Vincent Tan to reject any U Mobile takeover offer?

 By Sharen Kaur - July 19, 2024 

The major shareholders of U Mobile Sdn Bhd will reject any buyout offers for the telecommunications company, according to people with knowledge of the matter. -NSTP/HASRIYASYAH SABUDIN.

KUALA LUMPUR: The major shareholders of U Mobile Sdn Bhd will reject any buyout offers for the telecommunications company, according to people with knowledge of the matter.

The shareholders, including Berjaya Group founder Tan Sri Vincent Tan Chee Yioun, wanted to continue U Mobile's expansion to become one of Malaysia's top 5G players, they added.

The sources also said U Mobile is on track to file for an initial public offering (IPO) in the current quarter.

Founded in 2006, U Mobile has been considering a listing since 2019, with plans to raise about US$500 million (RM2.1 billion) in the IPO.

Another major shareholder of U Mobile is Singapore Technologies Telemedia Pte Ltd, backed by Temasek Holdings Pte Ltd.

On Monday, it was reported that Maxis Bhd, ranked as the country's second-largest mobile operator and controlled by billionaire T. Ananda Krishnan, was considering buying out U Mobile to expand its presence in Malaysia.

Quoting people with knowledge of the matter, the report stated that Maxis had expressed interest in U Mobile and talks were at an early stage. 

It said that pricing could be a hurdle to a potential buyout, with U Mobile's owners seeking a valuation of more than RM10 billion, and there was no guarantee that a deal would be reached.

"The shareholders of U Mobile are not selling. They aim to launch an IPO and have plans to grow the company," a source told Business Times.

"U Mobile is known for its competitive pricing and providing affordable and reliable mobile connectivity to both individual and business users across Malaysia. The company is very focused on delivering more innovative 5G products and services to its customers. It is committed to building Malaysia's second 5G network," the source added.

U Mobile has an estimated 8.5 million subscribers and more than 9,000 4G sites, with a network ready for 5G.

In contrast, market leader CelcomDigi Bhd commands a subscriber base of 20.4 million, while Maxis has about 9.5 million subscribers.

U Mobile, along with Maxis and CelcomDigi Bhd, have expressed interest in participating in the second 5G network, which the government is likely to award in the third quarter of 2024.

Last week, U Mobile signed Memoranda of Understanding (MoU) with four network facility providers (NFPs), establishing strategic partnerships to expand 5G infrastructure and accelerate the rollout of the second 5G network in the country.

The four NFPs are Bullish Aim, EdgePoint Towers Sdn Bhd, Naza Communications, and OCK Group Bhd.

Woon Ooi Yuen, chief technology officer of U Mobile, said in a statement that the collaboration with the NFPs strengthened the company's readiness to roll out the second 5G network in Malaysia.

Source: https://www.nst.com.my/business/corporate/2024/07/1078502/vincent-tan-reject-any-u-mobile-takeover-offer

Malakat Mall: End of an era

 By Sharen Kaur - July 18, 2024 

Image via Malakat Mall (Facebook)

CYBERJAYA: Malakat Mall, a shopping complex in Cyberjaya once known as the 'ghost mall', will close on July 31 after four years in operation, according to a Facebook post by the mall's founder, Fadzil Hashim. 

He announced that Malakat Mall would shut down to explore a new business model but did not elaborate on the details.

Fadzil cited various challenges, including a forced closure just five days after opening due to the Movement Control Order (MCO) during the COVID-19 pandemic in March 2020, and noted that these challenges persisted beyond the pandemic.

"To mark Malakat Mall's closure, we are announcing a closing sale with discounts up to 70 per cent from July 20 to July 31," he said.

Malakat Mall was initially established to empower Muslim entrepreneurs by offering business spaces without requiring contracts. 

It gained attention in late 2022 after a TikTok video showcased how deserted the shopping complex was.

In 2022, Fadzil reportedly said that he and his partners had invested RM40 million into redeveloping the mall. 

Despite generating revenues of RM17 million to RM25 million in its first two years, the mall struggled to maintain sustainability.

According to market experts, although the mall comprises well-stocked shops and a food court with natural light streaming into the pristine space, it is not appealing to non-residents of Cyberjaya. 

"People are not going to drive 30 minutes to Cyberjaya just to go to the mall," he told NST Property.

Cyberjaya, Malaysia's ambitious attempt to create a technology hub akin to Silicon Valley, was developed in 1997 as the brainchild of former Prime Minister Tun Dr. Mahathir Mohamad, who wanted to build a "multimedia economy.". 

However, over the years, it faced several challenges that hindered its success. 

The city, now home to over 100,000 residents, is often labelled a "failure," with limited signs of the anticipated tech boom. 

Rather than hosting unicorn startups and major tech offices, Cyberjaya has evolved into a residential area known for affordable rent and a low-cost living environment, marked by pockets of nearly deserted spaces, in stark contrast to the typical Silicon Valley.

Office occupancy, rents in Klang Valley stable despite influx of new buildings

 By Sharen Kaur - July 12, 2024

NSTP Photo/Sharen Kaur

KUALA LUMPUR: Office occupancy and rental rates in the Klang Valley have remained relatively stable this year, despite the addition of new commercial buildings in the first half of 2024 (1H 2024). 

According to Kenanga Research, the occupancy rate in Q1 2024 was 72 per cent, a slight increase from 71.9 per cent in the previous quarter.

High-growth sectors such as technology and finance are driving demand for office spaces, but the market remains imbalanced, it noted.

Five new office buildings, including Felcra Tower and The Exchange TRX office by Lendlease, were scheduled to be completed in 1H 2024, adding about 1.4 million square feet to the Klang Valley's existing stock.

Regarding real estate investment trusts (REITs), Kenanga pointed out that they are not the best alternative to holding cash, maintaining a 'neutral' stance on the sector. 

The retail REIT sector is facing challenges due to the recent increase in the sales and service tax (SST) to 8.0 per cent, weak consumer spending, sustained elevated inflation, and fuel subsidy rationalisation. However, these issues are partially mitigated by the impending 13 per cent pay rise for most civil servants, the deferment of the luxury goods tax, and the return of international tourists.

Despite concerns over weak consumer spending, the recent pay rise for civil servants is expected to partially restore their spending power. 

Kenanga expressed a preference for retail REITs with malls in strategic locations while remaining cautious about the office segment. 

The firm's top sector picks are KLCC Real Estate Investment Trust, with an 'outperform' rating and a target price (TP) of RM8, and Pavilion REIT, with an 'outperform' rating and a TP of RM1.59.

Kenanga also noted that two new malls are set to open in 2H 2025, including Pavilion Damansara Heights (Phase 2) and 118 Mall. These openings follow the launch of The Exchange TRX and Pavilion Damansara Heights (Phase 1) in 2H 2023.

Retail occupancy rates have been maintained, with a slight increase in rental rates.

In Q1 2024, retail occupancy rates were 77.6 per cent, up from 76.4 per cent in Q4 2023. Rental rates among retail REITs have increased by about 3.0 percent year-on-year.

"We do not expect Bank Negara Malaysia to cut its current overnight policy rate of 3.0 per cent this year. Therefore, we do not foresee yield seekers returning to REITs en masse," the firm said.

RHB Research prefers REITs with more inorganic growth prospects, like Axis REIT and Sunway REIT.

"We like Sunway REIT for its diverse property portfolio and active acquisition strategy. Axis REIT is our pick due to the resilient industrial sub-sector.

"For the sector as a whole, REITs remain a stronger defensive yield play in 2025 given the stable economic and rental growth outlook, while the market is still waiting for the interest rate cuts to begin in the region," it said.

RHB said there are opportunities within the office segment. 

While the outlook for the office sector remains challenging due to the supply-demand imbalance, Sentral REIT is attractive for its high dividend yield, it said. 

"While occupancy rates may fluctuate as tenants move around, we think earnings would be sufficiently supported by its stronger office assets, especially following the acquisition of Menara CelcomDigi in December 2023," it said.

LBS Bina promises a dream home in Batu Pahat

 By Sharen Kaur - July 17, 2024 

LBS Bina Group Berhad announced the launch of its latest development, Imperial Garden. 

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KUALA LUMPUR: LBS Bina Group Berhad announced the launch of its latest development, Imperial Garden, located in Batu Pahat, Johor.

This six-phase double storey semi-detached development, located in the thriving Bandar Putera Indah, will be built on 37.11 acres of freehold land with an estimated gross development value (GDV) of RM 237 million.

Phase 1 comprising 30 units has been launched, while Phase 2 with 33 units is set to launch in August this year, according to LBS Group executive chairman Tan Sri Ir. (Dr.) Lim Hock San.

"We understand that the homeownership journey is becoming more challenging day by day, more so for those who have a dream to own a freehold and landed property. 

"Imperial Garden makes this a dream home come true, as we have curated the project to make it both a perfect home for your own stay and one that will also look great in your investment portfolio, as it provides great convenience for those working in Singapore," Lim said in a statement.

According to Lim, Batu Pahat is the ideal location for this launch due to its rapid growth with increasing infrastructure development and economic activities.

Each unit features a 1,829 sq ft layout with four bedrooms, three bathrooms, and spacious living areas, surrounded by green spaces, parks, and communal areas.

This makes Imperial Garden the perfect home for growing families and empty nesters, starting at a price of RM 575,280, he said.

Lim said that the motto "Urban Living Made Simple" speaks for itself, encapsulating Imperial Garden's vision of uncomplicated living in a bustling urban setting.

The residence ensures residents easy access to essential amenities and facilities. Families will especially appreciate the expansive garden areas, which are perfect for outdoor activities and community gatherings, he said.

Favourable investment climate driving local real estate market growth

 By Sharen Kaur - July 18, 2024 

The local real estate market is experiencing growth thanks to a more favourable investment climate driven by strategic government initiatives.

KUALA LUMPUR: The local real estate market is experiencing growth thanks to a more favourable investment climate driven by strategic government initiatives.

This surge is particularly evident in the high-end residential sector, where sales have seen significant increases.

The first quarter of 2024 (Q12024) saw 3,413 high-end residential units sold in the Klang Valley for RM2.8 billion, marking a 19.2 per cent increase in volume and a 19.3 per cent rise in value, according to Knight Frank Malaysia's Real Estate Highlights 1st Half of 2024 (REH) report that was unveiled yesterday.

It revealed that three new high-end condominium projects contributed 1,846 units to the market. Looking ahead, an additional 5,866 units are expected to be completed in the second half of 2024.

Overall, the report underscores a resilient real estate market across various sectors including residential, office, retail, hospitality, and industrial, spanning regions like the Klang Valley, Penang, Johor, Sabah, and Sarawak.

Johor saw a significant growth in transaction volumes and values within both the condominium and serviced apartment segments.

"Several high-rise residential projects were launched, reflecting a vibrant market driven by strategic developments like the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link," said Knight Frank Malaysia group managing director Keith Ooi.

According to the report, the high-end residential market in Penang continues to be buoyed by strong demand, particularly in areas with high connectivity and amenities.

New properties featuring upgraded amenities are expected to boost the rental market in Penang, drawing tenants and fostering rental growth across various neighbourhoods.

In Sabah, the high-rise residential schemes are particularly targeted at small to mid-sized households, reflecting a focus on lifestyle and convenience, while Sarawak's economic growth, with a gross domestic product of RM146 billion achieved in 2023, is supporting increased activity in the high-end residential market.

"The market (in Sarawak) is seeing a rise in both transaction volume and value, driven by ongoing infrastructure developments such as the Automated Rapid Transit (ART) and hydrogen buses, which enhance the attractiveness of high-end residential properties in the region," Ooi said.

Meanwhile, the findings of the report underscore the strategic importance of the industrial sector in the country's economic landscape.

Major investments in data centres, notably by Google in Klang Valley, and an upward trend in the manufacturing sector underscore the sector's growth.

Key infrastructure projects such as the East Coast Rail Line (ECRL), Johor Bahru-Singapore Rapid Transit System (RTS), Pan Borneo Sabah, and MyDigital 5G are expected to further enhance connectivity and support the sector's growth. 

"All of these indicate a strengthening investment climate, driven by strategic government initiatives and a supportive regulatory environment," Ooi said.

The mid-year review highlights a promising trajectory for the property sector, supported by robust economic growth, significant investments, and adaptive market trends, he said.

"Malaysia continues to show promising growth prospects, bolstered by strategic investments, infrastructure improvements, and evolving market dynamics," Ooi said.

In terms of the office market, Ooi said that it continues to draw multinational corporations, buoyed by competitive rental rates, a skilled workforce, and robust government support for the digital economy.