Wednesday, November 18, 2015

MRCB looking at funding options; may dispose off stake in EDL Expressway

By Sharen Kaur

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) may hive off some of its assets, including its stake in the Eastern Dispersal Link (EDL) Expressway in Johor, as it looks for another source of funding next year.
The concession is worth more than RM1.2 billion and selling its stake will help MRCB partially finance the new jobs that it secured recently in the Greater Kuala Lumpur/Klang Valley. These include a RM1.63 billion job to regenerate the Bukit Jalil National Sports Complex (to be called KL Sports City), a joint venture with Cyberview Sdn Bhd to develop the Cyberjaya City Centre (CCC), which is expected to generate RM11 billion in gross development value, and a RM3.1 billion contract to develop Kwasa Utama in Sungai Buloh.
MIDF equity research head Syed Muhammed Kifni said apart from equity placement or rights issue, another source of funding might come from the disposal of the EDL Expressway stake.
MRCB executive director Imran Salim told Business Times it was eyeing several funding options. “We are also looking at a development fund for some of the bigger projects, especially CCC. We don’t want to borrow from banks as we are seeking to lower our debt. We aim to be a stronger company, financially.” MRCB told Bursa Malaysia on Monday it planned to raise gross proceeds of up to RM612.1 million via a proposed private placement of up to 20 per cent of its issued and paid-up capital, at an indicative price of RM1.24.
The primary objective of the exercise is to increase its Bumiputera shareholding to a minimum of 35 per cent from 28 per cent currently. This is a key requirement for MRCB to be a Bumiputera-controlled public-listed company, for which it had already received approval in principle.
Gapurna Sdn Bhd, the developer of Petaling Jaya Sentral with assets worth more than RM8 billion, has indicated that it may subscribe up to 120 million placement shares. The company is controlled by MRCB group managing director Tan Sri Mohamad Salim Fateh Din and his wife, Puan Sri Yasmin Mohamed Ashraff. Gapurna is the second-largest shareholder of MRCB, with a 16.7 per cent stake. The other major shareholders of MRCB are the Employees Provident Fund (38.4 per cent) and Tabung Haji (10.1 per cent). From the proceeds, MRCB will allocate RM371.5 million for property development activities, RM142.77 million for general working capital and RM85 million to repay borrowings.
As of October 30, MRCB’s borrowings stood at RM3.69 billion with gearing at 1.83 times. The repayment of borrowings will reduce its debt to RM3.6 billion and gearing to 0.88 times.
The stock fell six sen to close at RM1.36 yesterday, with 8.51 million shares traded. Syed Muhammed said the debt/equity level of the company was relatively higher in comparison to its peers. “That arguably may be the reason why MRCB seems hesitant to incur more borrowings, which we reckon is the right and prudent course to follow. We, too, reckon there is going to be more fundraising exercises to finance the Bukit Jalil regeneration and CCC projects.”
 MIDF is maintaining MRCB’s target price at RM1.70. It believes that the current share price has yet to fully reflect MRCB’s fundamentals.
 AmResearch analyst Mak Hoy Ken said MRCB had a few options to strengthen its balance sheet, including recycling the capital locked up in its investment properties into its 31 per cent-owned MRCB Quill REIT.
 “In addition to the earlier monetisation of its non-core assets, such as the disposal of Duta-Ulu Klang Expressway, it may explore the creation of private property funds with select institutional investors to co-finance its development projects.
“Recycling of capital in the context of monetising its prime investment properties in KL Sentral into its real-estate investment trust (REIT) will help deleverage its balance sheet. This includes the earlier injection of Platinum Sentral into MRCB Quill REIT,” he said.
Mak believes investor attention would now gravitate towards how MRCB monetises its assets, following the recent slew of net asset value (NAV) accretive deals that was announced.
 “This will help narrow the discount the stock trades viz-a-viz its NAV,” he said.

Monday, November 16, 2015

Transforming PJ's skyline

By Sharen Kaur

KUALA LUMPUR: THE conversion of land use from industrial to commercial at Section 13 in Petaling Jaya, Selangor, has resulted in a boom and bust of mixed-used developments, which are spurring economic activities.
 
  Initially an industrial enclave, the change in Section 13 over the years is aimed at creating a vibrant and sustainable neighbourhood.
 
  According to the Petaling Jaya City Council Special Area Plan for Section 13, the area covers 101.96ha and its pioneer developments include the integrated development Jaya33 and office development Plaza33 by Jaya33 Sdn Bhd, as well as Tetap Tiara Sdn Bhd's Jaya One.
 
  Recently completed projects included the 85-bed Columbia Asia Hospital and Inspiration Group's RM500 million integrated development called CentreStage.
 
  There are several ongoing and pipeline developments with gross development value (GDV) exceeding RM8 billion. These include Pacific Star by Island Circle Development Sdn Bhd and PJ Midtown by IOI Properties Group Bhd and Sime Darby Brunsfield Holding Sdn Bhd.
 
  Paramount Property Development Sdn Bhd is looking to develop a project with a GDV of RM730 million next to Sin Chew Media Corp Bhd in Jalan Universiti. It will comprise four office towers, two residential towers and 78,000 sq ft of retail space.
 
  Another development in the pipeline is Fraser Square, which is being undertaken by a joint-venture entity between Fraser & Neave Holdings Bhd (F&N) and its sister company, Singapore-based Frasers Centrepoint Ltd (FCL).
 
  Construction on the project is expected to start in 2017.
 
  The FCL group is a prominent property developer with impressive track records in Singapore, China, Australia, New Zealand, Thailand and the United Kingdom.
 
  In 2013, the joint-venture company obtained approval for its Master Development Plan and went on to enhance the project's design by drawing upon FCL's expertise.
 
  Despite obtaining building approval, the launch of Fraser Square had been postponed due to weak market sentiment.
 
  F&N chief executive officer Lim Yew Hoe said recently that the company expects to make an update on the development by the middle of next year.
 
  "We are taking advantage of the softening market to look at a more suitable concept for the land with our development partner. The last concept was concluded more than three years ago, so it is a blessing in disguise as we will be building based on current market trends. Once we agree on a new concept, we hope to implement everything as soon as possible and announce something in the next six months," Lim said.
 
  Fraser Square is expected to change the Section 13 skyline upon its completion as it will feature a 50-storey corporate office tower.
 
  The project is also expected to woo investors and property buyers because of its location, product offering and F&N's reputation.
 
  Although F&N is a food and beverage company, it has undertaken a few projects in the past. Its first foray was turning its former factory land at Jalan Foss into a vibrant commercial spot called the Fraser Business Park.
 
  Fraser Square will sit on a 5.15ha site in Section 13 that formerly housed F&N Dairies Malaysia's manufacturing plant.
 
  The project has been earmarked for an integrated residential and commercial development encompassing three 32-storey serviced apartment blocks with about 900 units, a 50-storey corporate office tower, a four- or five-star hotel with 16 floors, and a SoHo (small-office-home-office) building.
 
  Based on the current plan, Fraser Square is expected to generate a GDV of RM2 billion, but this may increase as the product offering for the project is still being finalised, said F&N chief financial officer Soon Wing Chong.
 
  The serviced apartments would offer units of various types and sizes to meet the needs of a wide range of buyers - families, individuals or businesses.
 
  The SoHo units will measure less than 500 sq ft, Soon told Property Times.
 
  On product pricing, he said the joint venture company was still finalising it.
 
  It was reported that F&N postponed Fraser Square over concerns that it might not get its asking price, said to be as much as RM1,200 per sq ft (psf), for Trilight Residences - the three serviced apartment blocks.
 
  F&N had planned to launch Trilight Residences - Phase 1 of the Fraser Square project - with a total GDV of RM600 million last April.
 
  Sources said F&N may re-look at the launch price and it could start from RM850 psf to RM1,100 psf.
 
  Early this year, Island Circle Development sold its three-bedroom 988 sq ft serviced suites from RM914,000, or RM925 psf, while IOI Properties and Sime Darby Brunsfield sold theirs at RM850 psf.
 
  "The timing and pricing for the Phase 1 launch will depend on market sentiment. We have cleared the site... when we finally decide to launch, it will happen quite fast.
 
  "We are still fine-tuning the concept and re-looking the product offerings. We believe there is an opportunity for a premium hotel in Petaling Jaya and have yet to decide whether it would be a four- or five-star property.
 
  "There will be a neighbourhood mall for Fraser Square. It would be something like Bangsar Village in Bangsar Baru. We have the building approvals in place.
 
  "Next is the case of alteration to the plan. We will re-submit the approvals as there will be changes to the plan," said Soon.

'DMIA ready to call for tenders for KVDT sub-contract jobs'

By Sharen Kaur

KUALA LUMPUR: DMIA Sdn Bhd has won a RM1.4 billion contract from the Transport Ministry to upgrade the Klang Valley double-tracking (KVDT) system for Keretapi Tanah Melayu Bhd (KTMB).
 
  The job was awarded about two months ago under direct negotiations with the ministry.
 
  DMIA had been lobbying for the project for more than three years.
 
  The contract entails the upgrading of systems work between Rawang and Seremban, and from Sentul to Port Klang, involving about 150km, which is expected to cost around RM750 million.
 
  The remaining sum is for the upgrading of tracks between Rawang and Salak South near Bandar Malaysia.
 
  The KVDT was built in the 1990s by Indian Railway Construction and is running on old technology. The upgrading of the railway line is important as it offers an alternative and affordable mode of transport for commuters.
 
  People close to DMIA said the company was preparing to call for tenders soon  for sub-contract works for the project.
 
  "This is a project fully-funded by the government. Any cost overrun will have to be borne by DMIA. The company  is calling for tenders and will award the sub-contracts to suitable parties," said a source.
 
  DMIA will receive progressive payments from the government for the duration of the project.
 
  The source said DMIA was targeting to maintain cost at between RM950 million and RM1 billion and keep profit margin at 25 per cent.
 
  There is market talk that DMIA may rope in international expertise in the likes of Ansaldo, Siemens, Alstom, Thales Group and Bombardier for the systems work to spread out the risk.
 
  "The only problem with international expertise is that cost may rise over time because of currency fluctuations. It also means that there will be less local participation," said the source.
 
  The controlling shareholder of DMIA is Datuk Subramaniam Pillai, a low-profile businessman.
 
  DMIA had previously partnered Malaysian Resources Corp Bhd for the beautification and upgrading works of Little India in Jalan Tun Sambanthan, Brickfields, here, as well as other development projects in the area.

Real estate growth picks up speed

By Sharen Kaur

KUALA LUMPUR: REAL estate activities are expected to accelerate in the Northern Corridor Economic Region (NCER), spurred by the development of industrial areas such as Chuping Valley, Kedah Science and Technology Park (KSTP) and Rubber City, as well as the development of Greater Kamunting.
 
  The NCER, comprising Kedah, Perlis, Penang and northern Perak, is the focus for tourism, commercial agriculture and manufacturing industries.
 
  The Northern Corridor Implementation Authority (NCIA) is responsible for providing directions and devising policies and strategies in relation to socio-economic development in NCER, which encompasses 21 districts.
 
  Programmes and initiatives undertaken by NCIA are driving developers in the region to ramp up their product launches and drawing in new players with real estate plans.
 
  Currently, there are more than 100 small, medium and big developers in NCER.
 
  They include Sime Darby Bhd, Eco World Development Group Bhd, Sunway Bhd, SP Setia Bhd, Eastern and Oriental Bhd, Hunza Properties Bhd, IJM Land Bhd, Tambun Indah Land Bhd, Ivory Properties Group Bhd, Jesin Group, Emico Holdings Bhd, EUPE Development Bhd, Paramount Corp Bhd, Epic Valley Holdings Group, Encomas Sdn Bhd, Aima Development Sdn Bhd and Nepta Development Sdn Bhd.
 
  "We are not involved in real estate. However, we facilitate the development of industrial areas such as Chuping, KSTP, Rubber City and Kamunting, by building priority infrastructure and attracting investments," NCIA chief executive Datuk Redza Rafiq told Property Times.
 
  Chuping Valley, a planned growth centre for green technology and environment-friendly manufacturing base, has the potential to transform the Perlis economy in the long term and this includes real estate development, he said.
 
  KSTP, meanwhile, combines a modern industrial park and a global research centre as its key components.
 
  "These two developments serve each other's needs by providing complementary services and solutions. KSTP will also have supporting components such as commercial areas, higher learning and training centres, education institutions and open spaces to create a place to live, work and play," Redza said.
 
  The most interesting development will be the Greater Kamunting project spread over 25 years.
 
  Kamunting is located in Taiping, which is famous for having "33 firsts". They include the first jail, golf course, post office, central police station, lake garden, clock tower, rest house, general hospital, railway, market, port, museum, government girl's school, war cemetery and night safari.
 
  Redza said a bulk of these properties and other areas in Kamunting will be rejuvenated.
 
  "The Greater Kamunting project is aimed at transforming and strengthening economic sectors such as tourism, manufacturing and agriculture in Kamunting and Taiping. These developments will be further accelerated with new infrastructure and human capital initiatives.
 
  "We are hoping to have about RM12.96 billion increase in gross domestic product and create 90,263 jobs by 2030. We are collaborating with Japan International Cooperation Agency to produce electrical buses. As a start, there will be one big bus and a few small ones," he said.
 
  Redza added that NCIA is also enhancing the zoo, while next year, it plans to improve the entrapment ecosystem of a fruit industry.

Eco World, Ballymore launch 3 UK projects

By Sharen Kaur

KUALA LUMPUR: THE EcoWorld-Ballymore Group has launched three innovative projects in London that have recorded a good take-up rate, thanks to the United Kingdom's vibrant real-estate market.
 
  The three projects are Embassy Gardens in Nine Elms, London City Island (LCI) on the Leamouth Peninsula, East London, and Land Wardian London in Canary Wharf.
 
  Eco World International Bhd president and chief executive officer Datuk Teow Leong Seng said London's residential market has outperformed most other global investment asset classes.
 
  He attributed this to the chronic housing shortage with an average of between 20,000 and 25,000 homes per year delivered over the past 10 years versus Mayor of London's estimated requirement of 42,000 new homes a year, with plans requiring boroughs to identify additional capacity to hit 49,000 homes yearly.
 
  Teow said London's growing population from 7.3 million to 8.6 million over the last decade with latest projection estimating it to reach 10 million people by 2035 was also a contributing factor.
 
  "London's residential prices have enjoyed an increase of more than nine per cent per annum in the last five years and outer fringes of London have seen positive price ripple effects.
 
  "Expectations are the London housing market will continue to be supported by growing local demand due to increased household equity, employment growth, low interest rates, a growing regional economy and the international market.
 
  "London is viewed as a safe haven destination for the global wealthy class to invest in, given its high level of regulatory transparency, conducive for foreign property ownership, first-class education attracting students and families from around the globe and a sought-after address for the wealthy," Teow told Property Times.
 
  On the three projects, Teow said its work in progress.
 
  The joint-venture is out to tender the basement contract for Wardian London. The project has been 72 per cent sold and work is targeted to start in the first quarter of next year.
 
  Embassy Gardens is 39 per cent sold and the units are estimated to be completed in 2017/2018.
 
  For LCI, three blocks have so far been launched.

Bina Puri eyes Pan Borneo jobs

By Sharen Kaur

KUALA LUMPUR: BINA Puri Holdings Bhd is vying for a contract in the RM27 billion Pan Borneo Highway project linking Sabah and Sarawak.
 
  Executive director Matthew Tee said the company is preparing to submit its tender documents for the pre-qualification process for main works in the Sarawak portion of the highway.
 
  "We are eyeing road infrastructure works, either as a main contractor or sub-contractor, for some portions," he told Business Times.
 
  The Sarawak section of the highway, stretching 1,090km from Tanjung Datu in the west to Merapok in the north, is expected to be completed by 2021 at an estimated cost of RM16.1 billion.
 
  A state-owned entity started works on the first phase, involving 773km, last month.
 
  Sarawak-based Lebuhraya Borneo Utara Sdn Bhd is the project delivery partner for the 1,090km toll-free stretch.
 
  "We expect more tenders to be called out early next year," Tee said.
 
  Bina Puri could face some competition from key contractors in the state, such as Naim Holdings Bhd, Zecon Bhd, Cahya Mata Sarawak Bhd and Hock Seng Lee Bhd.
 
  Bina Puri owns Kuala Lumpur-Kuala Selangor Expressway Bhd, the concessionaire for the 33km Kuala Lumpur-Kuala Selangor Expressway which was built at a cost of RM958 million. It spans from the north of Templer Park in Rawang to Assam Jawa town in Kuala Selangor.
 
  On the Sabah side, construction on the first phase of the Pan Borneo Highway, connecting Sindumin to Tawau at a distance of 706km, will commence next year, with the cost expected to reach RM12.8 billion.
 
  Tee said Bina Puri is also interested in the Sabah portion of the highway. The entire Pan Borneo Highway will span 2,239km.
 
  Although the ceiling budget is around RM27 billion, the Federal Government is still working to finalise the cost.
 
  The project is expected to accelerate Sabah and Sarawak's development. Economic spin-offs include greater opportunities for businesses to supply and support development of the highway.
 
  Works Minister Datuk Seri Fadillah Yusof said recently the concession agreement for the construction of the highway would be inked by the end of the year.
 
  The Federal Government is discussing with the state governments and related authorities on the technical and financial aspects.
 
  The project will be funded by DanaInfra Nasional Bhd, a fully-owned entity under Minister of Finance Inc.

Rajawali's investments bear fruit

By Sharen Kaur

KUALA LUMPUR: INDONESIA-based Rajawali Group's RM400 million investment to build St Regis Langkawi and the Langkawi International Conventional Centre (LICC) is turning into fruition.
 
  The LICC is up and running with pipeline events while the St Regis Langkawi is set to open on April 6 2016, drawing new crowds.
 
  Rajawali started its investment in Langkawi in 2005 with the acquisition of Sheraton Perdana Resort, which was later rebranded as Westin Hotel Resort & Spa Langkawi.
 
  The group is spending RM300 million to build St Regis Langkawi with 89 suites and four over-the-water villas and its strategic partner for the development is Starwood Hotels & Resorts Worldwide, Inc.
 
  Starwood is the operator of the luxury St Regis Hotel chain. Other brands under its stable include The Luxury Collection, Westin, Le Meridien, Sheraton, Four Points, Aloft and Element.
 
  Rajawali has also invested over RM100 million to build the 5,000 sq ft convention centre which can accommodate up to 1,200 people.
 
  The LICC was developed on a fasttrack mode and completed in 11 months, in time for the Asean Summit in April 2015.
 
  Michael Schlueter, managing director of the three properties (LICC, The Westin Langkawi and The St. Regis Langkawi), said with LICC, Langkawi now has conference facilities and infrastructure of international standards, transforming the island into an international hub for events and conventions.
 
  The opening of St. Regis Langkawi is expected to further enhance the island's standing as a luxury travel destination, he said.
 
  Schlueter said with the positioning of promoting Langkawi as a destination for the luxury market, LICC's state-of-the-art facilities make it fitting to host world class conventions such as the Langkawi International Maritime & Aerospace Exhibition Asean Summit and the Asean Regional Workshop.
 
  "Some of the special features include high end audio visual facilities such as Bose sound systems in all rooms, high ceiling measuring at nine meters with mounted chandeliers to exclude an ornate ambience, a 93 sq m VIP Suite, VIP holding room, lots of natural day light at the foyer areas and all function rooms being pillar-less," he said.
 
  He said LICC will play a pivotal role in supporting a platform for hospitality services for events on the island, supporting the development plans by the government to elevate Langkawi as a world class destination.
 
  "We expect LICC to drive the occupancy of all our properties on the island. We are planning another two hotels in Langkawi. By 2018, we expect to operate more than 600 rooms on the island," he told Property Times.
 
  The 222-room Westin Hotel is currently running at 70 per cent occupancy per annum and room rates start from RM650 a night.

RM11b Cyberjaya City Centre set to steal limelight

By Sharen Kaur

KUALA LUMPUR: Cyberjaya is already abuzz with real estate activities but the one that is going to take the limelight is the RM11 billion Cyberjaya City Centre (CCC) project.
 
  The CCC will be developed in four to five phases on 62.5ha of commercial and enterprise land owned by Cyberview Sdn Bhd, the master developer for Cyberjaya.
 
  Phase 1 of the project will be developed on a 22.3ha site and will generate a gross development value (GDV) of RM5.35 billion. It will feature a 200,000 sq ft convention centre, a 300 to 400 room business hotel, low and high-rise office buildings, and a retail podium.
 
  The CCC will also contain an integrated lifestyle and retail arena, and service residential complexes.
 
  The project will be developed by Malaysian Resources Corp Bhd (MRCB), a key player in transit-oriented developments (TOD), over 20 years.
 
  MRCB executive director Mohd Imran Salim told Property Times that the most iconic structure at the CCC will be a 50-story tower and this will come at the tail end of the project.
 
  "Most of the big buildings will come at the final phase of the development, which is beyond 2025," he said.
 
  Construction for Phase 1 will begin in the first half of next year and the target is to complete the convention centre in time for the World Congress of Information Technology 2020.
 
  Imran said the plan for CCC is to make it work as a TOD, similar to the group's other ongoing developments in Greater Klang Valley and Penang such as the PJ Sentral Garden City, Kwasa Sentral and the Penang Sentral transportation hub.
 
  CCC will be integrated with the MRT Line 2 between Sungai Buloh and Putrajaya and will provide seamless pedestrian connectivity with a walkway from Putrajaya Sentral.
 
  "The MRT2 will be ready in 2021 and it will be linked to Putrajaya Sentral, which is about 350 to 400 metres away. The MRT2 will allow people to easily come to Cyberjaya and Putrajaya."


Thursday, November 5, 2015

Timely rehabilitation of Bukit Jalil National Sports Complex

By Sharen Kaur
sharen@mediaprima.com.my

KUALA LUMPUR: THE regeneration of the 17-year-old Bukit Jalil National Sports Complex (NSC) is timely as Malaysia will be playing host to the Southeast Asian (SEA) Games in 2017.
 
  The NSC facilities were built by the UEM-Renong group in 1995 for the 1998 Commonwealth Games and have not undergone any significant refurbishment works since its opening.
 
  The facilities at the sport complex are in serious need of repair. The changing rooms and washrooms are deteriorating, its air-conditioning and ventilation system poor, while other systems, including fire safety and lighting, require an overhaul.
 
  The building facades, meanwhile, are ageing and need a major uplifting.
 
  At the same time, while the NSC is well-connected with numerous access roads and a light rail transit (LRT) station, there is a need to also improve the infrastructure.
 
  All these are about to change with the Federal Government's RM1.6 billion regeneration plan for the complex, which will turn it into an iconic Kuala Lumpur Sports City.
 
  KL Sports City is a fully integrated sports hub that will consist of high performance sports training facilities, a sports rehabilitation science centre, a youth park, public sports facilities, a sports museum, youth hostel, convention centre, and a sports-focused retail mall.
 
  The short term aim is clear - get the NSC ready to host the SEA Games in 2017.
 
  This will involve the regeneration of the Bukit Jalil Stadium and will see some key works carried out at the Putra Stadium, the National Aquatic Centre and the National Hockey Stadium.
 
  There will be a new facade for the national stadium, improvements to fire safety, lighting, washrooms and changing rooms, as well as better public transportation links and increased pedestrian access.
 
  But it's not all about the SEA Games as the government is also looking at taking sports to another level in Malaysia. Once the SEA Games is over, the focus will shift to building KL Sports City.
 
  What all these mean is that the sports city will contain new, world-class infrastructure that is accessible not only to athletes, but also the local community, recreational users and the public. This vibrant sports hub will then be accessible and usable all year round.
 
  Populous, an international expert in sports architecture, is the designer for KL Sports City.
 
  The award-winning company is a global leader when it comes to creating stadiums that not only catch the eye, but also draw people and communities together.
 
  Its previous designs included the Yankee Stadium, the 2012 London Olympic Stadium, South Korea's Incheon 2014 Asian Games Stadium and the Etihad Stadium expansion project in Manchester.
 
  Populous recently revealed designs for an elliptical stadium for London football club Tottenham Hotspur, boasting a retractable pitch that will allow it to also host American football games.
 
  When it comes to the NSC regeneration project and the current state of its facilities, something on this scale and timeline is always going to be ambitious.
 
  But that is just what Malaysia needs - a national stadium that provides a worthy stage for athletes to perform on during the 2017 SEA Games and a sports city that can then inspire us all to live healthier, more active lives.

I-Berhad reshaping Shah Alam

By Sharen Kaur
Published in NST on November 2, 2015

SHAH ALAM: FROM the bedding industry to property development, Tan Sri Lim Kim Hong, founder of I-Berhad, has an eye for adding value, attaining goals and driving revenue.
 
  It all started after Lim sold his cash-generating businesses, which had included mattress production, and started I-Berhad to venture into digital lifestyle product manufacturing and, subsequently, property development.
 
  Through I-Berhad, Lim bought 29ha from the Selangor government for RM60 million in 1993 and finally launched the i-City project in 2005.
 
  At the time, the project, with a gross development value (GDV) of RM1.5 billion, was supposed to be an information and communications technology (ICT) hub with data centres, offices and residential towers.
 
  In July 2011, I-Berhad won a 21-year concession from the state government to manage an additional 12ha under the project. This raised i-City's GDV to RM3 billion.
 
  Today, the project's GDV is touching RM10 billion as the development master plan evolves and becomes the pulse of Selangor.
 
  Lim has invested a total of RM1 billion of personal funds into i-City so far.
 
  The company has completed and handed over three towers - a three-star hotel, i-Residence and an office tower.
 
  It has also invested up to RM80 million to develop a leisure park over 10ha with four attractions, namely City of Digital Lights, SnoWalk, WaterWorld and FunWorld.
 
  This means that I-Berhad has so far developed one million sq ft out of the total 13 million sq ft of approved gross floor area at i-City.
 
  The i-Residence was launched for RM450 per square foot (psf) in 2012 and prices have now exceeded RM600 psf.
 
  New residential launches at i-City, comprising fully furnished units, were going at a rate of 750 psf to 800 psf, Lim told Property Times.
 
  The construction of seven residential blocks are ongoing, including 50-storey blocks with up to 3,000 small office/home office (SOHO) units and 300 retail units.
 
  Six blocks have been launched and I-Berhad has sold 75 per cent of the units to Malaysians. The seventh would be launched latest by early next year, said Lim.
 
  I-Berhad will commence construction on four new buildings by the end of the year, including a four-star hotel that will operate under the Hilton brand, an office tower and two residential blocks offering units with sizes starting from 1,000 sq ft.
 
  Construction of the one million sq feet Plaza Central mall would also commence next month, Lim said.
 
  He said over the next five to eight years, 10 more towers would be built, comprising a five-star hotel as well as residential and office buildings.
 
  "Because of the proposed Light Rail Transit 3 project, we have the opportunity to make this a transit-oriented development.
 
  "In practical terms, it would mean a higher plot ratio, better connectivity to public transportation services and positioning of i-City as a car-park hub for the new LRT station," Lim said.
 
  In total, i-City will have 25,000 parking bays, with 6,000 currently under construction.

UEM Sunrise eyes prime Aussie sites

By Sharen Kaur
sharen@mediaprima.com.my

MELBOURNE: UEM Sunrise Bhd, Malaysia's largest property development company by market capitalisation, is allocating up to A$100 million (RM306 million) to acquire two new prime sites in Australia.
 
  Business Times understands that the company is eyeing strategic sites in Melbourne and Sydney with the deals expected to be completed next year.
 
  UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib said recently that Australia would remain a major long-term market for the luxury property developer.
 
  He expects overseas projects to contribute between 10 and 20 per cent to company's revenue starting next year, led by Australia.
 
  In less than two years, UEM Sunrise had acquired three sites on LaTrobe Street, Mackenzie Street and St Kilda Road in Melbourne for A$123 million.
 
  The three projects are expected to generate a combined gross development value (GDV) of A$1.32 billion over four years up to 2019.
 
  UEM Sunrise will develop Aurora Melbourne Central (GDV: A$770 million), Conservatory (GDV: A$320 million) and St Kilda (GDV: A$230 million) on LaTrobe Street, Mackenzie Street and St Kilda Road, respectively.
 
  The developer launched Conservatory in the Melbourne CBD last week, following a ground-breaking ceremony for Aurora Melbourne Central.
 
  Aurora Melbourne Central with 941 units of apartments is fully sold, while less than 30 per cent of the 446 units at Conservatory remain since its global launch last month.
 
  The third project, St Kilda, will be launched next year.

Chinese firms get letter of intent for Gemas-JB line

By Sharen Kaur
sharen@mediaprima.com.my

Published in NST on November 4, 2015

PUTRAJAYA: A consortium of Chinese companies has been awarded a letter of intent (LoI) for the Gemas-Johor Baru electrified double-tracking project (EDTP) estimated to cost RM9.3 billion.
 
  Business Times understands that state-owned companies China Railway Engineering Co, China Railway Construction Co (CRCC) and China Communications Construction received the LoI from the Transport Ministry several months ago.
 
  The project, involving 197km of double-track rail on existing Keretapi Tanah Melayu Bhd alignment, was mooted more than a decade ago. The Chinese firms have been lobbying for it since then.
 
  "The consortium has to source for Malaysian partners for the project and also meet the requirements of the Finance Ministry's industrial collaboration programme.
 
  "They will have to put in a proposal for the final price negotiation so that the letter of award can be issued by next month. They are currently in negotiations with the Transport Ministry for the letter of award," said a source with knowledge on the matter.
 
  On funding, the consortium will receive progressive payments from the government.
 
  Tenders for the main packages were expected to be called in the first half of next year, said sources.
 
  The consortium is led by CRCC, whose main partner is Fajarbaru Builder Group Bhd.
 
  Fajarbaru's portfolio includes a RM289.44 million construction contract to extend the Ampang light rail transit line.
 
  Previously, it won a RM316 million construction job for Package 2 (Tampin to Batang Melaka) of the Seremban-Gemas EDTP from India's Ircon International Ltd, the main contractor for the RM3.5 billion project.
 
  The Gemas-Johor Baru EDTP is expected to be completed during the 11th Malaysia Plan, which ends in 2020, and will spur economic development in Johor.
 
  The Transport Ministry had put up an advertisement last month to invite public inspection of the project plan, which details the route of the 197km double-track rail with the new alignment's designated speed at 160kph.
 
  The ministry said it had submitted the route plan, details of the route alignment and other related items to the Land Public Transport Commission for the public inspection, which would end on January 26 next year.
 
  The Gemas-Johor Baru EDTP will complement the current EDTP lines from the Klang Valley to Padang Besar, Perlis.
 
  Malaysia has spent about RM24 billion on the EDTP from Port Klang to Batu Caves, Rawang to Ipoh, Ipoh to Padang Besar and Seremban to Gemas.
 
  At the moment, only a single track links Padang Besar to Johor Baru.

'High-speed rail likely to cost RM65b'

By Sharen Kaur
Published in NST on November 5, 2015

KUALA LUMPUR: WORKS on the proposed high-speed rail (HSR) linking Kuala Lumpur and Singapore may commence in early 2018 and likely at a cost of RM65 billion, said people familiar with the matter.
 
  It is understood that the current estimated HSR cost per kilometre for systems and track is US$10 million (RM42.6 million).
 
  "This means, for a total length of 350km, the systems and track works would cost RM15 billion. Civil infrastructure cost is about three times more than the systems and track works so we are looking at RM45 billion.
 
  "We also estimate that there should be at least 60 four-car train sets, with 30 sets each to serve the express and transit services. The cost to purchase the 60 sets would be about RM5 billion.
 
  "These are the current estimates for the HSR project based on today's market price for raw materials and the value of the ringgit versus the US dollar," sources said.
 
  Business Times was the first to report more than five years ago that it could cost the Malaysian government around RM40 billion to build the HSR link, including RM10 billion to buy high-speed trains.
 
  The HSR is expected to cut travel time between Kuala Lumpur and Singapore to 90 minutes, from about five hours now.
 
  The Malaysian terminus will be located in Bandar Malaysia, about 3km from Kuala Lumpur's financial district, while Singapore's will be located at the current site of the Jurong Country Club in Jurong East.
 
  According to the source, private parties are proposing to build the HSR link in return for a 50-year concession.
 
  "That is how long it would take for them to recover their investment in the HSR project should it cost RM65 billion. Both Malaysia and Singapore are still in discussions over how to implement the project.
 
  "It could be on a government-to-government business model where the Japanese or Chinese can come up with the money and fund the development. Nothing is firm yet," the source said.
 
  Deputy Minister in the Prime Minister's Department Datuk Razali Ibrahim said recently that only four per cent of the rail would be in Singapore.
 
  He also said that the HSR is expected to contribute RM100 billion to the country's gross domestic product.
 
  Meanwhile, Malaysia High-Speed Rail Corp Sdn Bhd chief executive officer Mohd Nur Ismail Mohamed Kamal told Business Times that the bilateral agreement was expected to be signed by early next year.
 
  "Once the agreement is signed, it would take about one year or so for tenders to come out. We are fine-tuning details of the proposed alignment and design. We are open to bids from various parties," he said.