increase of 2,893 units from end-2015. In terms of future supply, there will be a major influx of high-rise residential units into the market with about 15,237 units in the pipeline.

Looking forward, the total number of high-rise residential units may surpass its landed counterpart in the near future.

“The region will take time to digest the existing and incoming high-rise residential supply.

“However, prices of residential properties in good locations are expected to hold. There is also rising demand for affordable homes because the market is dense with first-time homebuyers,” the report stated.

Meanwhile, the commercial office sector may face pressure in terms of occupancy in early 2017 with the completion of new purpose-built offices around the CBD fringes.

In the retail sector, shopping centres may face challenges due to the decrease in consumer spending.

However, Knight Frank believes that the tourism sector in Sabah will pick up pace and will help to stabilise retail spending.


CapitaLand Retail China Trust raised to ‘buy’ by DBS on overdone fears

SINGAPORE (Jan 31): DBS Group Research has upgraded CapitaLand Retail China Trust (CRCT) to “buy” from “hold” with S$1.60 (RM5.00) as it believes the stock is oversold following the recent price correction.

“While CRCT will face headwinds in the form of a weaker average RMB exchange rate, impact from higher property taxes in Beijing and an increase in interest rates over the next few quarters, we believe these risks have largely been priced in,” says analyst Mervin Song in a recent report.

Song says the potential of CRCT’s malls has not been maximised as several properties are still ramping up or in a transition phase. These include Grand Canyon which is generating an annualised net property income (NPI) yield of about 5.3% versus target range of 7-8%; Minzhongleyuan and Wuhu which are incurring losses due to nearby road closures and repositioning works respectively, and the recently announced acquisition of Galleria mall whose margins are sub-optimal owing to previous management by third-party operators.

Then there is possible upside from acquisitions, adds Song. After the acquisition of Galleria mall, CRCT’s gearing is stabilised at around 37% but will still be below the 45% limit imposed by MAS. CRCT also has some debt headroom to leverage on increasing acquisition opportunities.

“Our understanding is that price expectations from potential sellers are now lower and some retail mall operators are looking to exit the sector given challengers in managing a retail asset,” says Song.

“We maintain our DCF-based TP of S$1.60. At current levels, CRCT offers 13% capital upside and an attractive 7.2% yield,” adds the analyst.

Units of CRCT are up 1 Singapore cent at S$1.42. —


‘Slow but steady’ take-up for KIP’s 8scape Residences in Johor

8scape Residences

KUALA LUMPUR (Jan 31): Kepong Industrial Park Group, better known as KIP Group has seen 80% of the non-bumi units at its 8scape Residences development in Taman Sutera, Johor Bahru sold.

Launched in 2014, the condominium project is located in between two established townships in Johor Bahru — Taman Sutera and Taman Perling. 8scape has a gross development value (GDV) of RM822 million.

The 9.2-acre development offers 1,255 condominium units housed in four towers with built-up sizes ranging from 808 sq ft to 1,654 sq ft (for dual-key units). The selling price averages about RM550 psf, with minimum price from RM450,000.

“Construction has reached 35%. We believe once construction reaches 60%, all the units will be snapped up as most people will feel more confident when they see the physical building,” KIP Group director Valerie Ong told

She said sales is at a “slow but steady pace” considering the current dampened market sentiment. However, she believes local homebuyers are warming up to high-rise living.

Valerie Ong“Taman Perling and Taman Sutera are both mature townships with affluent communities, like Bandar Utama in Petaling Jaya. Most residential developments here are landed homes such as terraced houses and semi-dees, but we have observed that there has been an increase in demand for high-rise residential properties,” she explained.

Ong felt that high-rise living will be the future trend for mature townships in Johor Bahru as development land becomes scarcer in these areas. She also believed that local residents are also being influenced by Singapore’s high-rise living culture besides their emphasis on security needs.

8scape is about 15km away from the Johor Causeway which is linked to Woodlands, Singapore, and 25km away from the Second Link connecting Tuas, Singapore.

8scape is located within the vicinity of zone A in Iskandar Malaysia, which is also a part of Johor Bahru city centre.

The project boasts various facilities spread over five acres including three swimming pools, clubhouse with multipurpose hall, jogging path, a tennis court, five gardens, yoga zone and viewing deck.

KIP Group has established its brand name in Johor Bahru 15 years ago with KiP Marts in Tampoi, Kota Tinggi and Masai in Johor Bahru. The company’s other residential developments in Johor Bahru include KIPARK Apartment Suites, Sri Akasia Apartment, Sri Kenari Apartment and Sri Wangi Apartment in Taman Tampoi Indah.