YTL in talks to buy Spanish trains for klia2

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 27, 2013

CHEAPER OPTION: CAF and Talgo among potential manufacturers, say sources

YTL Corp Bhd is in talks with Spanish manufacturers to buy up to four train sets worth some RM150 million to serve the Kuala Lumpur International Airport 2 (klia2), sources said.

The company has a 30-year concession, held via 50 per cent-owned unit Express Rail Link Sdn Bhd (ERL), to operate the KLIA Express and KLIA Transit on the railway line between KL Sentral in Brickfields and the Kuala Lumpur International Airport.

The railway line is currently served by 12 electric high-speed trains. The trains were acquired from German-based Siemens AG.

ERL is extending the railway line to link it to klia2 for about RM100 million.

Business Times understands that YTL is seeking less expensive trains to add to its current fleet and for future growth.

ERL chief executive officer Noormah Mohd Noor said in May that the railway line extension will increase ridership by 40 per cent to 7.4 million.

"Trains supplied by Siemens cost 30 per cent more than its competitors and YTL wants to keep spending low. It is sourcing for cheaper trains," sources said.

YTL, controlled by Tan Sri Francis Yeoh, plans to acquire between two and four train sets, each comprising four coaches.

The acquisition will be financed with internal funds and bank borrowings, a source said.

The source said key officials from YTL and Noormah were in Spain last week to negotiate contracts with the manufacturers that include CAF and Talgo.

He said several manufacturers in China such as China South Railway have also offered proposals to YTL to buy their trains.

"YTL may buy the trains either from Spain or China. The deal is expected to conclude around October this year. The trains will be delivered in the next 20 months," the source said.

Malaysia Airports Holdings Bhd said recently that klia2 will open in April next year.

The ERL station at klia2 will be located at the gateway@klia2, the transportation hub cum mall.

PKNS willing to settle out of court

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 27, 2013

ROOM FOR NEGOTIATIONS: Company will sell stake in PJ Sentral Devt to Nusa Gapurna if the price is right, says source

PKNS Holdings Sdn Bhd is willing to sell its stake in PJ Sentral Development Sdn Bhd (PJSD) to Nusa Gapurna Development Sdn Bhd (NGD) if the price is right, settling their dispute out of court.

"Although PKNS has filed the case in the court, there is still room for negotiations between the PJSD shareholders. PKNS has not put a stop to anything. It is willing to settle out of court provided it gets a fair value for its share in PJSD," said an industry source.

PKNS officials declined to comment when contacted by Business Times. PKNS Holdings is a wholly-owned subsidiary of PKNS, the Selangor state development corporation.

PJSD is a 70:30 joint venture company between NGD and PKNS Holdings. NGD is in turn 60 per cent owned by Gapurna Sdn Bhd (GSB) , and 40 per cent by the Employees Provident Fund (EPF).

The company is developing PJ Sentral on a 4ha site in Petaling Jaya, Selangor.

The source said property experts value PJ Sentral at more than RM300 million. This means that PKNS' 30 per cent share in the project should be worth slightly more than RM100 million.

The estimated gross development value for the project comprising mainly office towers is about RM3 billion.

Both PKNS and NGD are now in a battle for PJ Sentral.

NGD had entered into a share sale agreement (SSA) with Malaysian Resources Corp Bhd (MRCB), which is 42.2 per cent owned by EPF, to sell some of its assets including PJSD, for RM814 million.

However, it was claimed that NGD did not obtain prior consent from PKNS to sell PJSD. PKNS argued that by entering into an SSA with MRCB, NGD had triggered PKNS' pre-emption rights with respect to the former's shares held in PJSD under the shareholders' agreement between NGD, PKNS and PJSD.

NGD offered PKNS around RM86 million to buy the latter's 30 per cent stake in PJSD but PKNS rejected.

It is understood that PKNS made a counter offer to buy NDG's 70 per cent share in PJSD for RM220 million but this was rejected by the company.

PKNS filed a suit last Wednesday to block PJSD's sale to MRCB on grounds that NGD had breached a shareholders' agreement between the two companies.

GSB director Mohd Imran Mohamad Salim told Business Times last week that NGD expects the deal with MRCB to conclude in the next three to six months.

"This would depend on what the lawyer says and how they want to pursue the matter with PKNS," said Imran, who is also MRCB's group chief operating officer.

Dewina targets to double sales to RM40m

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 26, 2013

DEWINA Food Industries Sdn Bhd (DFI), an affiliate of Brahim's Holdings Bhd, plans to double its sales to RM40 million next year, led by three new products, including nasi lemak.

DFI, founded by Datuk Ibrahim Ahmad Badawi, currently records annual sales of RM20 million, which comprise ready-to-eat meals and ready-to-use sauces marketed under the Brahim's brand in more than 20 countries.

The new products are ready-to-eat rice meals such as nasi lemak, mushroom-and-cheese rice and chicken fried rice.

The rice meals, manufactured in DFI's plant in Bangi, Selangor, are the result of two years' research and development, said Ibrahim.

DFI is targeting to sell 1,000 packs of rice meals a day at local hypermarkets and supermarkets and will retail them at between RM9.90 and RM11.90 each.

"This will give us around RM5 million in sales for the first year. We expect the figures to double once we start to export the meals next year," Ibrahim told Business Times at the product launching ceremony yesterday.

DFI will be the first Malaysian company to export nasi lemak.

"We have a range of food products. But customers are looking for convenience when they go overseas. They want pre-cooked meals that are lightweight and easy to prepare. "There are many Malaysians living in countries where we have a presence in and they, too, will be looking forward to the new products, especially the nasi lemak and chicken fried rice," said Ibrahim.

DFI's products are available in Europe, the United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Vietnam, Cambodia and Bangladesh.

New markets include the Middle East, China, Taiwan, Hong Kong, South Korea, Indonesia, the Philippines and South America.

The products are regarded as premium and unique within the food industry because they are natural and do not contain artificial flavours, colours or preservatives.

Prolintas to invest RM8b in 2 new highways

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 26, 2013

The projects are the Damansara-Shah Alam Elevated Expressway and the Sungai Besi-Ulu Klang Elevated Expressway.

KUALA LUMPUR: Projek Lintasan Kota Sdn Bhd (Prolintas) is preparing a RM8 billion war chest to build two new highways in Peninsular Malaysia, said industry players and analysts who cover the construction sector.

Business Times was told that works on the infrastructure projects can take place within the next 12 months as Prolintas has already secured the concessions.

The projects are the Damansara-Shah Alam Elevated Expressway (DASH) and the Sungai Besi-Ulu Klang Elevated Expressway (SUKE).

Sources said Prolintas is working on the best financial model for the projects, addressing two core issues, namely the cost of compensation for businesses that may have to relocate before actual construction work begins, and the cost of construction materials, which has been volatile with a northward bias.

As at press time, Prolintas chief executive officer Zainudin A. Kadir did not respond to questions sent by Business Times.

Analysts said the construction sector is excited about new jobs coming on stream, including the light rail transit extension and the MY rapid transit (MRT) Line 1, but there are concerns about rising building material costs.

"The industry has to watch out for the sand price, which is rising," Edmund Tham, the head of research at Mercury Securities, told Business Times

Building material prices for components like bitumen, gravel and steel, in some cases, have risen over 100 per cent in one year, thanks to the big-ticket MRT Line 1, a RM23 billion project that aims to create an underground rail network in the city centre that links to Sungai Buloh and Kajang.

The Prolintas projects are expected to tighten demand for building materials and create a scramble among heavyweight construction companies for a piece of the action.

Among companies associated with heavy infrastructure jobs are IJM Corp Bhd, MMC Corp Bhd, Gadang Holdings Bhd and Bina Puri Holdings Bhd.

Prolintas, the country's second biggest highway concessionaire, is a unit of Permodalan Nasional Bhd, Malaysia's biggest fund management company.

It operates and manages the Ampang-Kuala Lumpur Elevated Highway (Akleh), the Guthrie Corridor Expressway and the Kemuning-Shah Alam Highway.

DASH and SUKE are two of seven highway projects estimated to cost about RM19 billion to be developed under the 10th Malaysia Plan (2011-2015).

DASH will start at the Puncak Perdana U10 Shah Alam intersection and serve as a link for Puncak Perdana, Alam Suria, Denai Alam, Kampung Melayu Subang, Jalan Sungai Buloh, the Rubber Research Institute of Malaysia, Kota Damansara, Damansara Perdana and Mutiara Damansara.

The 20.1km three-lane, dual carriageway will end at the Penchala interchange.

SUKE will link major highways in the eastern Klang Valley, including the Duta-Ulu Kelang Expressway, Akleh, Besraya, the Kuala Lumpur-Seremban Highway, the Cheras-Kajang Highway, Kesas and MRR2.

The 31.8km, three-lane elevated expressway will start in Sri Petaling and pass through Sungai Besi, Alam Damai, Cheras-Kajang, Taman Bukit Permai, Taman Putra, Taman Permai Jaya, Taman Dagang Permai, Taman Kosas, Ampang and Taman Hillview, and exit at Ulu Kelang.

MRCB to undertake high-value projects

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 25,2013

BIGGER PROFIT MARGINS: Focus will be on niche, specialised areas such as environmental construction
MALAYSIAN Resources Corp Bhd (MRCB) will move into high-value construction with higher profit margins to drive the company forward, says group chief operating officer Mohd Imran Mohamad Salim.

"We will focus on niche, specialised areas, such as environmental construction. These would involve rehabilitation projects and coastal rehabilitation works. There are not many competitors in these areas. In building construction, there are competitors everywhere and margins are going lower," he said in an interview here recently.

Imran said MRCB will also diversify its property development activities to include niche projects and build more investment assets for higher recurring income.

Currently, MRCB is involved in the RM11 billion KL Sentral transport hub in Brickfields, Kuala Lumpur. Its other ongoing projects are Puncak Iskandar in Johor and Taman Kajang Utama in Kajang, Selangor.
For fiscal year 2012, MRCB's net profit slipped to RM60.12 million from RM93.52 million a year earlier, while revenue was marginally higher at RM1.28 billion from RM1.23 billion previously.

The group's property development and investment activities are currently the main contributors to the company's net profit and revenue.

Imran said MRCB will launch a roadmap next year, which will set the company's business direction and new strategies.

The plan is to have one-, three-, six- and 10-year roadmaps.

"In the current business environment, we must have a roadmap every two to three years to direct the company forward. We also need to be transparent and create value for our shareholders," he said.

Imran said under its new leadership, MRCB will be a growing company with a new business settings.

Business Times has reported that Imran's father, 55-year-old Datuk Mohamad Salim Fateh Din, the founder of Gapurna Sdn Bhd (GSB), will head MRCB as its group managing director by year-end.

GSB is also set to take a 16.8 per cent stake in the property group, following an asset injection exercise recently approved by shareholders.

MRCB is buying assets worth RM814 million from Nusa Gapurna Development Bhd (NGD). This includes taking full control of PJ Sentral Development Sdn Bhd (PJSD).

PJSD is developing the multi-billion ringgit PJ Sentral project in Petaling Jaya, a 70:30 joint venture between NGD and the Selangor State Development Corp.

Both MRCB and NGD share a common shareholder - Malaysia's largest pension fund, the Employees' Provident Fund.

Sumatec sees RM1b revenue by 2015

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 22, 2013

ON TRACK TO PROFIT: Company banking on oil and gas field in Kazakhstan
Sumatec Resources Bhd should be debt-free by August and achieve its RM1 billion revenue target within three years, says its major shareholder Tan Sri Halim Saad.

The company is banking on its Rakushechnoye oil and gas field in Mangystau, Kazakhstan, to put it on a solid profit path.

It has a Joint Investment Agreement with Markmore Energy (Labuan) Ltd and CaspiOilGas LLP for the commercial development and production of the Rakushechnoye field.

Markmore Energy and CaspiOilGas, the company that holds the concession for the field up to 2025, are controlled by Halim.

Sumatec will be investing US$95 million (RM304 million) initially to develop the field, starting on October 1.

It expects to recoup the investment after production hits two million barrels of oil by the third quarter of 2015, Halim said after the company’s extraordinary general meeting (EGM) here yesterday.

The company is projecting a net profit of RM86 million this year and RM69 million in fiscal year 2014. Net profit will be lower next year as it makes more investments.

Halim, who owns 25 per cent of Sumatec, said the next step for the company, following the completion of its restructuring exercise, is to grow its assets and income base.

With the restructuring, Sumatec will transform from an exploration service provider and shipping company into an exploration and production operator.

It is also raising RM452 milion in cash and through a new share and rights issue to pay of debt and for use as working capital.

The company’s shareholders yesterday approved all the resolutions tabled at the EGM.

Sumatec, which expects to exit Practice Note 17 status by mid-2014, will focus on acquiring mature oil and gas assets in Kazakhstan, Halim said.

“Malaysia is all offshore when it comes to oil and gas. In Kazakhstan, there is much lower capital and operating expenditure while earnings are higher.

“The net profit margin for a barrel of oil in Kazakhstan is around US$40 while in Malaysia, it’s about three to four times less,” he added.

Halim, who does not want to be dubbed a white knight, said he bought into Sumatec because of its potential upside.

“This is a good vehicle to expand in the sector.

The company has been involved in O&G (oil and gas) and shipping. They have also done constructionin O&G,” he said.

MRCB gets nod for NGD buy

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 21, 2013

RM814m DEAL: Gapurna will have a combined 16.8pc stake in enlarged entity and EPF 38.4pc

Malaysian Resources Corp Bhd (MRCB) shareholders have given their nod to the company’s plans to buy assets worth RM814 million from Nusa Gapurna Development Bhd (NGD).

This paves the way for Gapurna group owner Datuk Mohamad Salim Fateh to helm MRCB.

Business Times understands that Salim, Gapurna Sdn Bhd’s (GSB) founder, will be appointed as MRCB group managing director as early as in the fourth quarter of this year.

His 31-year-old son, Mohd Imran Mohamad Salim, is currently MRCB group chief operating officer.

After the proposed acquisitions, GSB will have direct and indirect interests of 16.8 per cent of the enlarged MRCB while the Employees Provident Fund’s (EPF) stake will be diluted to 38.4 per cent from 42.2 per cent.
MRCB is developing the RM11 billion KL Sentral transport hub in Brickfields, Kuala Lumpur. NGD is a 60:40 joint venture company between GSB and the EPF.
At the MRCB extraordinary general meeting (EGM) yesterday, more than 92 per cent of the 1,500 shareholders who attended passed all of the resolutions, including buying a 100 per cent stake in PJ Sentral Development Sdn Bhd (PJSD) for RM284.3 million.
PJSD, which is developing the multi-billion ringgit PJ Sentral project in Petaling Jaya’s Section 52 in Selangor, is a 70:30 joint venture between NGD and the Selangor Economic Development Corp (PKNS).
PKNS, however, is not selling its share in the project. Instead, it is offering to buy NGD’s 70 per cent stake in PJ Sentral but the company rejected it PKNS filed a suit on Wednesday to block the sale of PJ Sentral to MRCB on the grounds that NGD had breached a shareholders’ agreement on the project between the two companies and that MRCB had “intentionally or recklessly procured a breach of the shareholders’ agreement”.
MRCB chairman Tan Sri Azlan Zainol said after the EGM he hopes that the deal will work out and the matter resolved amicably.
“This is a shareholders’ dispute and we (MRCB) are involved in the suit as a purchaser and PKNS is acting in good faith. If we can settle it out of court, we certainly will do so,” he said.
According to transaction adviser Wong Muh Rong from Astramina Advisory, the deal is set to be completed by the fourth quarter of this year.
“As far as NGD is concerned, they’re just monetising their investments in PJ Sentral and converting that into MRCB shares,” she said.
MRCB was down two sen, or 1.29 per cent, to close at RM1.53 yesterday.

Eversendai shares undervalued

By Sharen Kaur
sharen@mediaprima.com.my
Published by NST on June 20, 2013

TAN Sri AK Nathan, the founder of Eversendai Corp Bhd, says the company is undervalued by the market.

On a year-to-date basis, Eversendai shares, which are listed on the Main Market, are down by 12.35 per cent, while the all blue-chip FTSE Bursa Malaysia KLCI (FBM KLCI) is up by 17.67 per cent during the same period.

The slide in Eversendai's share price comes at a time when the broader market has been on a record-breaking feat this year, with the FBM KLCI surpassing the 1,700 points for the first time in its history.

Nathan owns 70.52 per cent of Eversendai, while the Employees Provident Fund and Lembaga Tabung Haji hold 8.52 per cent and 5.11 per cent stake in the company, respectively.

Eversendai shares closed at RM1.49 yesterday, while the FBM KLCI eased 1.170 points to end at 1772.88 points. 

"The current share price does not reflect the company's true business potential and track record," said Nathan.

Data obtained from Bloomberg show that all the eight research firms that track Eversendai recommend investors to buy the stock.

However, the company's first-quarter results for the period ended March 31 2013 was a disappointment, with group level pre-tax profit dropping to RM24.45 million from RM31.25 million in the same period a year ago.

Nathan is optimistic of the firm reaching its RM2 billion revenue target and doubling its profit by 2017 .

"I foresee the company's net profit and revenue to increase progressively from 2014, driven by new building and construction projects and our venture into oil and gas. We are diversifying and moving into new territories such as eastern Africa and Australia," he said.

The company's outstanding order book is RM1.5 billion, which translates into 1.5 times fiscal year 2012 revenue and 1.3 times order book-to-market cap ratio. 

Eversendai is in the process of bidding for structural steel, petrochemical and power plant construction jobs, and oil and gas fabrication worth up to RM8 billion. The projects are mainly in Azerbaijan, Saudi Arabia, Qatar, Oman, Dubai, Abu Dhabi, Sri Lanka, India, Singapore and Malaysia.

IGB plans to inject Johor assets into REIT in 5 years

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 20, 2013

KUALA LUMPUR: IGB Corp Bhd is set to grow its real estate investment trust (IGB REIT), currently valued at RM4.5 billion, by injecting assets from its property development ventures in Johor in about five years.

Group managing director Robert C.M. Tan said it is in IGB's plan to retain some assets to diversify its recurring income base.

"We do not have large tracts of land like other developers, that is why we are looking at other avenues such as recurring income to improve our earnings.

"Over the years, we have built our infrastructure and we can now manage hotels and malls ourselves. When we retain the assets, there is a possibility to inject some of them into a REIT. And when we do that, the value of the REIT will go up," Tan said.
IGB has two projects in Johor, valued at between RM8 billion and RM9 billion.

The first project is a RM6 billion mixed development dubbed Southkey Mega Mall, slated to commence construction this year.

IGB will jointly develop the project, the exact replica of Mid Valley Mega Mall here, with privately-held developer Selia Pantai Sdn Bhd.

The second project, reportedly called 18@Medini, is a 7.2ha mixed development worth more than RM2 billion in Medini. It will comprise up to four residential towers, an office block, a hotel, and shop units.

IGB will develop 18@Medini jointly with landowner Distinctive Group, which is controlled by Datuk Dr David Koh.

The group inked a deal yesterday to acquire "a 50 per cent plus one share stake" in Distinctive Ace Sdn Bhd for RM33 million.

Distinctive Ace, which has a paid-up capital of RM2 million, will undertake the development of 18@Medini.

"We are submitting our plans for the project and hope to launch it by the end of this year or early next year. We will sell the residential components and retain the rest of the properties," Tan said.

Currently, recurring income contributes about 80 per cent to IGB's net profit. The rest comes from its property development activities.

For fiscal year 2012, IGB registered a net profit of RM180.2 million.

Rivo City set to boost Brickfields property prices

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 18, 2013
THE RM1.3 billion Rivo City project in Brickfields, here, is set to drive up property prices in the area which are hovering at about RM550 per square ft (psf).

Bina Puri Holdings Bhd, the country's sixth biggest construction company by revenue, is launching Phase 1 of Rivo City in early 2014.

Its executive director, Matthew Tee Kai Woon, said the commercial and residential properties at Rivo City will be pegged at between RM700 psf and RM900 psf.

However, he said the company may raise the selling price for the properties, depending on demand.
"If you compare Rivo City with the developed areas at Kuala Lumpur Sentral, the properties there are currently priced between RM1,300 psf and RM1,500 psf. Quill 7, located next to St Regis, is selling at around RM1,200 psf.

"Our project is situated opposite the KL Sentral and we are pricing the properties according to the current market price in that area," Tee said recently.

Rivo City project is located near Methodist College on Jalan Tebing, the KL Monorial project office and Kuen Cheng High School.

Rivo City is a mixed development project consisting of four high-rise towers. It will feature 1,660 units of small office versatile office (SoVo) in three towers and a 22-storey serviced suite units.

Supporting the development is a three-storey commercial podium, which will accommodate the proposed new monorail station, a retail centre, food outlets and roof garden.

Rivo City is a joint venture development between Bina Puri and landowner Syarikat Prasarana Negara Bhd. Prasarana is the asset owner and operator of Klang Valley's LRT, monorail and public bus services.

Bina Puri won the bid to develop the 1.85ha land under a public-private partnership. Under the deal, Bina Puri will also market and sell the properties in Rivo City.

Tee is bullish on Rivo City, adding that the attractions would be the project's location and accessibility.

Bina Puri is planning to build a road from the Federal Highway to link to the project.

"We are currently talking to bankers for funding and we expect to finalise something within this month," he said.

PNB eyes Japan, Korean firms for RM5b tower job

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 18, 2013

PERMODALAN Nasional Bhd (PNB) is targeting Japanese and South Korean companies to help develop its RM5 billion Warisan Merdeka tower project.

PNB is expected to call for pre-qualifying bids for the project in the third or fourth quarter of this year, people with direct knowledge on the matter said.

A source said at least five consortiums, comprising local and foreign firms, are preparing to make the bid.

“PNB has indicated that it prefers Malaysian contractors to partner South Korean and Japanese companies for the job. The chances will be higher but the bidding will be very competitive,” the source said.

He added that PNB will be appointing foreign consultants, engineers and designers for the project.

When Malaysia decided to build the Petronas Twin Towers in 1990s, big foreign names were involved in the development.

A Japanese consortium led by Hazama Corp (JA Jones Construction Co, MMC Engineering Services Sdn Bhd, Ho Hup Construction Co Bhd and Mitsubishi Corp) were involved in the construction of Tower 1.

A South Korean consortium led by Samsung C&T Corp (Kukdong Engineering & Construction and Syarikat Jasatera Sdn Bhd) constructed Tower 2.

Malaysian firm Eversendai Corp Bhd, founded by Tan Sri A.K. Nathan, provided the steel structures for Tower 2 while César Pelli, an Argentine architect, designed the entire project.

The 7.7ha Warisan Merdeka tower project, sited on the carpark and land adjacent to Stadium Negara and Stadium Merdeka, will be funded by PNB.

PNB has formed PNB Merdeka Ventures Sdn Bhd as a wholly-owned unit to undertake the project on the land, which it bought from Pengurusan Danaharta Nasional Bhd in 2000 for RM310 million or RM220 per sq ft.

PNB Merdeka is headed by Tengku Abdul Aziz Tengku Mahmud, who was formerly from Guthrie Property Development Holding Bhd and Sime Darby Property Bhd.

The Warisan Merdeka Tower project will feature a 118-storey building, a hotel, mall and residences, to be undertaken over a 10-year period.

When completed, the Warisan Merdeka tower will be the tallest building in Malaysia, superseding the 88-storey Petronas Twin Towers.

UEM Sunrise eyes more land in Nusajaya

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 14, 2013

UEM Sunrise Bhd is eyeing more land adjacent to the Mall of Medini in Nusajaya, Johor, which will see the gross development value (GDV) of the whole project exceeding RM4.5 billion.

The property developer, formerly known as UEM Land Holdings Bhd, has built and completed Phase 1 of Mall of Medini, which is situated next to Legoland Malaysia.

Phase 1 comprises a 200,000 sq ft mall, which opened its doors to the public in September last year.

Phases 2 and 3 of the project, comprising the mall extension, Grade A office towers and residences, is slated to start by the end of this year, UEM Sunrise managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said.

"We plan to start Phases 2 and 3 this year. We are currently waiting for the necessary approvals. The GDV for the project is slightly over RM4 billion. With the additional land that we are planning to acquire, it would exceed RM4.5 billion.


"The whole development will have 3.5 million sq ft of properties. The mall portion alone will be 1.2 million sq ft when it is developed," Wan Abdullah told Business Times on the sidelines of Invest Malaysia yesterday.

Wan Abdullah expects the entire development, including the offices and residences, to be completed by end-2017 or early 2018.

He said the key ingredient to Mall of Medini's success is its strategic location. Mall of Medini is the lifestyle, entertainment and recreational epicentre of Nusajaya, which is one of the five key development centres of Iskandar Malaysia.

The project is located near signature developments such as Kota Iskandar, Puteri Harbour, Horizon Hills and Educity, as well as other residences in Nusajaya.

UEM Sunrise, the property development arm of UEM Group Bhd, is the master developer of the 9,661ha Nusajaya, which is Malaysia's first economic growth corridor in Johor and one of the flagship zones in Iskandar Malaysia.

The group owns around 4,200ha in Nusajaya and is currently building homes, waterfront properties, offices, hotels, factories, hospitals and campuses, in a joint venture with several other developers.

Wan Abdullah said the next wave of growth in Nusajaya will be led by the 1,800ha Gerbang Nusajaya, a RM18 billion greenfield development.

UEM Sunrise to boost investment assets

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 15, 2013

UEM Sunrise Bhd, the country's largest property developer by market capitalisation, is building its investment assets to improve its recurring income stream.

The company, formerly known as UEM Land Holdings Bhd, is planning to launch a real estate investment trust (REIT).

Its managing director and chief executive officer, Datuk Wan Abdullah Wan Ibrahim, said the company is pursuing a REIT but the plan will not be immediate.

"We have to grow our recurring income. Property development goes through boom and bust. When the sector goes through depression and down cycle, having recurring income will be important.

"The other option is to buy a company that has investment assets in place. That would be very bold. But I don't think we would do that as we want to build our own assets," he said at a media briefing on the company's rebranding exercise on 14 June.

Wan Abdullah said UEM Sunrise currently has good-yielding assets, such as Publika in Solaris Dutamas (Kuala Lumpur), as well as Mall of Medini and industrial properties at Bio-XCell, a biotechnology park (both in Nusajaya, Johor).

Mall of Medini is undergoing expansion, in which the current 200,000 sq ft mall will be extended to 1.2 million sq ft. The expansion will include office and residential towers.

UEM Sunrise also owns a 8ha plot next to Masjid Wilayah Persekutuan here, where a luxurious development is in the pipeline, he said.

"Once we have these properties, and yielding good income, we will monetise the assets and establish a REIT and manage it. This would give us recurring income," he said.

On the rebranding of UEM Land to UEM Sunrise and the integration of the two companies (UEM Land and Sunrise Bhd), he said the aim is to have a global brand and develop a multitude of large-scale projects, including high-rise buildings.

UEM Sunrise plans overseas inroads

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 13, 2013

ACHIEVING GROWTH TARGET: Firm eyes S. Africa, Australia, India and Indonesia
UEM Sunrise Bhd, formerly UEM Land Holdings Bhd, is making inroads into South Africa, Australia, India and Indonesia to drive its revenue and net profit.

The group is also increasing its investment assets, which now contribute eight per cent to its earnings.

For fiscal 2012, UEM Sunrise recorded revenue growth of 14 per pent to RM1.94 billion, while net profit increased by 49 per cent to RM448.4 million.

The compound annual growth rate for the group's revenue and net profit has been around 40 per cent over the past five years. Sales have grown steadily by 77 per cent annually since 2008, led by developments in Nusajaya in Johor.

"We have growing appetite to increase our numbers... our group is not going to rest on its history. It needs to sustain growth and recurring income. We will look at more geographics, landbanks and recurring income assets.

"To achieve our growth targets, we need to explore other markets. We have identified several areas in Australia and India. Work is in progress," UEM Sunrise managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said.

In Indonesia, the group is targeting Jakarta, while in South Africa, it has around 16ha of land in Durban acquired several years ago, he said after the group's shareholders meeting here yesterday.

Wan Abdullah said for overseas jobs, UEM Sunrise will be banking on high-rise developments, townships and integrated projects.

For the Durban land, he said the group may either sell or develop it.

On the name change to UEM Sunrise, its chairman Tan Sri Dr Ahmad Tajuddin Ali said it is to reflect the strength of the UEM and Sunrise brands.

UEM Land bought Sunrise Bhd in 2010 for RM1.39 billion to strengthen its portfolio.

"We needed expertise that Sunrise brings, particularly with our venture in Singapore to assist Khazanah with the two nation's initiatives," he said.

Khazanah and Singapore's Temasek Holdings are developing projects in Marina South and Ophir Rochor, worth over S$11 billion.

The project managers for both the developments include an indirect wholly-owned unit of UEM Sunrise, the real estate arm of Khazanah.

KUB denies klia2 deal terminated

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 8, 2013

RM268.8m JOB: Company says 80pc of work already completed

KUB Malaysia Bhd said yesterday Malaysia Airports Holdings Bhd (MAHB) has not revoked its contract for the Kuala Lumpur International Airport 2 (klia2) project in Sepang, Selangor. The company was responding to a report issued by the research unit of Maybank Bhd.

“KUB Builders was reported to be behind schedule in its contract to build the runway and taxiway. MAHB had no choice but to take ownership of this portion of work and pass it to other able contractors to finish the job,” Maybank Investment Bank research analyst Mohshin Aziz wrote in a report this week.

KUB Builders, a unit of KUB Malaysia, was awarded a RM268.8 million contract in October 2011 to build the 3.96km third runway, parallel connecting taxiways and other associated work at the new low-cost carrier terminal.

KUB group managing director Datuk Wan Mohd Nor Wan Ahmad denied that the contract had been revoked.

“It is not true. MAHB did not revoke KUB’s contract on klia2. If it did, why are we still there doing our work and discharging our contract obligations?” he told Business Times via email.

Wan Mohd Nor said KUB Builders is on target to finish its work, with 80 per cent already completed to date.

Contractors involved in the klia2 project have come under fire for delaying the airport’s opening.

The opening of klia2 has now been delayed for the fourth time.

It was supposed to open on June 28 but may now only begin operations next year.

Meanwhile, WCT Bhd, which is building the RM530 million “gateway@klia2” complex, said it is not among the contractors delaying the airport’s opening.

“The opening of gateway@klia2 will be concurrent with klia2,” said a company spokesperson.

Gateway@klia2 comprises a transportation hub for taxis and buses, a commercial building with a net lettable area of 350,000 sq ft, and car parks with up to 6,000 bays.

WCT and MAHB hold a 70:30 equity interest, respectively, in the concession for gateway@klia2.

Marina Bay units open for Malaysian buyers

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 13, 2013

KUALA LUMPUR: The developers of Singapore's S$4 billion (RM9.96 billion) Marina Bay Financial Centre (MBFC) are offering Malaysians a chance to own apartments, priced between S$6 million and S$10 million each, at the 66-storey Marina Bay Suites.

Thomas Tan, head of residential marketing at Raffles Quay Asset Management Pvt Ltd (RQAM), said Malaysians should take advantage of this opportunity as the apartments are the last few available.

The Marina Bay Suites is part of MBFC, which opened in 2006. It is the last product offering within the development.

Marina Bay Suites comprises 221 units of three- and four-bedroom apartments and three penthouses.

The company, however, is only offering 23 units of the four-bedroom apartments and two penthouses, which are worth S$50 million collectively.

This is because RQAM, which was set up by the developers to market and manage MBFC, has been releasing the units progressively since 2011.

The company has so far sold 89 per cent of the units with Singaporeans buying half of them. The rest were taken by foreigners, with Malaysians having purchased 30 units, Tan said.

MBFC, which will be completed soon, is a joint development by Cheung Kong (Holdings) Ltd, Hong Kong Land and Keppel Land Ltd.

It comprises three office towers that are under a long-term lease, two residential blocks, namely Marina Bay Suites and Marina Bay Residences, and a mall.

"Some high net worth people in Malaysia and overseas are looking for trophy apartments in Singapore. We are upbeat on selling the remaining units within this year," Tan said yesterday.

Tan said property buyers are attracted to MBFC because of its water frontage and location. MBFC is located within the 360ha Marina Bay development.

He said these features have led to property prices in Marina Bay Residence increasing since its launch in 2006.

Marina Bay Residence offered 428 apartment units that were sold out within three days of launch at around S$1,900 per sq ft (psf).

"The resale market for the units has breached S$4,000 psf," Tan said.

Sunway plans world-class Johor amusement parks

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 13, 2013

SUNWAY Bhd, controlled by Tan Sri Jeffrey Cheah, plans to build world-class amusement parks at its two project sites in Johor.

Sunway owns 752ha in Medini and Pendas in Iskandar Malaysia, which can easily generate more than RM30 billion in gross development value (GDV).

The company is planning to develop an education hub, amusement parks, malls, hotels, residences, offices and hospitals there.

According to Bill Holman, the consultant director for Sunway Lagoon Sdn Bhd (SLSB), the new amusement parks, which will be the first of their kind in Malaysia, will be built on par with international standards.

Among the world's most notable theme parks are Universal Studios, Disneyland, Knott's Berry Farm and Six Flags Magic Mountain (United States); Dreamworld and Warner Bros Movie World (Australia); Alton Towers (United Kingdom); PortAventura (Spain); Tivoli Gardens (Copenhagen) and Europa-Park (Germany).

Holman, however, declined to say if Sunway will replicate any of these amusement parks or other models.

"We are currently working on the design and concept. There will be a theme park and an eco park.

"We will take advantage of the natural surrounding with full control of river-front development on both sides of Sungai Pendas, sea front and the natural mangrove forest.

"We will look at ways to preserve these natural elements and build the theme parks around that. Visitors will be both entertained and educated," he said in an interview.

SLSB is a unit of Sunway that operates the Sunway Lagoon theme park in Bandar Sunway, Selangor. Holman is one of the founding fathers of Sunway Lagoon.

Under a company called Australia Leisure Industries (M) Sdn Bhd, Holman designed and helped to develop Sunway Lagoon, which commenced operations in 1990.

Other notable projects under his belt include Starhill water park in Johor Baru, Bukit Merah Laketown in Perak, Clarke Quay adventure ride in Singapore, and several other projects in Indonesia, Hong Kong and China.

Holman also helped to develop the Lost World of Tambun at Sunway City in Ipoh.

Eversendai targets jobs worth RM10b

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 10, 2013

GLOBAL REACH: Company sees opportunities aplenty in Middle East and Singapore, among others
Structural steel turnkey and power plant contractor Eversendai Corp Bhd is bidding for projects worth about RM10 billion, some of which are construction jobs in Singapore.

Executive chairman and group managing director Tan Sri A.K. Nathan said Eversendai is also bidding for projects in Azerbaijan, Saudi Arabia, Qatar, Oman, Dubai, Abu Dhabi and Sri
Lanka.

He said Eversendai is focusing on Singapore after a long absence because of the number of building projects that are coming up.

“There is huge amount of opportunity to build iconic structures, especially in Singapore, Saudi Arabia, Qatar and Azerbaijan,”
Nathan told Business Times in an interview.

The group’s order book stands at RM1.6 billion, which will keep it busy for the next two years. Most of the current projects are in the Middle East, with Malaysia making up only 25 per cent.

This year alone, Eversendai has won contracts worth around RM500 million.

“The current scale of our order book will provide excellent visibility of future revenue stream for the group. We are confident of a robust 2013,” he said.

Since its set-up more than 30 years ago, the company has completed more than 120 notable jobs worth billions of ringgit in Malaysia, Singapore, the Middle East, the Philippines, Indonesia and Thailand.

Eversendai’s maiden project in Singapore was a job in 1988 to fabricate and erect structural steel work for the Singapore Indoor Stadium.

Following the project, the company was awarded contracts for the Pulau Seraya Power Station Stage II, the amphitheatre for the Jurong Bird Park and the 66-storey Republic Plaza.

The Main Market-listed Eversendai is 70.52 per cent-owned by Nathan while the Employees Provident Fund has a 8.85 per cent stake.

Nathan said the company is on track to hit its RM2 billion revenue target by 2017.

For fiscal year 2012, it posted a net profit of RM121.5 million on revenue of RM1.02 billion.

Eversendai reported a net profit of RM23.7 million for the first quarter ended March 31 2013 on revenue of RM243.2 million.

DRB-HICOM to redevelop Proton’s Shah Alam plant

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 4, 2013

PRODUCTION COMPLEX: Integrated project may have estimated GDV of RM4b

DRB-HICOM Bhd plans to redevelop Proton’s manufacturing complex in Shah Alam into an integrated development that will generate around RM4 billion in gross development value (GDV).

According to Previn Singhe, founder and chief executive officer of Zerin Properties, a GDV of RM4 billion is achievable, depending on the density and types of properties that DRBHICOM plans to build.

He said a RM4 billion GDV would net DRB-HICOM a margin of 20 to 30 per cent, or between RM800 million and RM1.2 billion.

This is about 20 to 30 per cent of what DRBHICOM paid for national carmaker Proton Holdings Bhd.

DRB-HICOM, controlled by the Albukhary Foundation, took over and privatised Proton in a deal worth RM3.02 billion early last year.

Proton owns the 100ha complex, which houses its main factory, a smaller multi-vehicle plant, a casting plant as well as an engine machining and assembly building.


Based on book value, the land and building are worth some RM700 million. Commercial land in Shah Alam is currently selling at more than RM100 per sq ft.

Previn said DRB-HICOM may either develop the land in a joint venture with Proton, or buy it outright from the carmaker.

“The best thing is for Proton to sell the land to DRB-HICOM. It would be a great way for the carmaker to monetise its assets. 

Proton will have cash to expand and compete in the global level,”
he told Business Times.

Mercury Securities head of research Edmund Tham thinks DRB-HICOM may build several residential blocks, office towers and retail space.

He said DRB-HICOM can rake in a profit margin of between 40 and 50 per cent if the project has high-end product offerings.

Sources close to DRB-HICOM said it is planning to relocate the complex in Shah Alam to Proton City in Tanjung Malim, Perak.

"The idea to redevelop the site is to boost DRB-HICOM's property development division and future earnings. The move to Tanjung Malim will also help cut costs and make Proton more efficient in production as it consolidates its business," said a source.

The property development division is headed by Datuk Mohamed Razeek Md Hussain, former chief executive officer of Malaysian Resources Corp Bhd.

The division's current landbank has GDV worth around RM2 billion. 

Razeek was not available for comment yesterday.

Proton City, an integrated project worth more than RM11 billion, started operations in 1996. The 1,600ha project is developed by Proton City Development Corp Sdn Bhd, a 60:40 joint venture between DRB-HICOM and Proton.

Proton City comprises the Proton plant, the 120ha Proton Vendor Industrial Park, Universiti Pendidikan Sultan Idris' main campus, and residential and commercial properties.

Bina Puri to raise RM44m capital

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 5, 2013

BINA Puri Holdings Bhd, the country's sixth biggest construction company by sales, held a fund managers' meeting yesterday, ahead of a crucial capital- raising exercise.

For the year ended December 31 2012, Bina Puri posted sales of RM1.28 billion, on revenue which exceeded the RM1 billion mark for the third time in as many years.

"The money is to fund all the projects we are embarking on. We need the capital in order to grow the company," said its executive director Matthew Tee Kai Woon.

Tee's father, Tan Sri Tee Hock Seng, founded Bina Puri nearly four decades ago. The elder Tee, who is group managing director, owns 12.26 per cent of Bina Puri.

Albukhary Foundation holds 15.91 per cent stake in Bina Puri via a private company, Jentera Jati Sdn Bhd.

Analysts say Bina Puri needs to step up the plate if it wants to be ranked alongside the likes of Gamuda Bhd and IJM Bhd. This is because Bina Puri's returns are much lower than its peers'.

Bina Puri's own notes given to fund managers yesterday seem to suggest that there is some truth to this. 

The notes, prepared by Bina Puri and obtained by Business Times, showed that for the nine-month period from January 1 to September 30 last year, its net profit and operating profit margin was one per cent, the industry's second lowest.

On the converse, Gamuda's net profit and operating profit margin stood at 23 per cent and 12 per cent, respectively. IJM's net profit and operating profit margin was 17 per cent and seven per cent while WCT's 13 per cent and nine per cent, respectively.

Bina Puri's current book order is in the RM3 billion range and the unbuilt portion is RM1.68 billion.

"We are very under-capitalised. We intend to go for higher-margin projects," said Kai Woon.

Bina Puri is planning to raise as much as RM44 million, which is about RM12 million more than what the company earned over the past five years, which stood at RM32.3 million collectively.

In the five-year period from 2008 to 2012, the highest single year net profit was RM10.6 million recorded in 2010, and the lowest was RM4.3 million in 2008. In 2012, Bina Puri's net profit was RM5.1 million.

Kai Woon said Bina Puri is dependent on real estate development to improve its bottom line as the company has been silent with launches since 2011. 

However, he said things are about to change, with focus on new property launches in the Klang Valley in the medium- to high-end range.

"We have earmarked to launch RM2.5 billion worth of new projects over the next five years," Kai Woon said.

UEM, Bina Puri seek RM300m from MAHB

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 5, 2013

KLIA2 PROJECT: Joint venture claiming for additional work at main terminal and satellite buildings, says source

The UEM-Bina Puri joint venture (JV) is seeking as much as RM300 million from Malaysia Airports Holdings Bhd (MAHB) for additional works being done at the Kuala Lumpur International Airport 2 (klia2) project, a person with first-hand knowledge of the matter says.

It is learnt that MAHB has requested the joint venture to expand the floor area at the airport’s main terminal and satellite buildings to cater to requirements from various government agencies.

A source said extra floor space is also required at the three-storey main terminal building to cater to Malindo Air, Malaysia’s newest domestic low-cost carrier, which plans to move to klia2 when it opens next year.

The country’s biggest airport operator, however, was adamant on the liquidated and ascertained damages (LAD) charges.

“The LAD will be imposed on contractors who have breached
their contractual obligations,” MAHB said in a statement.

The klia2 was slated to open on June 28 this year, but the
source said it may only operate a year from now.

The UEM-Bina Puri JV won a RM997.2 million contract in June 2010 to build the main terminal and satellite buildings, a sky bridge and four piers. The joint venture commenced work in August 2010 and was slated to complete it by April this year.

UEM Construction Sdn Bhd, a unit of UEM Group Bhd, holds a 60 per cent stake in the joint venture and it is building the main terminal and two piers.

Bina Puri is constructing two piers, the satellite building and the sky bridge.

“The joint venture is taking longer than anticipated to complete its work because of the additional requirements.

They are submitting progressive additional claims to MAHB for the works done,” the source said.

MAHB said last week that it may impose LAD on contractors yet to complete their portions of work on time.

Business Times reported recently that MAHB can impose a LAD of as much as RM200,000 a day on contractors that are late in handing over their work.

At a fund managers briefing yesterday, Bina Puri executive director Matthew Tee expressed confidence that the company will not have to pay LAD to MAHB for the delay.

Tee said MAHB has approached all the contractors involved in the project and will determine soon which parties are responsible for the delay.

"The joint venture has completed 93 per cent of the job. We need a few more months and are confident of handing over the job to MAHB by the fourth quarter of this year," he said.

Tee said Bina Puri has applied for time extension till September or October this year to put the finishing touches on its works at klia2.

Besides UEM, other parties blamed for the delay in the new low-cost terminal are KUB Malaysia Bhd and WCT Bhd.

KUB group managing director Datuk Wan Mohd Nor Wan Ahmad has said its RM268.79 million contract to build Runway 3 and the parallel connecting taxiways is about 80 per cent completed.

Tropicana mulls moving Batu Tiga KTM station

By Sharen Kaur

sharen@mediaprima.com.my

TROPICANA Corp Bhd is considering relocating the Batu Tiga KTM commuter station to its RM6.3 billion flagship project in Subang Jaya, Selangor.

Its group chief executive officer Datuk Yau Kok Seng said the plan is to enhance its development, Tropicana Metropark. 

Tropicana (formerly Dijaya Corp Bhd) is developing Tropicana Metropark over 35.6ha of freehold land at the Subang Hi-Tech Industrial Park. 

Tropicana bought the land, which borders Subang Jaya and Shah Alam, from Taiwan's Chunghwa Picture Tubes (Malaysia) Sdn Bhd for RM385.5 million last year.

Tropicana Metropark, which will be developed over the next 10 to 12 years, is the company's launch pad to build its momentum this year.

The mixed development will comprise 17 high-rise towers, including a four- or five-star hotel, a 600,000 sq ft mall, hospital and education centre.

"We will consider relocating the KTM station if we can obtain the approvals. The idea is to improve connectivity of the development," he said after the groundbreaking of Tropicana Metropark yesterday.

The ceremony was also attended by Subang Jaya Municipal Council (MPSJ) president Datuk Asmawi Kasbi.

Asmawi said that MPSJ will call for a meeting with KTMB Bhd, the Transport Ministry and the National Highway Authority to get approval for the relocation plan.

The Batu Tiga KTM commuter station was built to cater to traffic in the suburban areas of Shah Alam and Klang.

Yau said to further enhance the appeal of Tropicana Metropark, the company will build a RM150 million flyover linking the project to the Federal Highway near the Batu Tiga toll.

"Work on the flyover will commence early next year and will be completed by 2016," he said.

Yau also said that 16 per cent of the project will be dedicated to open space and would include a 3.7ha central park.

Eversendai plans maiden Sri Lanka foray

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 3, 2013

KUALA LUMPUR: Structural steel turnkey and power plant contractor Eversendai Corp Bhd is set to make its maiden foray into Sri Lanka.

Eversendai, set up more than 30 years ago, has made Malaysia proud by playing a role in the construction of some of the world’s largest iconic buildings.

Among its notable undertakings are the Petronas Twin Towers, Burj Khalifa, Emirates Tower, Burj Al Arab Hotel, Rose Tower, Ski Dome, Dubai Festival City, Khalifa Olympic Stadium and Kingdom Trade Centre.

Eversendai executive chairman and group managing director, Tan Sri A.K. Nathan, said Sri Lanka offers solid opportunities in the development of iconic buildings.

“Sri Lanka is opening up to foreign investors. The country is developing and Eversendai, with its track record and expertise, is eyeing several projects there. “We have done our due diligence and tendered for several construction projects in Colombo,” Nathan told Business Times on Saturday after receiving his “Tan Sri” title from Yang di-
Pertuan Agong Tuanku Abdul Halim Mu’adzam Shah in conjunction with the ruler’s birthday.

Investments into Sri Lanka are expected to expand this year, with the construction sector buoyed by infrastructure projects worth billions of ringgit.

The end of a 26-year civil war in 2009 has driven investment in roads, buildings and ports and brought gains in tourism receipts.

According to estimates by Asian Development Bank, Sri Lanka’s gross domestic product (GDP) is expected to grow by 6.8 per cent in 2013 and 7.2 per cent in 2014 on better external conditions. GDP growth in 2012 was 6.4 per cent.

The Main Market-listed Eversendai is 70.52 per cent-owned by Nathan and 8.85 per cent by the Employees Provident Fund.

Since its establishment, Eversendai has completed more than 120 jobs in Malaysia, Singapore, the Middle East, the Philippines, Indonesia and Thailand.