Gone too soon - Datuk Wan Abdullah Wan Ibrahim!

By Sharen Kaur
sharen.kaur@gmail.com

A tribute : To one of Malaysia's most astonishing corporate leaders!

  “The captain has left the ship," lamented a developer and friend when Datuk Wan Abdullah Wan Ibrahim stepped down as chief executive officer (CEO) and managing director (MD) of UEM Sunrise Bhd on February 25, 2014.
  Indeed less than 24 hours later he passed away in Kuala Lumpur.
 A few have invested a lifetime's devotion and faith in the property development industry on the scale of Wan Abdullah who died today at 5.45am, at the age of 56 after a short illness.
  Wan Abdullah will be missed, but not forgotten!

                                                      The late Wan Abdullah Wan Ibrahim

  An accountant by profession, he has been the MD of UEM Sunrise (a merger between UEM Land Holdings Bhd and Sunrise Bhd) and UEM Land Sdn Bhd at UEM World Bhd since January 2006.
  Wan Abdullah was instrumental in taking UEM Sunrise to a new chapter in its evolution as a property developer.
  Prior to UEM Sunrise, he has held various senior positions in major property companies including United Malayan Land Bhd as group CEO.
  Between 1996 and 2004, he worked with then Kumpulan Guthrie Bhd, where he last held the position of director of property division.
  In that capacity, he was tasked to lead the property development activities of the group, as well as for subsidiaries - Highlands & Lowlands Bhd and Guthrie Ropel Bhd.
  He was one of the key members responsible for the conceptualisation and submission of plans for the Guthrie Corridor Planned Communities, covering an area of 11,650 acres linked and accessed by the Guthrie Corridor Expressway.
  He also spent 10 years with property developer Emkay Group where he held several positions including group executive director.
  Wan Abdullah had the greatest gift a man could have; respect – for himself, the industry he loved and the people in it.
  He dedicated much of his life to UEM Sunrise.
  But when he found time, he would take to golfing.
  Another thing he enjoyed, surprisingly to me, was the joy of indulging in Northern Indian cuisine.
  Wan Abdullah lived a full active life as a leader for UEM Sunrise.
  He is best known for transforming UEM Sunrise into one of the nation's leading property developers with its flagship development Nusajaya, in the heart of the Iskandar Development Region.
  Outside of Nusajaya, UEM Sunrise's projects include Symphony Hills, an exclusive residential enclave in Cyberjaya, and prime developments n Kuala Lumpur, Mont’ Kiara, and in Vancouver, Canada.
  I know Wan Abdullah for more than six years and he definitely was a great man to talk to about life in general and the making of a property development company. His vision and mission for UEM Sunrise was truly inspiring.
  Wan Abdullah was honoured Property CEO 2011 at the International Real Estate Federation Malaysia Property Award 2011.
  His energy and vision will long be remembered.

Powering up with 5 new dams

By Sharen Kaur
Published in NST on February 25, 2014

INCREASING CAPACITY: SEB will invest up to RM10b on hydroelectric projects in central and northern Sarawak next year

SARAWAK Energy Bhd (SEB) plans to build five hydrolectric dams with a total 3,110-megawatt (MW) capacity and invest up to RM10 billion next year.

The state-owned entity has called for companies to submit  prequalification applications to develop the dams.

The dams being planned are Balleh (1,200MW) and Pelagus (410MW) in the upper Rejang River basin in central Sarawak, where the Bakun and Murum dams are sited; and Baram (1,200MW), Limbang 1 & 2 (200MW) and Lawas (100MW) in northern Sarawak.

Sources said the company has not finalised which projects will be implemented first.  However, they said there is a high chance that the Baram and Balleh hydroelectric dams will be built  first.

 The two projects alone will cost RM7 billion to RM8 billion, said a source.

"SEB is calling for companies to submit prequalification applications so that when it calls for tenders, it will have a list of qualified contractors," he said.

The source said tenders may be called later this year but that would depend on many factors, including  economic, financial, weather and demand for power.

The pre-qualification applications are for main civil works (dam and spillway) and electrical and mechanical works (powerhouse civil works). Advertisements were placed last week in several newspapers to attract local and foreign participation.

Foreign players have to form a consortium or joint venture with locally-incorporated companies to qualify for the process.

The  applications close on April 14.

SEB wants companies that have either completed similar packages for at least one major hydroelectric project worth more than RM1 billion or are undertaking one that is worth more than RM2 billion.

SEB, which was delisted from Bursa Malaysia in 2010 after it was taken private by the Sarawak government, aims to increase its installed hydro-power capacity to 6,000MW by next year.

The company's only hydroelectric project is Murum dam, which is being constructed by Chinese dam builder Sinohydro and supervised by Three Gorges Corp.

MAS - Weathering the storm

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

When a company goes bankrupt, it implies that it has no choice. But in recent cases involving troubled
airlines, they did so deliberately and have re-emerged leaner and stronger.

Some analysts feel that Malaysia Airlines (MAS), which reported a net loss of more than a RM1 billion last
year, may consider such a route.

They feel that MAS, with a cost disadvantage problem, is nowhere close to making profits, at least not in the
next four years.

MIDF head of research Zulkifli Hamzah said MAS will not be profitable in the next two fiscal years as market conditions are against its turnaround plan.

"There is a system-wide degradation of yield base among regional airlines, such as Singapore Airlines, Thai Airways and Garuda Indonesia.

On the local front, MAS has to compete with other domestic carriers, which further compresses its domestic yield.

"As long as MAS continues to adopt the strategy of 'load active, yield passive' and expand capacity, losses are inevitable," he told Business Times.

MAS posted a record net loss of RM2.52 billion in 2011. It managed to narrow its losses to RM433 million in 2012.

For fiscal year 2013, it reported losses of RM1.17 billion despite cutting expenses, such as axing some routes and introducing lower fares to improve load.

Its expenditure was up 10 per cent year-on-year to RM14.9 billion due to high fuel prices.

A senior law lecturer and consultant of a legal firm suggested that MAS follows the footsteps of Japan
Airlines (JAL) and American Airlines and file for bankruptcy.

He said after filing for bankruptcy, MAS can still operate under a new company and with the same name, if
the registrar of companies approves.

American Airlines and its parent company filed for Chapter 11 court protection in the United States
Bankruptcy Court in November 2011 to cut costs and unload massive debt built up by years of high fuel
prices and labour struggles.

Two years later, they merged with US Airways Group, creating the largest airline in the world.

JAL filed Japan's largest-ever bankruptcy petition by a non-financial company in 2010, kicking off a
three-year restructuring that affected more than 15,000 employees.

Under the restructuring, JAL replaced older, less fuel-efficient planes and cut routes. It also received a 600
billion yen (RM19.3 billion) credit line and 730 billion yen in debt waivers.

"MAS will have to start all over, such as re-hiring staff, awarding contracts, as well as leasing and buying
planes. MAS has contracts and agreements that expire in a long time. Those are expensive and dragging down its earnings," he said.

1/2Mercury Securities head of research Edmund Tham said MAS will have to find a solution, such as raising
more funds, or it will become too dependable on government bailouts.

One company insider said it is possible for MAS to go the JAL and American Airlines way but "there will be
a lot of noise from the unions".

He said the airline is unfortunate to inherit costs that it could not change.

"For example, on long-haul flights, MAS has to reserve two seats for the pilots to rest, which may cost the
airline up to RM20,000 per flight.

"And while the Department of Civil Aviation allows a cabin crew of four to serve on a B737, MAS has to
provide a crew of six as stipulated by the union.

"There are other inherited costs that MAS could not do anything about unless the terms are renegotiated," he
added.

Flynas charts expansion plans

By Sharen Kaur

KUALA LUMPUR: Saudi Arabia's carrier Flynas will raise over US$100 million (RM330 million) by the end of this year to help fund its growth, which includes expansion into Malaysia.

Flynas chief executive officer Raja M. Azmi said the airline is mulling over issuing sukuk or other financial instruments, such as securitisation of assets or revenue.

"We are talking to Arab and Malaysian banks. It is to partly finance the airline's growth and develop the global flight routes," said Raja Azmi, formerly AirAsia Bhd executive vice-president and group chief financial officer.

Flynas, owned by Nas Holdings, which is controlled by Arab royalties, offers flights within the Arab region, Turkey, Sudan and Egypt.

From April, it will offer regional travellers access to affordable, high-value air travel to Europe, Asia and Africa, operating out of its hub in Jeddah.

The new destinations include Kuala Lumpur, London, Gatwick and Manchester in the United Kingdom, Paris, Jakarta, and Casablanca.

In the near future, it will fly to Pakistan and India.

The global expansion is part of the airline's aim to fly 20 million passengers annually by 2020.

Last year, Flynas flew 3.5 million passengers and the target this year is to serve five to six million passengers, Raja Azmi said.

At a press conference after the launch of the Kuala Lumpur-Jeddah route yesterday, Raja Azmi said Flynas will use the A330 planes to offer three weekly flights starting early April.

The frequency will be doubled by the end of the year.

"We will fly out of the Kuala Lumpur International Airport in Sepang. If there is a good offer, we will fly from klia2.

"Our flight fares will be lower than the local airlines, especially AirAsia. In fact, we are talking to MAS, AirAsia and Malindo Air for code sharing and alliance," he said.

Raja Azmi is bullish on the airline's prospects here, targeting the 200,000 Muslims who travel for their annual pilgrimage to Mecca, as well as non-Muslims.

Flynas is also targeting Arab holidaymakers. In the first nine months of last year, some 73,000 Arabs visited Malaysia.

Catering deal eating into MAS profit

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on February 21, 2014

KUALA LUMPUR: Malaysia Airlines (MAS) should terminate its RM6.25 billion contract with in-flight caterer Brahim's Holdings Bhd to narrow its losses, says former member of parliament for Wangsa Maju, Wee Choo Keong.

"There is no airline in the world which has entered into a contract as long as 25 years and non-negotiable. The contract works out to around RM260 million per year, which is a lot of money. A catering contract should run two to three years.

"MAS or Khazanah Nasional Bhd should look into it with a view to terminate the contract. The contract is just overpriced and squeezing MAS' profit margin," Wee told Business Times yesterday.

He said Brahim's would have to be compensated, but the overall deal would still be cheaper for MAS than to continue with the contract.
The catering contract was awarded in 2003.

Wee said Khazanah should also consider terminating contracts of MAS' consultants and expatriates.

He said the salary scale and perks of MAS' top executives should also be reviewed.

"The top executives easily get paid up to RM30 million a year. That is a lot for an airline that is losing money. Why are they taking home such a fat salary? If they are concerned, they should take a huge pay cut, when times are bad," he said.

Wee was commenting on MAS' threefold increase in net loss to RM1.2 billlon for fiscal year 2013.

Meanwhile in Nilai, Negri Sembilan, AirAsia group chief executive officer Tan Sri Tony Fernandes said MAS could have avoided the losses if the share-swap deal between the airline and AirAsia Bhd was not called off.

The termination of cross-holding of shares deal was a waste of opportunity as it could have benefited both parties in the long run, he added.

"Khazanah had a great idea of putting MAS and AirAsia together before the deal became an issue, and there were interference from certain parties.

"I am sure that if the airlines had worked together, both will be stronger and it could have brought both parties good in many ways," he said after visiting the construction site of Epsom College in Bandar Baru Enstek, here, yesterday.

Fernandes said the deal was a thing of the past now and that AirAsia would not be open to such a deal in the future.

Mitsui & Co plans to raise investments here

By Sharen Kaur

JAPAN'S Mitsui & Co Ltd, which has stakes in Perodua and Integrated Healthcare Holdings (IHH) Bhd, aims to increase its investments in Malaysia.

The group is eyeing new businesses and is bullish on prospects here, Shuichi Yoshida, Mitsui & Co (Asia Pacific) Pte Ltd (MCPL) chief executive told Business Times in an interview.

MCPL, a Mitsui & Co's unit, started operating in Malaysia in 1963.

Mitsui & Co now has 20.5 per cent stake in IHH, which is Asia's largest private hospital group and Khazanah Nasional Bhd's healthcare business.

It also owns seven per cent of Perusahaan Otomobil Kedua Sdn Bhd(Perodua), which is majority-controlled by UMW Corp Sdn Bhd.

Last year, it acquired 19.99 per cent stake in Medini Iskandar Malaysia Sdn Bhd, a company majority owned by Iskandar Investment Bhd (IIB), which, in turn, is owned by Khazanah, Kumpulan Prasarana Rakyat Johor and the Employees Provident Fund.

Mitsui & Co has also invested in a joint venture with Kuala Lumpur Kepong Bhd to produce Palmera fatty acids and glycerine, and with Petroliam Nasional bhd, for gas distribution nationwide.

According to Yoshida, Mitsui & Co is exploring investment opportunities in infrastructure development, including railway-related works.

Malaysia is expected to spend some RM160 billion on rail-related projects such as the Mass Rapid Transit Lines 2 and 3 and Kuala Lumpur-Singapore high-speed rail by 2020.

Mitsui & Co previously helped to develop Malaysia's electrified double-tracking project from Kuala Lumpur to Ipoh.

"We are interested in all areas of development as we are optimistic of Malaysia's projected growth. We are also eyeing investments in new technology for upstream fields. These include agriculture, chemicals and fertilisers," he said.

Yoshida said Mitsui & Co plans to also contribute towards the development of the Rapid petrochemical complex in Pengerang, Johor.

Majestic Hotel reigns high

By Sharen Kaur

THE Majestic Hotel Kuala Lumpur, a jewel in YTL Corp Bhd's classic hotels collection, has exceeded the expectations on both revenue and occupancy in its first year of operations.

Director of sales and marketing Anna Olsson said the hotel achieved high occupancy, thanks to support from clients and business partners since its opening in December 2012.

"The driving forces have been to stay true to our product and service level. In this day and age where information is so easily accessible, hotels must stand out by offering unique services and experiences for their guests.

"I believe The Majestic Hotel is a hotel that provides just that; a national treasure with its colonial heritage dating back to 1932 and unique experiences," she told Business Times here, recently.
The 300-room hotel offers 24-hour butler service in the Majestic Wing suites, Truefitt & Hill gentlemen's grooming centre, and private dining room with chef on call at The Smoke House and Afternoon Tea at the Orchid Conservatory.

It is the only hotel in Kuala Lumpur that is part of The Leading Hotels of The World's (LHW) luxury hotel collection.

LHW is the world's largest collection of luxury hotels with more than 430 properties in 80 countries.

The original structure of the British colonial-inspired hotel was designed by Dutch architect Von Leangeanderg and built in 1932. It closed in 1984.

YTL Corp restored and reopened the property in 2012 as a luxury hotel after a hiatus of 18 years.

The Majestic Hotel has picked up several awards in its first year of operations, winning the prestigious Hotel of the Year award at the recent HAPA awards, Best City Hotel and Excellence Award for Best Boutique Stay at the Best of Malaysia Awards by Expatriate Lifestyle, as well as being included in Conde Nast Traveller's Hot List of the world's best new hotels and DestinAsian's exclusive The Luxe List.

"Sometimes the resurrection of a hotel can herald a second renaissance. The hotel has been a national treasure since 1932 and is now beautifully and authentically restored," Olsson said.

Olsson said 2014 looks promising, with the Visit Malaysia 2014 campaign and the hotel is confident it will achieve new goals and expectations.

She said the campaign should help the hotel increase awareness and bookings especially for MICE (meetings, incentives, conferences and exhibitions) and leisure travellers.

YTL's classic hotels collection also comprise Cameron Highlands Resort in Pahang, Swatch Art Peace Hotel Shanghai in China, and Gainsborough Bath Spa Hotel in the UK.

March launch for Phase 2 of Ion d'Elemen project

By Sharen Kaur

NCT Group will launch Phase 2 of Ion d'Elemen, its RM1 billion project in Genting Highlands, Pahang, early next month, says its founder and group managing director Yap Ngan Choy.

Phase 2 will feature 279 serviced apartment units, selling at more than RM890 per square foot (psf), Yap said.

The apartments, which are fully furnished, range from 1,000 sq ft to 1,300 sq ft each.

Yap told Business Times he is bullish on sales and expects volume to be driven by Malaysians who are looking to stay in the highlands.

When NCT launched Phase 1 a year ago and all 248 units were sold out within seven months.

The units in the first phase were sold at RM840 psf and around 70 per cent were purchased by locals. The rest buyers buyers from China, Singapore, Taiwan, Hong Kong, Iran and Bangladesh, Yap said.

Ion d'Elemen is a resort-styled five-star serviced apartment project, designed using the five elements in Chinese philosophy - wood, fire, earth, metal and water - as base.

It stands at more than 6,000 ft above sea level. Its colours, structure, building materials and green landscaping all revolve around the five elements.

The 4.08ha project will have a total of 1,001 apartments in seven towers and developed over the next four to five years. Each block has its designated element to enhance the feng shui flow.

Yap said the third and final phase will be launched by the end of this year and prices will start from RM910 psf.

"Besides staying in the highlands, owners will enjoy five-star services from Best Western Premier and the seven per cent rental yields.

The hotel group will be managing all the apartments upon vacant possession starting 2016," Yap said.

Under the agreement, the hotel brand will render hospitality and building management services for at least five years.

Yap said when the contract with Best Western Premier expires, NCT will embark on a profit sharing scheme with the purchasers.

YTL's UK move `to offset thinning power margins'

By Sharen Kaur

YTL Corp Bhd is increasing its investments in the United Kingdom (UK) to alleviate the impact of thinning margins from its power generation business in Singapore, analysts say.

According to them, YTL's power generation business in the city-state is facing slow growth due to stiffer competition in the wholesale electricity market as a result of various liberalisation measures introduced by the Singapore government.

YTL Power International Bhd (YTLPI), a unit of YTL, owns and operates some 5,500MW of gas-, oil- and coal-fired power generation plants in Malaysia, Singapore and Indonesia.

In Singapore, its subsidiary PowerSeraya Ltd is the second largest power generation company in terms of installed capacity, with a total licensed capacity of 3,100MW.

"The YTL management had indicated that it is relatively easy to manage costs in the UK due to low interest rate and a more structured regulatory environment. This is why we believe that YTL will increase its investments there," said an analyst from MIDF Research.

Business Times reported yesterday that YTL is scouting for more assets in the UK, including completed luxury boutique hotels.

An analyst from a foreign research house expects YTL's investment in the UK to focus on building its existing water and hotel assets, and venturing into the power business.

YTL currently has a 100 per cent stake in Wessex Water Services Ltd via YTLPI.

Its subsidiary, YTL Hotels & Properties Sdn Bhd, owns Gainsborough Bath Spa Hotel, which is scheduled to open later this year. YTL Hotels also owns Thermae Development Co Ltd, which it recently acquired for STG12 million (RM65.6 million).

"The last time we spoke to YTL in December, they said that Wessex Water will remain their core income generator from the UK, and that they will cover more water services apart from water supply and sewerage services," the analyst from MIDF Research said.

Wessex Water contributed about 15 per cent and 50 per cent to YTLPI's revenue and net profit, respectively, for fiscal year 2013.

YTL yesterday closed one sen lower at RM1.57 a share.

YTL keen on UK boutique hotels

By Sharen Kaur

YTL Corp Bhd, which owns Wessex Water Services Ltd in the United Kingdom, is scouting for more assets in the country, sources said.

They said YTL, which is controlled by Tan Sri Francis Yeoh, is eyeing completed luxury boutique hotels there.

"YTL is bullish on its prospects in the UK. It also has the funds and close ties with bankers to expand its business there," a source told Business Times.

Its subsidiary, YTL Hotels & Properties Sdn Bhd, will be opening Gainsborough Bath Spa Hotel, its first hotel in the UK, in the third quarter of this year. It will offer 99 rooms starting from STG289 (RM1,572) a night.

YTL Hotels bought the property, which is located at the Unesco World Heritage City of Bath, for around STG18 million in 2012. It then invested another STG12 million to build a new wing, the Spa Village Bath, and thermal pools.

The hotel is YTL's third UK asset, besides Wessex Water. YTL Hotels had recently acquired Thermae Development Co Ltd, which holds the licence to operate the Thermae Bath Spa complex, for STG12 million.

Mercury Securities head of research Edmund Tham believes that the YTL group will expand its existing businesses in the UK for future gains.

"Just like Genting Bhd, SP Setia Bhd and the Employees Provident Fund, all of them seem to like investing in the UK because of the returns and future prospects.

"Yeoh has developed a high taste and niche for luxury assets and the UK is the right place to accumulate those properties," he said.

The Gainsborough Bath Spa Hotel is the fourth in the YTL Classic Hotel collection after Majestic Hotel Kuala Lumpur, Cameron Highlands Resort in Pahang and Swatch Art Peace Hotel Shanghai in China.

YTL Hotels also owns Gaya Island Resort in Sabah, Tanjong Jara Resort in Terengganu, five city hotels managed by various Marriott brands, the Muse collection of bespoke properties, Niseko Village in Japan and The Surin in Phuket, Thailand.

Tham said profit contribution from the current UK assets will be huge because of foreign exchange gains.

YTL Hotels executive director Datuk Mark Yeoh Seok Kah said although its investment in Bath is small, the accretive value is positive.

Meanwhile, Majestic Hotel KL sales and marketing director Anna Olsson said YTL Hotels will examine the possibility of further additions to its existing collection.

"YTL Hotels will expand when the opportunity presents itself," she replied via email.

UEM Sunrise, KLK in RM20b tie-up

By Sharen Kaur

UEM Sunrise Bhd and Kuala Lumpur Kepong Bhd (KLK), Malaysia's third biggest palm oil producer, will jointly develop two property projects in Iskandar Malaysia, generating RM20 billion in gross development value over 15 years.

The companies formalised separate agreements yesterday to form joint-venture companies and develop land parcels in Fraser Metropolis, which is part of KLK's Fraser Estate in Kulai, and Gerbang Nusajaya.

This is the first tie-up between both parties and also marks KLK's maiden venture into the Johor property market.

According to UEM Sunrise and KLK chiefs, they will be using internal funds and borrow from banks for the developments.

The Fraser Metropolis project involves the construction of residential, industrial and commercial properties worth RM15 billion on 1,000ha over 15 years. It will be developed by Aura Muhibah Sdn Bhd, which is 60 per cent owned by UEM Sunrise and the rest by KLK.

The project in Gerbang Nusajaya will be developed by Scope Energy Sdn Bhd, a 60:40 joint venture led by KLK. The project will see the development of residential and commercial properties worth RM5 billion over eight years on 200ha.

Aura Muhibah and Scope Energy will acquire the land parcels from UEM Sunrise and KLK, respectively, for the two projects.

UEM Sunrise chief operating officer (commercial) Raymond Cheah said the partnership was established to leverage on resources and enhance land value on both sides of Nusajaya and Kulai.

"Partnerships such as these increase foreign direct investments as we open valuable tracts of landbank and job creation is our key," he said after the signing ceremony yesterday.

Cheah said the projects will comprise both landed and high-rise units catering to all segments of the market.

In terms of target market, he said 50 per cent of UEM Sunrise buyers are locals, with the rest being investors from Japan, South Korea, Singapore and Indonesia.

UEM Sunrise executive director Datuk Izzaddin Idris said the company will recognise profits next year from the sale of the land parcel to Aura Muhibah and the launch of the projects.

"We expect to start construction in 18 months. We are in the process of getting all the approvals and appointing consultants. The faster we do this, the earlier we can launch," he said.

Marubeni seeks new opportunities in Malaysia

By Sharen Kaur

JAPAN'S Marubeni Corp, which does logging in Sabah and Sarawak, is eyeing projects in the oil and gas (O&G) sector, including the Pengerang petrochemical complex in Johor.

Its country general manager for Malaysia, Takuji Harada, said Marubeni is upbeat on Malaysia's O&G sector.

Petroliam Nasional Bhd (Petronas) is undertaking major steps to stimulate the O&G industry with billions of ringgit of investments going into risk-service contracts and more discoveries of deepwater reserves.

Petronas will also invest tens of billions of ringgit in upstream capital expenditure. The move comes in the face of Malaysian oilfields now entering their mature phase, after more than 30 years of extensive exploration and production.

Apart from O&G, Harada said, Marubeni is also eyeing investment opportunities in the railway sector such as the RM160 billion expenditure for rail-related projects, including the Mass Rapid Transit Line 2 and 3 and the Kuala Lumpur-Singapore high-speed rail by 2020.

The Japanese-listed group is also keen to help develop the Tun Razak Exchange (TRX), Harada said in an interview here.

TRX is a RM26 billion mega property development and financial hub that was launched on July 30 2012.

"We are quite bullish on Malaysia's growth. Global economic data also shows improvement in key markets. Japan's economy is also expanding and as a diversified group, we always seek new investment opportunities," he said.

Marubeni has been operating in Malaysia since 1958.

The group now exports logs and building materials from Sabah and Sarawak to Japan and China.

It is also involved in trading of palm-related products such as oleo chemicals.

Marubeni has a factory near the Kuala Lumpur International Airport in Sepang that makes carton boxes.

In the railway sector, it helped design the Class 91, a type of electric multiple unit (EMU) for Keretapi Tanah Melayu Bhd, which has been operating since 2009.

It designed the five sets of six-car EMUs for manufacturers Hyundai Rotem of South Korea and Mitsubishi Electric of Japan.

Sunway REIT bullish on RM7b target

By Sharen Kaur
Published in NST on February 15, 2014

PETALING JAYA: Sunway REIT is upbeat its asset portfolio will exceed RM7 billion by 2018, led by current asset enhancement initiatives (AEI) and third party acquisitions.

However,, the value will still be far behind that of KLCC Property Real Estate Investment Trust, which has RM15 billion worth of properties in its portfolio.

Sunway REIT, the second largest local REIT player, currently has a portfolio worth RM5.18 billion.

Its assets include the Sunway Pyramid shopping mall, Sunway Carnival shopping mall, SunCity Ipoh hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel and Sunway Putra Place.

Sunway REIT Management Sdn Bhd (SREIT) chief executive officer Datuk Jeffrey Ng said the company has RM1 billion to reinvest in AEI to boost some of the current assets.

The manager of Sunway REIT is investing RM460 million to transform Sunway Putra Place in Kuala Lumpur into a five-star asset comprising Sunway Putra Mall, Sunway Putra Hotel and Sunway Putra Tower.

Sunway REIT bought Sunway Putra Place during a public auction in 2011 for RM522 million.

Ng said the property will have a new look by June next year and expects to recoup Sunway Putra Place investments within 12 years at a return on investment rate of between 7.5 and eight per cent.

"The asset will be revalued in the future and there is potential for capital appreciation, which will add to the value of our current portfolio.

"We do expect improvements in terms of occupancy and rental rates and additional net lettable area, which will lead to a quantum leap in net profit income post-refurbishment," he said at a briefing, here, yesterday.

On the third-party acquisitions, Ng said SREIT will consider them but the assets must be able to provide a seven per cent yield.

He, however, said the company is in no hurry to acquire new properties.

"High property prices make it difficult for us to expand via acquisition of quality, yield-accretive assets. The key drivers for growth will be organic through AEI and asset turnaround," Ng said.

The last SREIT acquisition was in 2012, when it bought Sunway Medical Centre from Sunway Bhd for RM310 million.

MRCB eyes a piece of Kwasa Damansara

By Sharen Kaur

RM5B GDV POTENTIAL: Company negotiating land deal in township with EPF, sources say

Malaysian Resources Corp Bhd (MRCB) is eyeing sizeable land in Kwasa Damansara, Selangor, that could translate into more than RM5 billion in gross development value (GDV), sources said.

They said MRCB is negotiating the land deal in Sungai Buloh with the Employees Provident Fund (EPF).

EPF’s unit, Kwasa Land Sdn Bhd, is the master developer of the 1,215ha township, which has a GDV of RM50 billion.
It is unclear how much MRCB, which is about 38 per cent controlled by the EPF, will pay for the plot of land it is eyeing.

A week ago, Pink Corner Sdn Bhd acquired 1.73ha for RM13.07 million, or RM70 per sq ft (psf), from Kwasa Land, while TRC Land Sdn Bhd paid RM6.13 million, or RM82 psf, for 0.69ha.

The two plots were sold above the reserved price by 13 per cent and 11 per cent, respectively.

Kwasa Land is projecting revenue of RM11 billion from sales of 540ha to public limited companies, government-linked companies, private developers and Bumiputera developers.

It bought the land from the Rubber Research Institute in 2012 for RM2.28 billion. 

Analysts said MRCB can expect a rosy 2014 in terms of share price and earnings after a lacklustre performance last year, if it secures the deal soon and develops the land immediately.

Its earnings will also be driven by the RM6 billion PJ Sentral development and planned divestment of its 30 per cent stake in the concessionaire of Duta-Ulu Kelang Expressway (Duke) for RM230 million cash, they said.

For the nine months to September 30 2013, MRCB posted a net loss of RM111.34 million from a profit of RM63 million a year ago while revenue fell 37.3 per cent to RM607.4 million.

MRCB shares have succumbed to selling pressure, dipping to a 10-month low last December due to uncertainty about the company's prospects.

Investors, however, chased the stock ahead of MRCB's announcement of an asset disposal to a real estate investment trust last week.

AmResearch has re-initiated coverage on MRCB with a "buy" rating and a fair value of RM2.20 per share, a 20 per cent discount to its net asset value of RM2.75 per share.

Kenanga Research also upgraded its rating on the stock to "outperform" from "market perform", with a higher target price of RM2.01 from RM1.40 previously.

Kwasa Land has completed a pre-qualification exercise that has attracted 152 developers for the township development.

The top bidders include SP Setia Bhd, UEM Sunrise Bhd, Sunway Bhd, Mah Sing Group Bhd, IJM Land Bhd, Glomac Bhd, Gadang Holdings Bhd, WCT Bhd and Tropicana Corp Bhd.