Glomac sees 7 good years ahead

By Sharen Kaur
Published in NST on October 25, 2013

SUSTAINED GROWTH: Developer has 12 ongoing projects with estimated RM7b GDV remaining


GLOMAC Bhd expects to sustain earnings growth for the next seven years, driven by RM7 billion worth of new launches during the period.

The developer has 12 ongoing projects with estimated RM7 billion gross development value. That could reach RM10 billion by April next year as it targets strata properties for higher margins and townships in Greater Kuala Lumpur.

Group managing director and chief executive officer Datuk FD Iskandar said growth will be driven by the company's healthy unbilled sales of RM852 million, launches of RM1.4 billion in the current fiscal year and new landbanking activities.

Glomac is eyeing land in Greater Kuala Lumpur, Iskandar Malaysia in Johor, Kota Kinabalu and Penang.

"We may announce something in Iskandar Malaysia and Kota Kinabalu next year. But the focus is on Greater Kuala Lumpur, which needs one million new houses by 2020," said Iskandar yesterday after the company's annual general meeting and extraordinary general meeting, here.

Last year, Glomac posted a record net profit of RM101.5 million, 19.1 per cent more than the previous year.

In the first quarter ended July 31 2013, it registered a net profit of RM24.13 million, up 14.9 per cent from the RM21 million recorded a year ago.

Iskandar said in terms of profitability and unbilled sales, Glomac is among the top 10 of 92 listed developers on Bursa Malaysia.

"We hope to maintain our performance, if not do better, this year. We have been building new grounds for 2013, buying land and developing new townships, including Saujana KLIA," Iskandar said.

He said Glomac will continue to develop mixed integrated projects, gated communities and townships with properties of all price ranges.

Developers selling lifestyle

By Sharen Kaur
Published in NST on October 22, 2013

 The local property market landscape is changing as developers turn more innovative in their product planning.

Malaysian Institute of Estate Agents (MIEA) president Siva Shanker said gated and guarded property and integrated projects are the in thing now.

Siva said home buyers today are looking for properties that offer lifestyle and security.

"Developers today are not selling houses, but lifestyle. A developer is not going to build and sell a single or double-storey house. They will build homes that come with a lifestyle.

"So when you hear about properties increasing in price, it is because of the lifestyle," he said recently, after a briefing on the 23rd National Real Estate Convention 2013 (NREC 2013).

Siva said inner city living is also becoming more popular because of the perception of being on the high-end of the society and due to traffic.

According to Siva, a boutique developer in the Kuala Lumpur city centre is able to sell a property for about RM3,000 per square feet because of lifestyle.

"That is a huge leap forward. People are prepared to pay for a branded house," he added.

The NREC 2013 will be held on Thursday at Hilton Hotel in Petaling Jaya and several topics will be discussed.

Siva will present a paper on "Changing Trends in the Property Market". Senator Datuk Abdul Rahim Rahman from Savills Rahim & Co Chartered Surveyors will talk about "The Property Market Outlook for 2014", while Ho Chin Soon will discuss "New Growth Centres in Malaysia - Klang Valley, Penang, Johor and Kota Kinabalu."

Andrew Wong from the BAR Council will explain the "New Legislation on Strata Living - The New Strata Management Act 2013" and PR1MA's Datuk Mutalib Alias will discuss "Affordable Housing".
 

KTMB targets non-rail revenues

By Sharen Kaur
Published in NST on October 22, 2013

KERETAPI Tanah Melayu Bhd (KTMB) aims to develop land along its rail network into bonded warehouses to grow its non-railway revenues, said its president Datuk Elias Kadir.

A bonded warehouse is a building in which dutiable goods may either be stored or undergo manufacturing operations.

Upon entry of goods into the warehouse, the importer and warehouse proprietor incur liability under a bond. This liability is then cancelled when the goods are withdrawn for supplies.

"I personally think there is great business in this. We will approach overseas investors to manufacture their goods at the bonded warehouses and subsequently move them by train," Elias told Business Times.

Elias is also talking to hypermarkets to set up shop at the train stations throughout Peninsular Malaysia.

The national railway company has 196 train stations nationwide and 53 are located in the Klang Valley.

"We want to create a lifestyle where peo-ple can travel and shop. I am also looking at selling advertising space inside the trains and the stations," he said.

KTMB is currently involved in moving goods and people. It runs cargo, commuter and inter-city services and this business contributes 100 per cent to its yearly revenues.

The company, however, has been loss-making since its corporatisation in 1992.

It did, however, post net profits of between RM9 million and RM15 million from 1993 to 1995.

For fiscal year 2012, KTMB recorded a net loss of RM284 million on revenue of RM361 million.

"KTMB is a bankrupt company with liabilities of RM2.5 billion, and assets worth around RM500 million. But that can change. It can be profitable but not under the present structure and system. With the present structure and system we can only do repair works," Elias said.

Instead of a rail fare hike, which is determined by the Land Public Transport Commission, KTMB will have to find new ways to make money.

"We have brought in Lloyd to assess our tracks as we move from single track to double tracks, and increase capacity by fivefold. I am obsessed with seeing a KTMB turnaround. I think it can be done as we have good people," Elias said.

Developers and Rehda wary of RPGT increase

By Sharen Kaur
Published in NST on October 22, 2013

DEVELOPERS believe curbing speculative buying in the property market should be approached with care instead of introducing policies that will affect foreign buying.

IJM Land Bhd chief executive officer and managing director Datuk Soam Heng Choon said foreign buyers are still an important component of the housing market, as they serve as purchasers of high-end properties.

"We still need foreign buyers to buy high-end properties priced RM1 million and above.

"We also need foreigners employed in sectors such as oil and gas to support the rental market for high-end properties.

"The government must not forget that Malaysia Property Inc was set up to promote Malaysian properties overseas and get foreign buyers here.

"Flip-flop policies will serve only to drive away interested foreign investors."

Analysts have predicted another round of policy-tightening, including increasing the real property gains tax (RPGT) and stamp duty in the 2014 Budget to rein in household debt.

Last month, Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan said the government would not hesitate to further tighten fiscal policies to curb property speculation and ensure reasonable and affordable property prices.

Rahman had said that his ministry was studying the possibility of increasing the RPGT as the rate had not been effective in curbing speculative buying.

The rate currently stands at 15 per cent for properties sold within two years, 10 per cent for properties sold in the third to fifth year, and no tax for properties sold after five years.

Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Seri Michael Yam said a hike in RPGT and stamp duty on the transactions of properties would cause uncertainty among foreign investors because of the swing in government policies.

Yam said this would have a bearing on property-buying decisions, leading to a possible wait-and-see attitude among foreign investors.

"There are better mechanisms to curb speculation than just increasing the RPGT."

Eversendai expects good earnings next year

By Sharen Kaur
Published in NST on October 18, 2013

Eversendai Corp Bhd expects a healthy showing next year, given that some of its new projects have only just started, says its chief.

Founder and executive chairman Tan Sri A.K. Nathan said the group's stellar project execution and strong cash flow-generating ability, coupled with an order book of around RM1.7 billion, provides clear earnings visibility for the next two years.

Eversendai, a structural steel turnkey and power plant contractor, is tendering for RM8 billion to RM10 billion worth of projects and expects to land some of the jobs soon, Nathan told Business Times.

Early this year it won a US$107.8 million (RM344.9 million) job to undertake structural steel works on the US$3.2 billion Midfield Terminal Project at Abu Dhabi International Airport.

For the first six months of its current financial year ending December 31 2013, Eversendai posted lower net profit of RM40 million versus RM57.6 million in the same period last year.

Eversendai is not dependent on a vibrant economic environment to do well as being a niche player in the market, its expertise is always on the hunt by corporate giants.

Earnings fell due to lower gross profits of 16.7 per cent and 73.9 per cent recorded in its Middle East and India segments in the second quarter ended June 30. Gross profit in the Malaysian segment rose 187.1 per cent, driven by its Manjung and Tanjung Bin 4 power plant projects.

"The prospects for Eversendai look bright. The Middle East is abuzz with construction activities and India has new developments. We expect gross profits to improve," Nathan said.

China firm to clinch RM150m KTMB job?

By SharenKaur
Published in NST on October 17, 2013

THE Ministry of Transport is expected to award an MRO (maintenance, repair and overhaul) contract worth over RM150 million for six-car set (SCS) trains owned by Keretapi Tanah Melayu Bhd (KTMB).

It is learnt that the contract will be awarded to China's CSR Zhuzhou Electric Locomotive Co (CSR ZELC) Ltd.

This could be the second big win for CSR ZELC this year, which recently won a ministry job worth more than RM500 million to supply 10 units of six-car train sets (ETS) for KTMB.

CSR ZELC is one of the major electric locomotive manufacturers in China and a subsidiary of China South Locomotive & Rolling Stock Corp Ltd.

Three years ago, CSR ZELC inked a RM1.9 billion deal with KTMB to supply 38 sets of custom-built SCS trains.

The SCS trains are to improve commuter service in the Klang Valley under the government's National Key Result Areas initiative for public transportation.

The first consignment arrived in Malaysia in August 2011. Full delivery of the train sets were made by middle of 2012.

As part of the deal, CSR ZELC was awarded an MRO contract for two years for the SCS trains, managed by CKM Sdn Bhd, its 100 per cent- owned company. CKM employs more than 100 people.

The MRO deal, worth RM133 million, is set to expire in February 2014.

Sources close to CSR ZELC said the company is seeking an extension to help boost its presence.

However, the Railwaymen's Union of Malaya (RUM) is against CSR ZELC securing the new contract as it did not comply with the rules and procedures of the offset programme with Might (Malaysian Industry-Government Group for High Technology).

"The deal requires CSR ZELC to transfer expertise and technology to locals, but they have not done that. Only 30 per cent of its staff are Malaysians and doing odd jobs.

"CSR ZELC is now proposing to use a 100 per cent local Bumiputera company, Landas Efektif Sdn Bhd, as a frontier company, with the management and control of the contract fully executed by CSR ZELC," the source said.

The source said KTMB has not been able to carry out the MRO works for the SCS trains as there was no transfer of technology and know-how on maintenance by CSR ZELC.

Jamaludin may succeed Liew as SP Setia chief

By Sharen Kaur
Published in NST on October 16, 2013

UNLOCKING VALUES: PNB undecided between I&P chief and its own internal candidate
I&P Group Sdn Bhd's Datuk Jamaludin Osman is among candidates tipped to head SP Setia Bhd with the imminent departure of its president and chief executive officer Tan Sri Liew Kee Sin next year.

Business Times understands that Permodalan Nasional Bhd (PNB) is considering appointing either Jamaludin or a senior executive from within the PNB group of companies as the new SP Setia chief.

When contacted, Jamaludin said he wasn't aware of any plans to appoint him as SP Setia head.

"There is a lot of talks, but I personally do not know anything," he said.
Jamaludin has been I&P group CEO since October 1 2004 and managing director from January 1 2005.

I&P was formed from the merger of three property companies in the PNB stable, namely Island & Peninsular Bhd, Pelangi Bhd and Petaling Garden Bhd.

The company's assets are worth about RM10 billion.

Jamaludin has also served as Syarikat Perumahan Pegawai Kerajaan Sdn Bhd MD since 1999 and was a civil engineer with Petroliam Nasional Bhd prior to that .

Meanwhile, Liew has confirmed his departure, although the timing remains unclear.

CIMB analyst Terence Wong believes that Liew is likely to retire in March next year when the third put option at RM3.95 per share for his remaining stake in SP Setia is due.

SP Setia's major shareholder is PNB. However, as PNB does not have management control yet, the current succession plan calls for SP Setia deputy president Datuk Voon Tin Yow to take over as CEO when Liew retires and for chief financial officer Datuk Teow Leong Seng to assume the deputy president's role.

It was reported that PNB is exploring ways to unlock the value of its property assets housed under I&P, either by a direct listing of the company and/or injecting its RM10 billion worth of assets into SP Setia.

PNB is inclined to inject the assets into SP Setia as a consolidation between the two companies would enhance the value of I&P's projects, and see SP Setia emerge as a mega property company.

SP Setia's market capitalisation of close to RM8 billion, combined with I&P's assets, could create a company with a market capitalisation of RM18 billion.

Higher property tax on foreigners will dent mart'

 By Sharen Kaur
Published in NST on October 12, 2013

IMPOSING a higher tax on foreign buyers in Johor will put a dent on the property market.

IJM Land Bhd chief executive officer and managing director Datuk Soam Heng Choon said yesterday the move will slow down foreign buyers' investment participation and dampen buying sentiment.

He in the longer term, this will have an impact on 140 industries supported by real estate, although the move currently involves only Johor.

The Johor government will be hiking property processing fee from RM10,000 per transaction to four and five per cent of property value for foreign buyers.

This new measure will take place from January under a new policy being considered to boost the state's revenue.

The new fee, which will apply to all properties, including those purchased from the secondary market, will enable Johor to also control the sale of properties to foreigners.

It is estimated that there are about 130,000 foreign property owners in Johor.

"The policy will affect developers selling luxury properties and targeting the foreign market. IJM Land will not be affected as most of our projects in Johor are in the affordable range and we are targeting owner occupiers," Soam said.

Developers in Johor with high exposure to foreign buyers include UEM Sunrise Bhd, SP Setia Bhd, Sunway Bhd, Iskandar Waterfront Holdings Bhd, IGB Corp Bhd, Tebrau Teguh Bhd and Tropicana Corp Bhd.

Analysts said property developers are against proposals that will lift prices.

However, they said Johor properties will still be attractive to Singaporeans, given the current development of Iskandar Malaysia.

A spokesperson from Mah Sing Group Bhd said demand for properties in Johor should remain strong as the population base is targeted to double to three million by 2025.

He said Mah Sing will not be affected by the new fee as most of its projects in Iskandar Malaysia are predominantly townships offering bread and butter products for locals.

Dr Mahathir : Build MRT lines simultaneously

By Sharen Kaur
Published in NST on October 11, 2013

LINE 2 and 3 of the Klang Valley Mass Rapid Transit (KVMRT) system should start simultaneously with the ongoing Sungai Buloh-Kajang (SBK) Line, says former prime minister Tun Dr Mahathir Mohamad.

"We should do it simultaneously and not wait until one line is completed. It also depends on the demand for the MRT.

"I am sure this underground network will be well accepted," he said after visiting the MMC-Gamuda MRT construction site in Cheras, here, yesterday.

Construction of the SBK Line started in 2011. Line 2 and 3 consist of the Circle Line looping around the Kuala Lumpur city centre and the north-south line from Selayang to Putrajaya.

Mass Rapid Transit Corp Sdn Bhd chief executive officer Datuk Azhar Abdul Hamid has said a delay in starting Line 2 and 3 will result in rising costs.

All three lines are estimated to cost around RM80 billion. The overall cost of the project, however, will only be finalised once all the contracts have been awarded.

Dr Mahathir said Malaysia needs to have a complete rail network, including the high speed rail link between Kuala Lumpur and Singapore, to move people and goods.

He said the current priority is to complete the electrified double-tracking project (EDTP) from Padang Besar to Johor Baru.

The government has awarded contracts for the EDTP stretch between Ipoh and Padang Besar worth RM12.5 billion to the MMC-Gamuda joint venture and the Seremban-Gemas worth RM3.45 billion to India's Ircon International Ltd.

Both the projects are ongoing.

The Rawang-Ipoh strecth was completed in 2008 while the link between Gemas and Johor Baru, which is estimated to cost more than RM10 billion, has yet to be awarded.

IJM Land to allay impact of cooling measures

By Sharen Kaur
Published in NST on October 10, 2013

 IJM Land Bhd will focus on developing townships and building affordable houses to mitigate the effects of property cooling measures.

Chief executive officer and managing director Datuk Soam Heng Choon said the company will also launch housing projects targeted at owner occupiers.

"When people buy houses for their own use, the impact from cooling measures will not be there. We hope the government does not continue to flip-flop on policies as it will affect the property sector and other industries," he said.

Soam said IJM Land has seven to eight launches worth RM1.7 billion coming up between now and March next year and it is targeting owner occupiers and upgraders.

The new launches include Seri Riana Phase 2, Bandar Rimbayu Phase 3, Seremban 2 and Pantai Sentral Park Phase 1.

He said IJM Land is bent on surpassing the RM2 billion new sales it achieved last year. It has so far raked in RM1.2 billion in the first half of fiscal year 2014.

Soam was speaking at a media briefing on the company's Seri Riana project in Wangsa Maju yesterday.

IJM Land is launching Phase 2 of Seri Riana, with a gross development value of RM250 million, this month.

It consists of 284 condominium units worth between RM696,000 and RM1.2 million each, or about RM600 per sq ft. Some 2,000 people have registered, Soam said.

"We are selling to a community who are going to live in these condominiums, which is why we have larger units of 1,259 sq ft to 1,830 sq ft. We aim to sell 60 per cent of the units over the next three to four months," Soam said.

Phase 1, launched a year ago, has 395 units and are 95 per cent sold.

For its STG200 million (RM1.03 billion) Royal Mint Gardens project in London, IJM Land has achieved property sales of 85 per cent worth more than RM800 million for Phase 1, which comprises 254 apartment units, Soam said.

KUB hopes to land VOs of RM40m from MAHB

By Sharen Kaur
Published in NST on October 9, 2013

KUB Malaysia Bhd will submit variation orders (VOs) of more than RM40 million for the third runway project at the Kuala Lumpur International Airport 2 (klia2) to Malaysia Airports Holdings Bhd (MAHB).

Business Times understands that KUB will submit the VOs to account for additional works in the project, earliest by January next year, after handing over the project to the airport operator.

To recap, KUB Malaysia's unit KUB Builders Sdn Bhd was awarded a RM268.8 million contract in October 2011 by MAHB.

The contract is to build the 3.96km third runway, parallel connecting taxiways and other associated work at the new low-cost carrier terminal.

KUB Builders has completed the construction of the runway. It is expected to hand over the project to MAHB next month.

The chief executive officer of KUB Builders Hanim Laham confirmed that the company will submit VOs for the project to MAHB next year.

"There are some VOs to be made. These are for additional works requested by MAHB after the contract was awarded to us.

"I will make the calculations, and hopefully, we will be able to submit the VOs to MAHB early next year," he said.

MAHB officials were not available for comments.

On the test landing by Malindo Air's Boeing 737-900ER on the completed third runway at klia2 on Monday, Halim said the landing represented a milestone for the company.

The contract to build the third runway for klia2 is KUB's first foray into the airport construction business, he said.

"What makes it more meaningful is that the third runway is delivered in time for klia2's May 2014 opening," he said.

More budget airlines set to fly from klia2

By Sharen Kaur

Published in NST on October 8, 2013

MORE budget airlines will be flying from Kuala Lumpur International Airport 2 (klia2), the new purpose-built low-cost carrier terminal (LCCT), here, when it opens next year.

Business Times understands that several foreign budget airlines have indicated their interest to operate from klia2 as passenger traffic rises in the Asia Pacific.

"MAHB (Malaysia Airports Holdings Bhd) is talking to several parties but there is nothing on the table yet. Hopefully, by the time klia2 opens, one or two deals would have materialised," a source said.

Low-cost airlines currently operating from the existing LCCT are AirAsia, Thai AirAsia, Indonesia AirAsia, AirAsia X, Tiger Air Mandala, Singapore's Tiger Airways and Cebu Pacific Air of the Philippines.

The International Air Transport Association's global passenger traffic data for August showed international passenger volume rising 7.5 per cent year-on-year for the month, with Asia Pacific recording an 8.6 per cent growth.

Meanwhile, MAHB managing director Tan Sri Bashir Ahmad Abdul Majid said budget carriers will start operating from the klia2 from May 2 next year.

"There are currently more than five airlines operating at the LCCT. All will move to klia2 when it opens next year," Bashir told Business Times yesterday after a test landing of hybrid carrier Malindo Air's Boeing 737-900ER on klia2's third runway.

Also present was acting Transport Minister Datuk Seri Hishammuddin Hussein.

The klia2, which costs RM4 billion to build, is scheduled to open on May 2 next year.

Better connectivity in Iskandar

By Sharen Kaur
Published in NST on October 7, 2013

THE implementation of the Transportation Blueprint (2010-2030) for Iskandar Malaysia in Johor will help to transform the region into a bustling business district and enhance its global competitiveness.

Plans for Iskandar include a regional rail transit commuter system connecting Nusajaya, Kulaijaya, Johor Baru and Pasir Gudang using the existing KTM rail infrastructure; inter-city lines; the proposed rail transit system (RTS) linking Johor Baru and Singapore; and the high speed rail (HSR) from Kuala Lumpur to Singapore.

"Proper railway connectivity like RTS and HSR will attract new domestic and foreign investments," said Iskandar Regional Development Authority (IRDA) head of projects and project management office Mohamad Sa'elal.

Iskandar has attracted RM118.93 billion in total investments since its inception in 2006, and 66 per cent were domestic-driven.

The blueprint includes forming an integrated transit terminal network to link major towns and gateway terminals; developing a bus rapid transit system linking Johor Baru with Skudai, Johor Jaya and Nusajaya; and providing subur ban feeder bus services.

It also looks at improvements to taxi services and a demand-responsive transport system; water taxis, ferries and cruise boats; and school bus zoning, said Mohamad.

He said the blueprint aims to encourage use of non-motorist transport, smart development and green technology to reduce carbon emission.

It will improve public transport modal split from 18 per cent currently to 50 per cent by 2030 and optimise road network and reduce car dependency from 500 cars to 300 cars for every 1,000 population, he said.

"We expect an increase in tourism and leisure activities. Real estate development will also mushroom and the construction sector will be busy," Mohamad said.

IRDA has formed Perbadanan Pengangkutan Awam Iskandar Malaysia to spearhead the implementation of projects based on approved plans.

L&G may turn Sg Jernih estate into township

By Sharen Kaur
Published in NST on October 15, 2013

LAND & General Bhd (L&G) may develop its oil palm and rubber estate in Sungai Jernih, Selangor, into a bustling township in the longer-term.

L&G currently owns 1,010ha of plantation land cultivating oil palm and rubber. According to its annual report for 2012, the plantation land has a net book value of RM48.14 million.

Managing director Low Gay Teck said L&G is not exiting the plantation business, but merely looking for development potential in under-served areas.

"Sungai Jernih is not a mature area. It would probably take another five to 10 years before we see potential there. Rawang, which is nearby, is a mature housing area and we expect Sungai Jernih to follow suit.

"If we decide to develop the estate, it is probably because we have bought plantation land elsewhere. There is nothing on the table yet," Low told Business Times.

The estate is located north of Selangor, about 20 minutes from Proton City in Tanjung Malim. It is bordered by the new North-South Expressway to the west.

Low said L&G will continue cultivating oil palm and rubber for additional income, while focusing on its core business, which is property development. 

He said the plantation business contributes an average three per cent a year to the company's net profit and revenue. 

For fiscal year 2012, L&G posted a net profit of RM57.2 million on revenue of RM216.3 million.

Close to 90 per cent of the net profit and revenue was derived from its property development activities, with a small fraction from its investment assets.

L&G also owns Sri Damansara Club and Sekolah Sri Bestari. This segment contributes around seven per cent to its earnings.

Low said property development is still a sustainable business in Malaysia, adding that there is an oversupply but only in hotspots where many developers are focusing their resources.

LBS’ high hopes on Cameron Highlands

By Sharen Kaur
Published in NST on October 15, 2013

BANKING ON DEMAND: Developer sees RM500m GDV project to help it maintain growth

LBS Bina Group Bhd is banking on its new project in Cameron Highlands, the country’s most popular hill resort, to be its jewel in the crown.

The Selangor-based developer expects the project, which has a gross development value (GDV) of RM500 million, to keep its
earnings growth intact.

Managing director Datuk Lim Hock San told Business Times that the property market in Cameron Highlands is strong, with continuous demand for new holiday apartments and shoplots due to its growing population.

LBS owns another 2ha site next to its ongoing 1.2ha Brinchang Square project. It plans to undertake a tourism project featuring tudorinfluenced holiday apartments, shops, facilities
and car parks.

“We aim to launch the project next year. We are targeting owner-occupiers,” Lim said.

LBS is no stranger to Cameron Highlands, following the launch of Royal Lily Park and Carnation Park in 1998. It is now the biggest developer there.

It is developing Cameron Golden Hills, a 24ha township located between Brinchang and Tanah Rata, which it started in 2010.

The nature-inspired township has a GDV of RM724 million and is due for completion by 2017 over several phases.

It will have a total 1,210 units of holiday apartments, shops, double-storey terrace houses, semi-detached homes, and bungalow lots.

LBS has sold 153 units of the double-storey houses (The Vines), more than 300 apartments (Summer Square and Barrington Square), and 60 per cent of the 47 bungalow lots in the last three years.

Lim said property prices have risen by 20 to 30 per cent since the launches.

Brinchang Square, which is due to be completed by year-end, comprises 31 units of fourand five-storey shops with 244 parking bays.

The shops, unveiled in 2011 for RM1.8 million each, are now selling at RM2.2 million each.

Next year, LBS will launch a new development within the township, comprising a hotelcum-SOHO (small office/home office) apartments.

The project will be developed by LBS’s subsidiary, MITC Engineering Sdn Bhd.

“This project will have a GDV of more than RM100 million. We want MITC to do it so that LBS can focus on the township, and other developments in Malaysia,” Lim said.

Read more: LBS’ high hopes on Cameron Highlands http://www.btimes.com.my/Current_News/BTIMES/articles/20131014233236/Article/index_html#ixzz2hmOaIUN3

Staying on track

By Sharen Kaur
Published in NST on October 14, 2013

FARES REVISION OPTION: KTMB needs RM550m revenue to break even, says president

KERETAPI Tanah Melayu Bhd (KTMB) needs to ring up a revenue of RM550 million a year to break even, says its president Datuk Elias Kadir.

But the national railway company is far from being profitable, as its current revenue is in the region of RM330 million to RM360 million a year, Elias told Business Times recently.

KTMB, which employs 5,500 people, runs cargo, commuter and inter-city services.

Its bread and butter is cargo. But the business has dwindled because of the lack of operating locomotives, Elias said.

KTMB targeted a revenue of RM266 million from cargo last year but achieved RM140 million.

Elias said 58 locomotives were required to achieve the target but only 44 were in operation.

The rest could not be used as they had not been maintained, while for some, the works were halted due to issues with contractors. Due to this, the load factor fell by as much as 30 per cent.

Elias said a revenue of RM550 million is achievable if current fares for cargo, commuter and intercity services are revised accordingly.

The last time the fares were raised was in 1982 for cargo and 1992 for commuter services.

“The revised rates will help double revenue.

Our rates for cargo are the cheapest compared with other modes of transportation,” Elias said.

KTMB has been recording losses since its corporatisation in 1992. It did, however, post net profits of between RM9 million and RM15 million from 1993 to 1995.

For fiscal year 2012, KTMB recorded a net loss of RM284 million on revenue of RM361 million.

Operating loss was RM275.6 million, attributed to the company’s high yearly expenses of around RM600 million, Elias said.

He added that KTMB spent an average RM250 million a year on wages, RM200 million on fleet and infrastructure maintenance and the rest was direct operating cost.

“We are working on reducing our yearly expenses to RM500 million. The potential for cuts is there. We will not slash our workforce,” Elias said.

Ireka embarks on cost optimisation programme

By Sharen Kaur
Published in NST on October 1, 2013

IREKA Corp Bhd has embarked on cost optimisation to mitigate rising construction cost, which is causing its margins to shrink, said its executive director Lai Voon Hon.

The company, which in the past had enjoyed profit margins of more than 14 per cent, is now recording close to 10 per cent.

Lai said the construction sector remains very competitive and the rising cost is further affected by increases in building materials and manpower costs.

For Ireka, cost optimisation, which looks at the most cost-effective or highest achievable performance under the given constraints, will be its key focus for the next few years.

For the financial year ended March 31 2013, Ireka recorded a pre-tax loss of RM38.4 million compared with a pre-tax profit of RM14.1 million in the year before, largely due to a share of loss of Aseana Properties Ltd of RM19.7 million, and losses incurred by the construction segment, which posted lower revenues.

"Construction still contributes a bulk to our earnings. If there is a significant price increase for construction, it will have an impact on our margin. What we do is cost optimise.

"We have budgeted cost increase for certain contracts.

"It's not possible to achieve margins of 14 to 15 per cent but we will try to get the highest level," Lai said after the company's shareholders' meeting, here, yesterday.

Ireka has RM1.1 billion worth of jobs that would take three years to complete. They are Imperia Puteri Harbour serviced apartments and offices in Johor; MRT elevated viaduct civil works package V7; Solstice@Pan'gaea mixed office and apartments in Cyberjaya; The RuMa Hotel and Residence in Kuala Lumpur; and KL Eco City Vogue Suites.

Its property development division is launching six projects over the next two years in Nilai, Kajang and Kuala Lumpur, worth a combined RM2.2 billion.

Lai said the properties will be launched based on current market prices.

Call to impose RM40 parking fee

By Sharen Kaur
Published in NST on September 30, 2013

Parking charges of up to RM40 per hour should be imposed to reduce traffic in major cities here, suggests a board member for the Federal Department of Town and Country Planning.

Khairiah Mohd Talha said the fee should be raised to encourage people to leave their cars at home and use public transportation to travel to work and other places.

The system, she said, has proven successful in other countries.

For instance, Australia and Singapore charge A$40 (RM120) and S$40 (RM100) per hour, respectively, while in the United States, Boston and New York also charge US$40 (RM130) per hour, she said.

High parking charges would also help lower carbon emission and create a safer environment, she said.

Speaking at a highway conference in Johor recently, Khairiah said it is vital that a peoplecentric transportation master plan is implemented to meet the target.

"The master plan should not focus on business ... it should be people first," she added.

City Hall is reviewing parking needs in Kuala Lumpur, especially in areas accessible to public transportation.

Mayor Datuk Seri Ahmad Phesal said the review includes reducing parking lots as public transportation rises.

City Hall is banking on projects like the MY Rapid Transit system to help achieve the targets.

Kuala Lumpur has a population of six million and it is targeted to grow to 10 million by 2020.

Khairiah said it is important to meet the paradigm shift in the way developments are taking shape here.

"Today, we are looking at smart cities, smart economy, smart mobility, smart environment, smart living, smart people and smart governance.

"The applications of smart cities include an innovative economy and well-planned city infrastructure and utilities. Proper planning will ensure that the targets are met," she said.

KLIA-klia2 railway line ready

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on September 28, 2013

The 2.2km railway line extension from Kuala Lumpur International Airport (KLIA) to Kuala Lumpur International Airport 2 (klia2) is ready, way ahead of the completion date of the country's new hybrid airport in May next year.

Express Rail Link Sdn Bhd (ERL) chief executive officer Noormah Mohd Noor said only final touch-ups are needed.

"We are now installing the ticketing system at the gates and self-service kiosks," she told Business Times at a recent railway conference.

The opening date for klia2, which is now a hybrid airport as it will accommodate AirAsia X's business-class passengers, is May 2 next year.

ERL has a 30-year concession to operate the KLIA Express and KLIA Transit trains between KL Sentral in Brickfields, here, and KLIA.

YTL Corp Bhd, which controls ERL,is extending the railway line from KLIA to klia2 for about RM100 million. Work on the extension started in July 2011.

The ERL station at klia2 will be located at gateway@klia2, the transportation hub-cummall developed by WCT Bhd.

Noormah said the railway line extension will increase ridership by 40 per cent to 7.4 million passengers when klia2 opens.

Business Times reported that YTL is talking to Spanish and Chinese train manufacturers to buy up to four train sets, comprising four coaches each, for RM150 million to serve klia2.

The existing railway line from KL Sentral to KLIA is served by 12 electric high-speed trains. The trains were acquired from German-based Siemens AG.