Berjaya Food eyes bigger bite

By Sharen Kaur
sharen@nstp.com.my
Published in NST on February 19, 2011

Berjaya Food Bhd (BFood), which runs the Kenny Rogers Roasters (KRR) restaurant chain in Malaysia, may buy other food businesses under the Berjaya Group to expand.

 
The food group launched its initial public offering (IPO) yesterday, which means that investors will get the chance to have a bite of the KRR business.

Berjaya, controlled by tycoon Tan Sri Vincent Tan Chee Yioun, holds the franchise for KRR, Krispy Kreme Doughnuts, Starbucks Coffee, Wendy's and Papa John's Pizza.

BFood executive chairman Datuk Robin Tan Yeong Ching said it may even buy rival food chains.

"This is a long-term plan. At the moment, there is nothing on the table. Our immediate focus will be to grow the KRR chain here," he said yesterday in Kuala Lumpur after launching BFood's prospectus.


BFood now owns 52 KRR stores in various malls in Malaysia. On top of that, it also has 13 franchised outlets.

BFood chief executive officer Datuk Francis Lee said it plans to open eight to 10 new outlets or more a year, provided there are good locations. This would mean a minimum investment of RM6 million a year.

However, it will not open any under franchising to control the operations, Lee said.

The IPO entails an offer for sale of 35.8 million shares of 50 sen each, priced at 51 sen. This means the IPO will raise RM18.3 million and the money will be pocketed by parent Berjaya Group. The listing on Bursa Malaysia's Main Market is scheduled on March 8.

BFood has hired AmInvestment Bank Bhd to arrange the IPO.

Lee said upon listing, BFood will have RM26 million in cash to fund its outlet expansion and he expects the company to do better this year.

"Most of our KRR outlets are profitable. We have some stores that are not doing well but it is not bleeding so badly. We are finding ways to improve all our outlets such as introducing tea-time menu, home delivery and takeouts," Lee said.

For fiscal year April 30 2010, BFood registered a net profit of RM8.7 million on revenue of RM60.4 million. The first restaurant was opened in 1994. 

MRCB plans RM300m condo project in KL

By Sharen Kaur
sharen@nstp.com.my


PROPERTY developer Malaysian Resources Corp Bhd (MRCB) aims to launch a high-end condominium project in Kuala Lumpur, worth an estimated RM300 million, by the end of this year.

The company has bought 0.4 hectare along Jalan Kia Peng, near the Petronas Twin Towers, from a land owner for an undisclosed amount.

MRCB chief executive officer Datuk Mohamed Razeek Hussain said on Wednesday in a statement that although it is leasehold land, it would be ideal for a residential development due to its prime location and scarcity of land within the Kuala Lumpur City Centre vicinity.

Mohamed Razeek said the company is now finalising the building design and layout plan.
The project, slated to be done in three years, will set a new benchmark in luxury development at the Jalan Kia Peng area along side other established residences, he added.

MRCB also plans to inject new ideas to ensure the project's success.

"With the injection of our concept, the residential development is expected to become yet another preferred residential address with an excellent choice of designs," Mohamed Razeek said.

MRCB, through its property arm MRCB Land, has more than RM5 billion worth of on-going property projects.

Mah Sing upbeat on achieving RM2.5b sales

By Sharen Kaur
sharen@nstp.com.my
Published in NST on February 14, 2011

 Mah Sing Group Bhd is expected to be one of the best performers this year, with a bullish sales target of RM2.5 billion. 
 
The target is 70 per cent more than 2010 and the highest on record.

Group chief executive and managing director Tan Sri Leong Hoy Kum told Business Times he was confident of Mah Sing meeting the sales target considering it has 33 ongoing projects valued at over RM9 billion and RM3 billion worth of new launches planned for this year.

Leong said the confluence of strong fundamentals and its branding, locations, concepts and products will make 2011 another good year for Mah Sing.

The company is one of the fastest growing property development companies in Malaysia and the most diversified property player as it offers products in various segments.

Its products offering are mainly commercial projects, mixed development and medium-to-high end residential properties with focus on the Klang Valley and Penang. Mah Sing also has township projects in Johor, and all these offer stable earnings stream.

The company's revenue and net profit, over the past five years, has grown at a compounded annual growth rate of 8.2 per cent and 14.3 per cent respectively.

The growth was achievable because of Mah Sing's quick turnaround strategy in developing smaller parcels of prime landbank that offer quicker turnaround timeframe.

The strategy had enabled the company to unlock land value in shorter timeframes and free up cashflow.

MIDF Research opined that Mah Sing's 2010 financial results, to be released by end-February, is expected to exceed 2009's top and bottom lines by 37 per cent and 20.9 per cent respectively (base on consensus forecast).

For fiscal 2009, Mah Sing posted a net profit of RM94.3 million on revenue of RM701.6 million.

On the company's stock movement, MIDF said investor's confidence in Mah Sing has improved after undergoing transformation with consistent growth of revenue and earnings as well as maintaining a healthy balance sheet over the past five years.

Mah Sing has RM3b projects in the pipeline

By Sharen Kaur
sharen@nstp.com.my
Published in NST on February 14, 2011



Mah Sing Group Bhd, Malaysia's fifth largest property developer by revenue, is ready to roll out RM3 billion worth of new launches this year on positive domestic economic outlook.

Group chief executive and managing director Tan Sri Leong Hoy Kum said he was bullish on sales moving fast paced as ripple effects from recent government initiatives will bring more to buy properties.

Speaking to Business Times, Leong said initiatives under the Economic Transformation Programme and 10th Malaysia Plan should boost property demand with expected increase in job creation, urbanisation, the standards of living and income level.

He expects wealth creation from the local stock market to also have an impact on the property sector as gains are invested in physical properties.
"The property market has done well in 2010 and we are confident that the momentum is sustainable into 2011 as the current buying pattern is backed by fundamentals of the economy and purchasers," Leong said.

Leong feels there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing's new launches will comprise a mix of landed residential, niche size serviced residences, shop offices, retail units, small office/home office and industrial.

Leong said projects featuring lifestyle elements and community living with facilities like a clubhouse and pool will continue to do well.

To meet the demand in this segment, Mah Sing will offer Garden Residence in Cyberjaya, Kinrara Residence in Puchong, One Legenda and Hijauan Residence in Cheras, and Legenda@Southbay on Penang island.

These projects will feature superlink homes, semi-detached homes and bungalows.

Mah Sing will also offer smaller units for serviced residences and condominiums in the second half of this year to provide easier entry for investors, leading to higher take-up rates. Here, it will roll out M-City@Jalan Ampang, Leong said.

The company will also launch Icon Residence and Ferringhi Residence in Penang, and Austin Suites in Johor Baru, Johor.

For commercial projects, Mah Sing intends to launch Star Avenue in Damansara, and Icon City in Petaling Jaya in the first half of this year.

Meanwhile, the third industrial project under the iParc series, iParc3@Bukit Jelutong, will be launched by mid-year.

Leong said in line with the company's strategy of a fast turnaround, it will preview these new projects soon, while scouting for prime land.

"Although our landbank is enough to sustain us for the next seven years, we are looking for sizeable pieces of land and we have the balance sheet to fund the acquisition," he said.

Mah Sing, which has a cash pile of RM233 million, made 10 land transactions involving 118ha for RM756 million last year.

Abu Dhabi's Tasweek buys Superboom stake

By Sharen Kaur
sharen@nstp.com.my
Published in NST on February 2, 2011

ABU DHABI-based Tasweek Real Estate Marketing and Development is buying a minority interest in property developer Superboom Projects Sdn Bhd.


Superboom is developing the RM250 million high-end condominium project named The Haven Lakeside Residences in Ipoh, Perak.

The deal was signed last weekend. Superboom chief executive officer Peter Chan declined to specify the stake size nor the amount paid by Tasweek.

"This is a strategic alliance between us and Tasweek to take on more projects in Malaysia. They were very impressed with our development and have decided to invest in Malaysia," said Chan.

He added that the group will provide funds for the project and market the units in the Middle East.

The deal comes just a week after Superboom appointed Best Western International Inc, one of the world's largest hotel chains, to manage, market and lease the units internationally.

Set for completion in 2013, The Haven will see its three 26-storey towers with 165 units each becoming the tallest buildings in Perak.

China's Beijing Construction & Engineering and Bina Puri Holdings Bhd have been given a contract worth RM109 million to construct the buildings.

According to Chan, 85 per cent of Block A and 60 per cent of Block C have been sold to property investors in Malaysia, Singapore, Hong Kong, India, Europe and the Middle East in the last nine months.

Block B was launched last weekend and he expects half of the building to be sold within three to six months.

Buyers are attracted to The Haven as it overlooks a 1.6ha private natural lake with running water, a 14-storey high monolithic limestone rock formation, and the existing 280 million-year-old limestone hills.

The Haven is aimed to be among the first developments to embark on all feasible avenues of harvesting nature's renewable and sustainable resources such as wind, water, bio-gas and pro-active mechanical resources to power and maintain common areas.

  (ends)

Sunway adds shine to REITs

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 31, 2011

MORE property groups are likely to set up real estate investment trusts (REITs) in Malaysia this year as the market continues to stay attractive, said the manager of a major property trust.


"With positive macro economy numbers and higher disposable income, we expect the REIT market to be an attractive investment," said Datuk Jeffrey Ng, the chief executive officer of Sunway REIT Management Sdn Bhd, the manager for Sunway REIT.

Sunway REIT is Malaysia's largest REIT, and it is also the largest REIT initial public offering in Asia, excluding Japan, since 2007.

It was launched by Sunway City Bhd and Sunway REIT Management last July, with eight assets worth RM3.7 billion.

Sunway REIT is expected to double its asset size to RM7 billion in five years, which will comprise 60 per cent of retail properties.

Ng said it is looking for properties to buy, but he declined to elaborate.

Pipeline properties include the two new phases to Sunway Pyramid mall, now known as SP3 and SP4.

Ng said Sunway REIT has helped to bolster the equity market and made it more attractive to foreign institutional players.

"Before the entry of Sunway REIT, the Malaysian REIT (M-REIT) market was never on the international radar screen as the players were too small to attract foreign investors.

"With Sunway REIT coming in, I think we have been catalytic to put M-REIT back on the global funds' radar," he said on Friday in Bandar Sunway, Selangor.

Sunway REIT's assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya and two office towers.

Sunway REIT is 58 per cent held by institutional funds like the Employees Provident Fund, Permodalan Nasional Bhd, Government of Singapore Investment Corp and Great Eastern Life Assurance (M) Bhd. Some 26 per cent of the trust is held by foreign unit holders.

     (ends)

Sunway REIT to beat profit forecast

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 29, 2011

SUNWAY Real Estate Investment Trust (REIT), Malaysia's biggest property trust, expects to do better than the RM170 million net profit it forecast for the year.


This is due to strong rental revision of 16 per cent for its entire portfolio in 2010, which has improved performance of the properties, Datuk Jeffrey Ng, the chief executive officer of Sunway REIT Management Sdn Bhd said.

Sunway REIT has eight assets worth RM3.7 billion. They are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya and two office tower.

Ng said the main driver for growth this year will be Sunway Pyramid.

Net rental for Sunway Pyramid was raised from RM8.90 per sq ft (psf) to RM9.40 psf after Sunway REIT's initial public offering last July, by Sunway City Bhd (SunCity).

The mall has recorded a sales growth rate of 15 per cent, higher than industry growth of between five and 10 per cent.

Any major change to the mall's earnings will have a positive impact on the trust's overall performance as it contributes 60 per cent to the trust's earnings.

Ng expects Sunway REIT to also surpass its forecast revenue of RM330 million, led by overall improvement of Sunway Integrated Resort City (SIRC).

SIRC, a multi-billion development by Suncity has two operating hotels, shopping malls and universities, Sunway Medical Centre, condominiums and villas, convention centres, shopoffices and a theme park.

Ng said SIRC will benefit from the rising growth in tourism spending, which is around RM50 billion a year.

"If SIRC continues to grow and be vibrant, there is no reason why Sunway REIT cannot achieve double digit growth year on year," Ng said.

    (ends)

Bina Puri looks to Mideast, Thailand for new jobs

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 25, 2011

CONSTRUCTION outfit Bina Puri Holdings Bhd hopes to maintain the rate of new contracts this year by securing RM2.5 billion worth of work.


Group managing director Tan Sri Datuk Tee Hock Seng said the group is leaning towards the Middle East and Thailand for new jobs this year.

This is because he does not expect major projects to be announced in Malaysia, apart from the RM40 billion mass rapid transit system.

Bina Puri anticipates more jobs in Saudi Arabia, where its government has announced new infrastructure projects worth US$60 billion (RM183.6 billion).

It won its first project in Saudi Arabia late last year, a RM5.7 million storm water pipeline project.

"Last year was an exceptionally good year for us with both the the Ampang light rail transit line extension and the new low-cost carrier terminal in Sepang coming on board at the same time," he said.

In 2010, the group secured projects worth RM2.5 billion.

Other projects it won are the Kuala Lumpur-Kuala Selangor Expressway privatisation job as well as building ramps and a main line bridge for the Eastern Dispersal Link in Johor.

In an interview with Business Times last week, Tee said Bina Puri has bid for building and infrastructure projects worth over RM2 billion, in Malaysia, Thailand, Brunei and the Middle East.

So far, it has won a RM62.8 million contract for structural and architectural works for Phase One of a condominium project in Thailand.

    (ends)

Demand for new houses to surge, says Knight Frank MD

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 21, 2011

THERE will be a surge in demand for new houses in Malaysia as Asian property investors look for properties, and expatriates come here for projects under the Economic Transformation Programme (ETP).


"The expatriates will be here for the duration of the projects such as the Mass Rapid Transit (MRT), among others. They would need a place to stay," said Eric Y.H. Ooi, managing director of Knight Frank.

Ooi said, Asian investors are returning as Malaysia still offers the best value for properties, as compared to Singapore and Hong Kong where the property price is about five times more expensive.

Malaysia is the prime investment location in Asia because of its stable property market and relative affordability.

Many investors are coming to the market, rich with cash, and with an appetite for luxury properties in Kuala Lumpur, Ooi said on the sidelines of a property market outlook summit in Kuala Lumpur recently.

The investors from Singapore, Hong Kong, Indonesia, Taiwan, South Korea and Japan are buying condominiums, apartments and bungalows in the KLCC, Bangsar, Mont' Kiara and Kenny Hills areas.

Ooi said Malaysia's positive economic outlook and improvement in the rental market is driving them here.

During 2008/2009, rental of the properties fell by 20 per cent to 40 per cent in some locations in Kuala Lumpur, because of the financial meltdown and more supply in the market.

"It has improved and rentals are hovering between RM3.50 per sq ft and RM7.00 psf now," Ooi said.

Ooi expects more than 15 per cent of the sale of luxury properties this year to come from foreigners.

But this is low compared to 2008, where some 40 per cent of the sales were contributed by foreigners.

"We expect it to return to levels of 30 per cent," he said.

    (ends)

Hotel management firm may go public in 5 years

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 20, 2011

ZINC InVision Hospitality, which aims to manage 30 hotels in Asia Pacific by end-2013 may go public in about five years to raise funds for its expansion, executive director Rahul Chaudhary said, adding that an initial public offering will accelerate the company's growth.


"But we would first need to build the company in terms of assets and revenue. For now, we have Z-I Capital for our funding requirements," he said.

"Where or how much we want to raise depends on the size of the company then," he told Business Times yesterday in Kuala Lumpur, at the briefing on Zinc InVision by Cinnovation CG president, Binod Chaudhary.

Zinc InVision, set up this month, is a 51:49 joint venture between Cinnovation, a Singaporean investment firm and Thailand's InVision Hospitality.

Cinnovation is part of the Nepal-based global conglomerate Chaudhary Group, which has holdings in excess of US$1 billion (RM3.05 billion). Z-I Capital is the investment fund set up by existing shareholders of Zinc InVision.

Zinc InVision is investing US$180 million (RM549.3 million) over three years in new hotel developments and management operations in eight sites in Asia Pacific, including Malaysia. The company aims to have 30 properties under management by the end of 2013, up from the current five. The bulk of the properties will operate under its own brands - Zinc City, Glow Studios, Zinc Edge, Zinc Living, Zinc Journey, Soma and Touch by Zinc.

In Malaysia, it will manage the Rice Miller Hotel & Residence in George Town, Penang, and Soma Lepa & Lepa, off Sipadan Island in Sabah, by end-2013.

The 70-room Rice Miller and the Soma Lepa & Lepa, which will have 80 to 100 rooms, are at the design stage. They will be built for RM230 million (RM701.9 million) and RM150 million (RM457.8 million).

Rice Miller is owned by Asian Global Business Sdn Bhd, controlled by Dr Noraini Abdullah, who was formerly in charge of Renong Bhd's group corporate communications, while Soma Lepa & Lepa is owned by some low-profile private investors.

Chaudhary said Zinc InVision is looking to manage three more properties here and is identifying suitable properties and locations.

    (ends)

Property deals this year to breach RM100b

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 19, 2011

PROPERTY transactions will surpass RM100 billion this year but the sector will not enjoy 35 per cent growth as it did last year, said a government official.


Growth may be in single digit or below 20 per cent because there will be more people buying low- to medium-end properties resulting from government initiatives under the 2011 Budget.

Datuk Abdullah Thalith Md Thani, director-general of the Valuation and Property Services Department in the Ministry of Finance, said the volume of properties transacted will, however, grow by double digits to more than 350,000.

Between January and November 2010, there were a total of 342,179 properties transacted, worth RM96.78 billion.

Abdullah Thalith thinks there will be more than RM100 million in sales recorded in December, breaching RM100 billion for the whole year.

The RM100 billion mark, a record high for Malaysian properties, would be 35 per cent more than 2009.

In 1998, the value of properties transacted was about RM60 billion, with 5 to 10 per cent growth per annum.

Abdullah Thalith told reporters yesterday in Kuala Lumpur at the 2011 property market outlook summit that the positive economic outlook and the Economic Transformation Programme will drive growth this year.

He said the prime movers will be the redevelopment of the Sungai Besi land, Batu Cantonment army base, Rubber Research Institute land in Sungai Buloh, Matrade project by Naza Group, the 100-storey tower by Permodalan Nasional Bhd and the Mass Rapid Transit project.

"If all these projects can start this year, it will uplift the market. We expect more people to buy low to medium-end properties. We also expect movements in the luxury segment, commercial and industrial," he said.

    (ENDS)

Sluggish outlook for property investment trusts

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 14, 2011

PROSPECTS for real estate investment trusts (REITs) are sluggish as there are fewer Grade A office buildings for sale in Greater Kuala Lumpur.


As such, Rahim & Co managing director Robert Ang reckons there will be fewer REIT launches this year.

"REITs look at investments of above RM100 million. However, there is no good stock in the market. If there are quality assets, most developers will hang on to them as an investment, and probably float their own REITS," Ang said.

"What you have in the market now are assets for sale by trust funds who are cashing out," he said after a briefing on the Malaysian property market outlook in 2011 in Kuala Lumpur yesterday.

Ang said developers may take up property investment as a side income because of scarce land for new projects.

Nevertheless, he expects more launches this year compared with 2010, with prices for landed residential properties increasing by 5 per cent to 10 per cent in choice locations.

But he cautioned that ordinary investors are staying out of the market.

"Fundamentals are not strong for foreign investors to come here. There is oversupply of condominiums in Kuala Lumpur. The vacancy rate is 30 per cent and rentals are softening. I do not foresee a major price increase for the next one to two years," he said.

Ang said developers are still launching condominiums in Kuala Lumpur despite an oversupply situation and sales have been brisk as prices are 20 per cent less from the peak.

Meanwhile, Rahim & Co founder and executive chairman Datuk Abdul Rahim Rahman said the Malaysian property market will do better this year, led by projects under the Economic Transformation Programme.

Abdul Rahim expects more demand for residential, commercial, industrial and retail properties.

He said projects like the Sg Buloh land and Sg Besi airport redevelopment, the Matrade project by Naza Group, the Kuala Lumpur International Financial District and the 100-storey tower by Permodalan Nasional Bhd will contribute to growth in the property sector over the next few years.

"There would not be a nationwide phenomenon of property bubble," he said.

   (ends)