KL-Singapore HSR offers massive economic spillovers

By Sharen Kaur

KUALA LUMPUR: THE Kuala Lumpur-Singapore high-speed rail (HSR) project will have massive economic spillover benefits beyond Malaysia’s shores when it is linked to the 5,000km Pan-Asian HSR that connects Kunming in China to Singapore.

The Kuala Lumpur-Singapore HSR link, when completed by 2022, will spur new opportunities in logistics, port and property development. Transport Minister Datuk Seri Liow Tiong Lai said beyond Malaysia and Singapore, the Singapore-Kunming railway line would improve connectivity, benefiting multiple economies along the link. China is building the Pan-Asian HSR to connect the country with Myanmar, Vietnam, Cambodia, Thailand, Malaysia and Singapore.

“The Kuala Lumpur-Singapore and the Singapore-Kunming lines will bear fruit under the One Belt, One Road initiative by China. It will also improve connectivity between Malaysia, China and the world,” said Liow when opening the China High Speed Railway exhibition, here, yesterday.

One Belt, One Road is a framework mooted by China’s President Xi Jinping in 2013 to increase connectivity and foster cooperation among countries along the route. It has two components — the land-based “Silk Road Economic Belt” (SREB) and the ocean-going “Maritime Silk Road”. The Pan-Asian HSR is the Southeast Asian portion of the SREB. It comprises east, middle and west lines, which all start from Kunming and run, respectively, through Vietnam, Cambodia, Laos and Myanmar and merging in Bangkok, Thailand. The railway network will enable trains to travel at up to 200kph and eventually pass through Kuala Lumpur and stop in Singapore.

The Kuala Lumpur-Singapore HSR line, meanwhile, is one of the government’s Entry Point Projects to improve the economic dynamism of Kuala Lumpur and its liveability rankings relative to other global cities. The benefits of the network are numerous — reducing travel time to Singapore (from four or five hours to just 90 minutes), easing traffic congestion on roads and improving connectivity, among others.

The current daily traffic congestion between Singapore and Kuala Lumpur is acute and traffic far exceeds the capacity of the Causeway and Second Link. Creating value around HSR stations will be the hallmark of the Kuala Lumpur-Singapore rail project, with plans to build new townships, integrated property developments, affordable housing, education facilities and technology parks.

There will be six stations along the route — at Bandar Malaysia, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya, along with the Jurong East terminus in Singapore. Meanwhile, according to Liow, the Request for Information (RFI) exercise for the Kuala Lumpur-Singapore HSR project had been completed and was undergoing data analysis. Malaysia’s Public Land Transport Commission and Singapore’s Land Transport Authority had called for a joint RFI for the project and received 98 submissions.

The companies and consortia came from across the HSR value chain and included parties based in Malaysia, Singapore and other Asia-Pacific countries, as well as Europe, the Middle East and North America. “We are summarising the RFI and once we are able to complete discussions with Singapore, we will call for an open tender,” said Liow.

Business Times reported recently that works on the HSR project might start in early 2018 at a likely cost of RM65 billion. This was based on the current estimated HSR cost per km for systems and tracks of US$10 million (RM42.6 million). This means for a total length of 350km, systems and track works could cost RM15 billion. The civil infrastructure cost is about three times more than the systems and track works, and that could amount to RM45 billion. For the total 350km, it is estimated that there should be at least 60 four-car train sets, with 30 sets each to serve the express and transit services. The cost to purchase the 60 train sets would be about RM5 billion. These are current estimates for the HSR project based on today’s market price for raw materials and the value of the ringgit versus the US dollar.

Deputy Minister in the Prime Minister’s Department Datuk Razali Ibrahim had said the HSR was expected to contribute RM100 billion to Malaysia’s gross domestic product.

Meanwhile, the China High Speed Railway exhibition, which ends on Tuesday, is organised by China Railway, China Investment Corp, Changchun Railway Vehicles Co Ltd, CRSC and the Export-Import Bank of China. State-owned China Railway, which will be awarded a contract to build the Gemas-Johor Baru electrified double-tracking project (EDTP), is also eyeing the Kuala Lumpur-Singapore HSR project. China Railway chief engineer He Huawu said by year-end, China would be operating more than 19,000km of HSR lines, or more than 60 per cent of the world’s total.

By end-2020, the rapid passenger traffic network of the country — composed of HSR and other railway lines — would hit 50,000km, connecting almost all cities. “China serves the longest mileage and the most advanced of HSR structures in the world,” said He. China had built at least 34 lines of the HSR globally, which covered 160 cities, with more than 3,000 electric multiple unit in a daily operation and more than three million passengers. 

Malaysia studying global projects for best model for its high speed rail development

By Sharen Kaur

KUALA LUMPUR: Malaysia High-Speed Rail Corp (myHSR) Sdn Bhd is looking at high-speed rail (HSR) projects around the world to come up with the best proposal for the Kuala Lumpur-Singapore HSR. Chief executive officer Mohd Nur Ismail Mohamed Kamal said the company was studying the US$68 billion (RM293 billion) California bullet train project, the 370km Las Vegas-Los Angeles railway network and the London-Birmingham Railway. 

In addition, it is also looking at the Haramain link in Saudi Arabia and the Beijing-Moscow network, which is expected to be the world’s longest HSR line. The United Kingdom government plans to invest more than £70 billion (RM459 billion) in all forms of transport by 2021. High Speed 2 (HS2) is part of this and accounts for £16 billion of the overall investment. HS2 will link eight of Britain’s 10 largest cities, serving one in five of the country’s population. 

The Haramain HSR project, meanwhile, links the holy cities of Mecca and Madinah via Jeddah and the King Abdullah Economic City. The 450km railway is estimated to cost 37.5 billion Saudi riyal (RM43 billion). Mohd Nur Ismail said the company and the Public Land Transport Commission had been studying the projects in the last few months and visited the sites. 

“We studied delivery approaches for the HSR project, cross-border operations, and the operating structure, among others. In the UK, they have different operators running on the lines. We are studying the pros and cons and merits of running such a structure. “We are looking at the business model of HS2 and are in discussions with the operator. We find it interesting that HS2, from the start, hired a very few key people and have been able to operate at a low cost. “We also met Euro Star on how they operate the London-Paris route. All its trains traverse the Channel Tunnel between the UK and France, owned and operated separately by Eurotunnel. Their service also runs on High Speed 1 (HSI) in southern England. The French and Belgian parts of the network are shared with Paris-Brussels Thalys services and also with TGV (high-speed) trains. We want to know how they manage all these,” he said. 

Meanwhile, Mohd Nur Ismail said the bilateral agreement for the Kuala Lumpur-Singapore HSR was expected to be signed in the first quarter of next year. Once the agreement is signed, the company will call for open tenders in batches for systems, track and civil works, among others. “The key thing now is still the G2G (government-to-government) negotiations with both the governments on the operation aspect of the HSR, security, project structure as well as Customs and immigration. We have to come up with the bilateral agreement so we can move forward,” he said. He said the biggest cost for the Kuala Lumpur-Singapore HSR would be civil infrastructure, including the building of tracks, tunnels, bridges and stations. “It would take up between 65 and 70 per cent of the total cost for the project,” he said. Around 30 per cent of the total cost would be for rolling stocks, systems and manpower. The final cost, he said, would depend on the choice of technology, alignment and how the HSR is linked to Singapore. “Both countries will tender out separately the civil infrastructure contracts. As long as the structure has been agreed upon or as previously agreed, the tender procedure should be clear,” he added.

                               Malaysia High-Speed Rail Corp (myHSR) Sdn Bhd chief executive officer 

                                                    Mohd Nur Ismail Mohamed Kamal 

MRCB looking at funding options; may dispose off stake in EDL Expressway

By Sharen Kaur

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) may hive off some of its assets, including its stake in the Eastern Dispersal Link (EDL) Expressway in Johor, as it looks for another source of funding next year.
The concession is worth more than RM1.2 billion and selling its stake will help MRCB partially finance the new jobs that it secured recently in the Greater Kuala Lumpur/Klang Valley. These include a RM1.63 billion job to regenerate the Bukit Jalil National Sports Complex (to be called KL Sports City), a joint venture with Cyberview Sdn Bhd to develop the Cyberjaya City Centre (CCC), which is expected to generate RM11 billion in gross development value, and a RM3.1 billion contract to develop Kwasa Utama in Sungai Buloh.
MIDF equity research head Syed Muhammed Kifni said apart from equity placement or rights issue, another source of funding might come from the disposal of the EDL Expressway stake.
MRCB executive director Imran Salim told Business Times it was eyeing several funding options. “We are also looking at a development fund for some of the bigger projects, especially CCC. We don’t want to borrow from banks as we are seeking to lower our debt. We aim to be a stronger company, financially.” MRCB told Bursa Malaysia on Monday it planned to raise gross proceeds of up to RM612.1 million via a proposed private placement of up to 20 per cent of its issued and paid-up capital, at an indicative price of RM1.24.
The primary objective of the exercise is to increase its Bumiputera shareholding to a minimum of 35 per cent from 28 per cent currently. This is a key requirement for MRCB to be a Bumiputera-controlled public-listed company, for which it had already received approval in principle.
Gapurna Sdn Bhd, the developer of Petaling Jaya Sentral with assets worth more than RM8 billion, has indicated that it may subscribe up to 120 million placement shares. The company is controlled by MRCB group managing director Tan Sri Mohamad Salim Fateh Din and his wife, Puan Sri Yasmin Mohamed Ashraff. Gapurna is the second-largest shareholder of MRCB, with a 16.7 per cent stake. The other major shareholders of MRCB are the Employees Provident Fund (38.4 per cent) and Tabung Haji (10.1 per cent). From the proceeds, MRCB will allocate RM371.5 million for property development activities, RM142.77 million for general working capital and RM85 million to repay borrowings.
As of October 30, MRCB’s borrowings stood at RM3.69 billion with gearing at 1.83 times. The repayment of borrowings will reduce its debt to RM3.6 billion and gearing to 0.88 times.
The stock fell six sen to close at RM1.36 yesterday, with 8.51 million shares traded. Syed Muhammed said the debt/equity level of the company was relatively higher in comparison to its peers. “That arguably may be the reason why MRCB seems hesitant to incur more borrowings, which we reckon is the right and prudent course to follow. We, too, reckon there is going to be more fundraising exercises to finance the Bukit Jalil regeneration and CCC projects.”
 MIDF is maintaining MRCB’s target price at RM1.70. It believes that the current share price has yet to fully reflect MRCB’s fundamentals.
 AmResearch analyst Mak Hoy Ken said MRCB had a few options to strengthen its balance sheet, including recycling the capital locked up in its investment properties into its 31 per cent-owned MRCB Quill REIT.
 “In addition to the earlier monetisation of its non-core assets, such as the disposal of Duta-Ulu Klang Expressway, it may explore the creation of private property funds with select institutional investors to co-finance its development projects.
“Recycling of capital in the context of monetising its prime investment properties in KL Sentral into its real-estate investment trust (REIT) will help deleverage its balance sheet. This includes the earlier injection of Platinum Sentral into MRCB Quill REIT,” he said.
Mak believes investor attention would now gravitate towards how MRCB monetises its assets, following the recent slew of net asset value (NAV) accretive deals that was announced.
 “This will help narrow the discount the stock trades viz-a-viz its NAV,” he said.

Transforming PJ's skyline

By Sharen Kaur

KUALA LUMPUR: THE conversion of land use from industrial to commercial at Section 13 in Petaling Jaya, Selangor, has resulted in a boom and bust of mixed-used developments, which are spurring economic activities.
 
  Initially an industrial enclave, the change in Section 13 over the years is aimed at creating a vibrant and sustainable neighbourhood.
 
  According to the Petaling Jaya City Council Special Area Plan for Section 13, the area covers 101.96ha and its pioneer developments include the integrated development Jaya33 and office development Plaza33 by Jaya33 Sdn Bhd, as well as Tetap Tiara Sdn Bhd's Jaya One.
 
  Recently completed projects included the 85-bed Columbia Asia Hospital and Inspiration Group's RM500 million integrated development called CentreStage.
 
  There are several ongoing and pipeline developments with gross development value (GDV) exceeding RM8 billion. These include Pacific Star by Island Circle Development Sdn Bhd and PJ Midtown by IOI Properties Group Bhd and Sime Darby Brunsfield Holding Sdn Bhd.
 
  Paramount Property Development Sdn Bhd is looking to develop a project with a GDV of RM730 million next to Sin Chew Media Corp Bhd in Jalan Universiti. It will comprise four office towers, two residential towers and 78,000 sq ft of retail space.
 
  Another development in the pipeline is Fraser Square, which is being undertaken by a joint-venture entity between Fraser & Neave Holdings Bhd (F&N) and its sister company, Singapore-based Frasers Centrepoint Ltd (FCL).
 
  Construction on the project is expected to start in 2017.
 
  The FCL group is a prominent property developer with impressive track records in Singapore, China, Australia, New Zealand, Thailand and the United Kingdom.
 
  In 2013, the joint-venture company obtained approval for its Master Development Plan and went on to enhance the project's design by drawing upon FCL's expertise.
 
  Despite obtaining building approval, the launch of Fraser Square had been postponed due to weak market sentiment.
 
  F&N chief executive officer Lim Yew Hoe said recently that the company expects to make an update on the development by the middle of next year.
 
  "We are taking advantage of the softening market to look at a more suitable concept for the land with our development partner. The last concept was concluded more than three years ago, so it is a blessing in disguise as we will be building based on current market trends. Once we agree on a new concept, we hope to implement everything as soon as possible and announce something in the next six months," Lim said.
 
  Fraser Square is expected to change the Section 13 skyline upon its completion as it will feature a 50-storey corporate office tower.
 
  The project is also expected to woo investors and property buyers because of its location, product offering and F&N's reputation.
 
  Although F&N is a food and beverage company, it has undertaken a few projects in the past. Its first foray was turning its former factory land at Jalan Foss into a vibrant commercial spot called the Fraser Business Park.
 
  Fraser Square will sit on a 5.15ha site in Section 13 that formerly housed F&N Dairies Malaysia's manufacturing plant.
 
  The project has been earmarked for an integrated residential and commercial development encompassing three 32-storey serviced apartment blocks with about 900 units, a 50-storey corporate office tower, a four- or five-star hotel with 16 floors, and a SoHo (small-office-home-office) building.
 
  Based on the current plan, Fraser Square is expected to generate a GDV of RM2 billion, but this may increase as the product offering for the project is still being finalised, said F&N chief financial officer Soon Wing Chong.
 
  The serviced apartments would offer units of various types and sizes to meet the needs of a wide range of buyers - families, individuals or businesses.
 
  The SoHo units will measure less than 500 sq ft, Soon told Property Times.
 
  On product pricing, he said the joint venture company was still finalising it.
 
  It was reported that F&N postponed Fraser Square over concerns that it might not get its asking price, said to be as much as RM1,200 per sq ft (psf), for Trilight Residences - the three serviced apartment blocks.
 
  F&N had planned to launch Trilight Residences - Phase 1 of the Fraser Square project - with a total GDV of RM600 million last April.
 
  Sources said F&N may re-look at the launch price and it could start from RM850 psf to RM1,100 psf.
 
  Early this year, Island Circle Development sold its three-bedroom 988 sq ft serviced suites from RM914,000, or RM925 psf, while IOI Properties and Sime Darby Brunsfield sold theirs at RM850 psf.
 
  "The timing and pricing for the Phase 1 launch will depend on market sentiment. We have cleared the site... when we finally decide to launch, it will happen quite fast.
 
  "We are still fine-tuning the concept and re-looking the product offerings. We believe there is an opportunity for a premium hotel in Petaling Jaya and have yet to decide whether it would be a four- or five-star property.
 
  "There will be a neighbourhood mall for Fraser Square. It would be something like Bangsar Village in Bangsar Baru. We have the building approvals in place.
 
  "Next is the case of alteration to the plan. We will re-submit the approvals as there will be changes to the plan," said Soon.

'DMIA ready to call for tenders for KVDT sub-contract jobs'

By Sharen Kaur

KUALA LUMPUR: DMIA Sdn Bhd has won a RM1.4 billion contract from the Transport Ministry to upgrade the Klang Valley double-tracking (KVDT) system for Keretapi Tanah Melayu Bhd (KTMB).
 
  The job was awarded about two months ago under direct negotiations with the ministry.
 
  DMIA had been lobbying for the project for more than three years.
 
  The contract entails the upgrading of systems work between Rawang and Seremban, and from Sentul to Port Klang, involving about 150km, which is expected to cost around RM750 million.
 
  The remaining sum is for the upgrading of tracks between Rawang and Salak South near Bandar Malaysia.
 
  The KVDT was built in the 1990s by Indian Railway Construction and is running on old technology. The upgrading of the railway line is important as it offers an alternative and affordable mode of transport for commuters.
 
  People close to DMIA said the company was preparing to call for tenders soon  for sub-contract works for the project.
 
  "This is a project fully-funded by the government. Any cost overrun will have to be borne by DMIA. The company  is calling for tenders and will award the sub-contracts to suitable parties," said a source.
 
  DMIA will receive progressive payments from the government for the duration of the project.
 
  The source said DMIA was targeting to maintain cost at between RM950 million and RM1 billion and keep profit margin at 25 per cent.
 
  There is market talk that DMIA may rope in international expertise in the likes of Ansaldo, Siemens, Alstom, Thales Group and Bombardier for the systems work to spread out the risk.
 
  "The only problem with international expertise is that cost may rise over time because of currency fluctuations. It also means that there will be less local participation," said the source.
 
  The controlling shareholder of DMIA is Datuk Subramaniam Pillai, a low-profile businessman.
 
  DMIA had previously partnered Malaysian Resources Corp Bhd for the beautification and upgrading works of Little India in Jalan Tun Sambanthan, Brickfields, here, as well as other development projects in the area.

Real estate growth picks up speed

By Sharen Kaur

KUALA LUMPUR: REAL estate activities are expected to accelerate in the Northern Corridor Economic Region (NCER), spurred by the development of industrial areas such as Chuping Valley, Kedah Science and Technology Park (KSTP) and Rubber City, as well as the development of Greater Kamunting.
 
  The NCER, comprising Kedah, Perlis, Penang and northern Perak, is the focus for tourism, commercial agriculture and manufacturing industries.
 
  The Northern Corridor Implementation Authority (NCIA) is responsible for providing directions and devising policies and strategies in relation to socio-economic development in NCER, which encompasses 21 districts.
 
  Programmes and initiatives undertaken by NCIA are driving developers in the region to ramp up their product launches and drawing in new players with real estate plans.
 
  Currently, there are more than 100 small, medium and big developers in NCER.
 
  They include Sime Darby Bhd, Eco World Development Group Bhd, Sunway Bhd, SP Setia Bhd, Eastern and Oriental Bhd, Hunza Properties Bhd, IJM Land Bhd, Tambun Indah Land Bhd, Ivory Properties Group Bhd, Jesin Group, Emico Holdings Bhd, EUPE Development Bhd, Paramount Corp Bhd, Epic Valley Holdings Group, Encomas Sdn Bhd, Aima Development Sdn Bhd and Nepta Development Sdn Bhd.
 
  "We are not involved in real estate. However, we facilitate the development of industrial areas such as Chuping, KSTP, Rubber City and Kamunting, by building priority infrastructure and attracting investments," NCIA chief executive Datuk Redza Rafiq told Property Times.
 
  Chuping Valley, a planned growth centre for green technology and environment-friendly manufacturing base, has the potential to transform the Perlis economy in the long term and this includes real estate development, he said.
 
  KSTP, meanwhile, combines a modern industrial park and a global research centre as its key components.
 
  "These two developments serve each other's needs by providing complementary services and solutions. KSTP will also have supporting components such as commercial areas, higher learning and training centres, education institutions and open spaces to create a place to live, work and play," Redza said.
 
  The most interesting development will be the Greater Kamunting project spread over 25 years.
 
  Kamunting is located in Taiping, which is famous for having "33 firsts". They include the first jail, golf course, post office, central police station, lake garden, clock tower, rest house, general hospital, railway, market, port, museum, government girl's school, war cemetery and night safari.
 
  Redza said a bulk of these properties and other areas in Kamunting will be rejuvenated.
 
  "The Greater Kamunting project is aimed at transforming and strengthening economic sectors such as tourism, manufacturing and agriculture in Kamunting and Taiping. These developments will be further accelerated with new infrastructure and human capital initiatives.
 
  "We are hoping to have about RM12.96 billion increase in gross domestic product and create 90,263 jobs by 2030. We are collaborating with Japan International Cooperation Agency to produce electrical buses. As a start, there will be one big bus and a few small ones," he said.
 
  Redza added that NCIA is also enhancing the zoo, while next year, it plans to improve the entrapment ecosystem of a fruit industry.

Eco World, Ballymore launch 3 UK projects

By Sharen Kaur

KUALA LUMPUR: THE EcoWorld-Ballymore Group has launched three innovative projects in London that have recorded a good take-up rate, thanks to the United Kingdom's vibrant real-estate market.
 
  The three projects are Embassy Gardens in Nine Elms, London City Island (LCI) on the Leamouth Peninsula, East London, and Land Wardian London in Canary Wharf.
 
  Eco World International Bhd president and chief executive officer Datuk Teow Leong Seng said London's residential market has outperformed most other global investment asset classes.
 
  He attributed this to the chronic housing shortage with an average of between 20,000 and 25,000 homes per year delivered over the past 10 years versus Mayor of London's estimated requirement of 42,000 new homes a year, with plans requiring boroughs to identify additional capacity to hit 49,000 homes yearly.
 
  Teow said London's growing population from 7.3 million to 8.6 million over the last decade with latest projection estimating it to reach 10 million people by 2035 was also a contributing factor.
 
  "London's residential prices have enjoyed an increase of more than nine per cent per annum in the last five years and outer fringes of London have seen positive price ripple effects.
 
  "Expectations are the London housing market will continue to be supported by growing local demand due to increased household equity, employment growth, low interest rates, a growing regional economy and the international market.
 
  "London is viewed as a safe haven destination for the global wealthy class to invest in, given its high level of regulatory transparency, conducive for foreign property ownership, first-class education attracting students and families from around the globe and a sought-after address for the wealthy," Teow told Property Times.
 
  On the three projects, Teow said its work in progress.
 
  The joint-venture is out to tender the basement contract for Wardian London. The project has been 72 per cent sold and work is targeted to start in the first quarter of next year.
 
  Embassy Gardens is 39 per cent sold and the units are estimated to be completed in 2017/2018.
 
  For LCI, three blocks have so far been launched.

Bina Puri eyes Pan Borneo jobs

By Sharen Kaur

KUALA LUMPUR: BINA Puri Holdings Bhd is vying for a contract in the RM27 billion Pan Borneo Highway project linking Sabah and Sarawak.
 
  Executive director Matthew Tee said the company is preparing to submit its tender documents for the pre-qualification process for main works in the Sarawak portion of the highway.
 
  "We are eyeing road infrastructure works, either as a main contractor or sub-contractor, for some portions," he told Business Times.
 
  The Sarawak section of the highway, stretching 1,090km from Tanjung Datu in the west to Merapok in the north, is expected to be completed by 2021 at an estimated cost of RM16.1 billion.
 
  A state-owned entity started works on the first phase, involving 773km, last month.
 
  Sarawak-based Lebuhraya Borneo Utara Sdn Bhd is the project delivery partner for the 1,090km toll-free stretch.
 
  "We expect more tenders to be called out early next year," Tee said.
 
  Bina Puri could face some competition from key contractors in the state, such as Naim Holdings Bhd, Zecon Bhd, Cahya Mata Sarawak Bhd and Hock Seng Lee Bhd.
 
  Bina Puri owns Kuala Lumpur-Kuala Selangor Expressway Bhd, the concessionaire for the 33km Kuala Lumpur-Kuala Selangor Expressway which was built at a cost of RM958 million. It spans from the north of Templer Park in Rawang to Assam Jawa town in Kuala Selangor.
 
  On the Sabah side, construction on the first phase of the Pan Borneo Highway, connecting Sindumin to Tawau at a distance of 706km, will commence next year, with the cost expected to reach RM12.8 billion.
 
  Tee said Bina Puri is also interested in the Sabah portion of the highway. The entire Pan Borneo Highway will span 2,239km.
 
  Although the ceiling budget is around RM27 billion, the Federal Government is still working to finalise the cost.
 
  The project is expected to accelerate Sabah and Sarawak's development. Economic spin-offs include greater opportunities for businesses to supply and support development of the highway.
 
  Works Minister Datuk Seri Fadillah Yusof said recently the concession agreement for the construction of the highway would be inked by the end of the year.
 
  The Federal Government is discussing with the state governments and related authorities on the technical and financial aspects.
 
  The project will be funded by DanaInfra Nasional Bhd, a fully-owned entity under Minister of Finance Inc.

Rajawali's investments bear fruit

By Sharen Kaur

KUALA LUMPUR: INDONESIA-based Rajawali Group's RM400 million investment to build St Regis Langkawi and the Langkawi International Conventional Centre (LICC) is turning into fruition.
 
  The LICC is up and running with pipeline events while the St Regis Langkawi is set to open on April 6 2016, drawing new crowds.
 
  Rajawali started its investment in Langkawi in 2005 with the acquisition of Sheraton Perdana Resort, which was later rebranded as Westin Hotel Resort & Spa Langkawi.
 
  The group is spending RM300 million to build St Regis Langkawi with 89 suites and four over-the-water villas and its strategic partner for the development is Starwood Hotels & Resorts Worldwide, Inc.
 
  Starwood is the operator of the luxury St Regis Hotel chain. Other brands under its stable include The Luxury Collection, Westin, Le Meridien, Sheraton, Four Points, Aloft and Element.
 
  Rajawali has also invested over RM100 million to build the 5,000 sq ft convention centre which can accommodate up to 1,200 people.
 
  The LICC was developed on a fasttrack mode and completed in 11 months, in time for the Asean Summit in April 2015.
 
  Michael Schlueter, managing director of the three properties (LICC, The Westin Langkawi and The St. Regis Langkawi), said with LICC, Langkawi now has conference facilities and infrastructure of international standards, transforming the island into an international hub for events and conventions.
 
  The opening of St. Regis Langkawi is expected to further enhance the island's standing as a luxury travel destination, he said.
 
  Schlueter said with the positioning of promoting Langkawi as a destination for the luxury market, LICC's state-of-the-art facilities make it fitting to host world class conventions such as the Langkawi International Maritime & Aerospace Exhibition Asean Summit and the Asean Regional Workshop.
 
  "Some of the special features include high end audio visual facilities such as Bose sound systems in all rooms, high ceiling measuring at nine meters with mounted chandeliers to exclude an ornate ambience, a 93 sq m VIP Suite, VIP holding room, lots of natural day light at the foyer areas and all function rooms being pillar-less," he said.
 
  He said LICC will play a pivotal role in supporting a platform for hospitality services for events on the island, supporting the development plans by the government to elevate Langkawi as a world class destination.
 
  "We expect LICC to drive the occupancy of all our properties on the island. We are planning another two hotels in Langkawi. By 2018, we expect to operate more than 600 rooms on the island," he told Property Times.
 
  The 222-room Westin Hotel is currently running at 70 per cent occupancy per annum and room rates start from RM650 a night.

RM11b Cyberjaya City Centre set to steal limelight

By Sharen Kaur

KUALA LUMPUR: Cyberjaya is already abuzz with real estate activities but the one that is going to take the limelight is the RM11 billion Cyberjaya City Centre (CCC) project.
 
  The CCC will be developed in four to five phases on 62.5ha of commercial and enterprise land owned by Cyberview Sdn Bhd, the master developer for Cyberjaya.
 
  Phase 1 of the project will be developed on a 22.3ha site and will generate a gross development value (GDV) of RM5.35 billion. It will feature a 200,000 sq ft convention centre, a 300 to 400 room business hotel, low and high-rise office buildings, and a retail podium.
 
  The CCC will also contain an integrated lifestyle and retail arena, and service residential complexes.
 
  The project will be developed by Malaysian Resources Corp Bhd (MRCB), a key player in transit-oriented developments (TOD), over 20 years.
 
  MRCB executive director Mohd Imran Salim told Property Times that the most iconic structure at the CCC will be a 50-story tower and this will come at the tail end of the project.
 
  "Most of the big buildings will come at the final phase of the development, which is beyond 2025," he said.
 
  Construction for Phase 1 will begin in the first half of next year and the target is to complete the convention centre in time for the World Congress of Information Technology 2020.
 
  Imran said the plan for CCC is to make it work as a TOD, similar to the group's other ongoing developments in Greater Klang Valley and Penang such as the PJ Sentral Garden City, Kwasa Sentral and the Penang Sentral transportation hub.
 
  CCC will be integrated with the MRT Line 2 between Sungai Buloh and Putrajaya and will provide seamless pedestrian connectivity with a walkway from Putrajaya Sentral.
 
  "The MRT2 will be ready in 2021 and it will be linked to Putrajaya Sentral, which is about 350 to 400 metres away. The MRT2 will allow people to easily come to Cyberjaya and Putrajaya."

Timely rehabilitation of Bukit Jalil National Sports Complex

By Sharen Kaur
sharen@mediaprima.com.my

KUALA LUMPUR: THE regeneration of the 17-year-old Bukit Jalil National Sports Complex (NSC) is timely as Malaysia will be playing host to the Southeast Asian (SEA) Games in 2017.
 
  The NSC facilities were built by the UEM-Renong group in 1995 for the 1998 Commonwealth Games and have not undergone any significant refurbishment works since its opening.
 
  The facilities at the sport complex are in serious need of repair. The changing rooms and washrooms are deteriorating, its air-conditioning and ventilation system poor, while other systems, including fire safety and lighting, require an overhaul.
 
  The building facades, meanwhile, are ageing and need a major uplifting.
 
  At the same time, while the NSC is well-connected with numerous access roads and a light rail transit (LRT) station, there is a need to also improve the infrastructure.
 
  All these are about to change with the Federal Government's RM1.6 billion regeneration plan for the complex, which will turn it into an iconic Kuala Lumpur Sports City.
 
  KL Sports City is a fully integrated sports hub that will consist of high performance sports training facilities, a sports rehabilitation science centre, a youth park, public sports facilities, a sports museum, youth hostel, convention centre, and a sports-focused retail mall.
 
  The short term aim is clear - get the NSC ready to host the SEA Games in 2017.
 
  This will involve the regeneration of the Bukit Jalil Stadium and will see some key works carried out at the Putra Stadium, the National Aquatic Centre and the National Hockey Stadium.
 
  There will be a new facade for the national stadium, improvements to fire safety, lighting, washrooms and changing rooms, as well as better public transportation links and increased pedestrian access.
 
  But it's not all about the SEA Games as the government is also looking at taking sports to another level in Malaysia. Once the SEA Games is over, the focus will shift to building KL Sports City.
 
  What all these mean is that the sports city will contain new, world-class infrastructure that is accessible not only to athletes, but also the local community, recreational users and the public. This vibrant sports hub will then be accessible and usable all year round.
 
  Populous, an international expert in sports architecture, is the designer for KL Sports City.
 
  The award-winning company is a global leader when it comes to creating stadiums that not only catch the eye, but also draw people and communities together.
 
  Its previous designs included the Yankee Stadium, the 2012 London Olympic Stadium, South Korea's Incheon 2014 Asian Games Stadium and the Etihad Stadium expansion project in Manchester.
 
  Populous recently revealed designs for an elliptical stadium for London football club Tottenham Hotspur, boasting a retractable pitch that will allow it to also host American football games.
 
  When it comes to the NSC regeneration project and the current state of its facilities, something on this scale and timeline is always going to be ambitious.
 
  But that is just what Malaysia needs - a national stadium that provides a worthy stage for athletes to perform on during the 2017 SEA Games and a sports city that can then inspire us all to live healthier, more active lives.

I-Berhad reshaping Shah Alam

By Sharen Kaur
Published in NST on November 2, 2015

SHAH ALAM: FROM the bedding industry to property development, Tan Sri Lim Kim Hong, founder of I-Berhad, has an eye for adding value, attaining goals and driving revenue.
 
  It all started after Lim sold his cash-generating businesses, which had included mattress production, and started I-Berhad to venture into digital lifestyle product manufacturing and, subsequently, property development.
 
  Through I-Berhad, Lim bought 29ha from the Selangor government for RM60 million in 1993 and finally launched the i-City project in 2005.
 
  At the time, the project, with a gross development value (GDV) of RM1.5 billion, was supposed to be an information and communications technology (ICT) hub with data centres, offices and residential towers.
 
  In July 2011, I-Berhad won a 21-year concession from the state government to manage an additional 12ha under the project. This raised i-City's GDV to RM3 billion.
 
  Today, the project's GDV is touching RM10 billion as the development master plan evolves and becomes the pulse of Selangor.
 
  Lim has invested a total of RM1 billion of personal funds into i-City so far.
 
  The company has completed and handed over three towers - a three-star hotel, i-Residence and an office tower.
 
  It has also invested up to RM80 million to develop a leisure park over 10ha with four attractions, namely City of Digital Lights, SnoWalk, WaterWorld and FunWorld.
 
  This means that I-Berhad has so far developed one million sq ft out of the total 13 million sq ft of approved gross floor area at i-City.
 
  The i-Residence was launched for RM450 per square foot (psf) in 2012 and prices have now exceeded RM600 psf.
 
  New residential launches at i-City, comprising fully furnished units, were going at a rate of 750 psf to 800 psf, Lim told Property Times.
 
  The construction of seven residential blocks are ongoing, including 50-storey blocks with up to 3,000 small office/home office (SOHO) units and 300 retail units.
 
  Six blocks have been launched and I-Berhad has sold 75 per cent of the units to Malaysians. The seventh would be launched latest by early next year, said Lim.
 
  I-Berhad will commence construction on four new buildings by the end of the year, including a four-star hotel that will operate under the Hilton brand, an office tower and two residential blocks offering units with sizes starting from 1,000 sq ft.
 
  Construction of the one million sq feet Plaza Central mall would also commence next month, Lim said.
 
  He said over the next five to eight years, 10 more towers would be built, comprising a five-star hotel as well as residential and office buildings.
 
  "Because of the proposed Light Rail Transit 3 project, we have the opportunity to make this a transit-oriented development.
 
  "In practical terms, it would mean a higher plot ratio, better connectivity to public transportation services and positioning of i-City as a car-park hub for the new LRT station," Lim said.
 
  In total, i-City will have 25,000 parking bays, with 6,000 currently under construction.

UEM Sunrise eyes prime Aussie sites

By Sharen Kaur
sharen@mediaprima.com.my

MELBOURNE: UEM Sunrise Bhd, Malaysia's largest property development company by market capitalisation, is allocating up to A$100 million (RM306 million) to acquire two new prime sites in Australia.
 
  Business Times understands that the company is eyeing strategic sites in Melbourne and Sydney with the deals expected to be completed next year.
 
  UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib said recently that Australia would remain a major long-term market for the luxury property developer.
 
  He expects overseas projects to contribute between 10 and 20 per cent to company's revenue starting next year, led by Australia.
 
  In less than two years, UEM Sunrise had acquired three sites on LaTrobe Street, Mackenzie Street and St Kilda Road in Melbourne for A$123 million.
 
  The three projects are expected to generate a combined gross development value (GDV) of A$1.32 billion over four years up to 2019.
 
  UEM Sunrise will develop Aurora Melbourne Central (GDV: A$770 million), Conservatory (GDV: A$320 million) and St Kilda (GDV: A$230 million) on LaTrobe Street, Mackenzie Street and St Kilda Road, respectively.
 
  The developer launched Conservatory in the Melbourne CBD last week, following a ground-breaking ceremony for Aurora Melbourne Central.
 
  Aurora Melbourne Central with 941 units of apartments is fully sold, while less than 30 per cent of the 446 units at Conservatory remain since its global launch last month.
 
  The third project, St Kilda, will be launched next year.

Chinese firms get letter of intent for Gemas-JB line

By Sharen Kaur
sharen@mediaprima.com.my

Published in NST on November 4, 2015

PUTRAJAYA: A consortium of Chinese companies has been awarded a letter of intent (LoI) for the Gemas-Johor Baru electrified double-tracking project (EDTP) estimated to cost RM9.3 billion.
 
  Business Times understands that state-owned companies China Railway Engineering Co, China Railway Construction Co (CRCC) and China Communications Construction received the LoI from the Transport Ministry several months ago.
 
  The project, involving 197km of double-track rail on existing Keretapi Tanah Melayu Bhd alignment, was mooted more than a decade ago. The Chinese firms have been lobbying for it since then.
 
  "The consortium has to source for Malaysian partners for the project and also meet the requirements of the Finance Ministry's industrial collaboration programme.
 
  "They will have to put in a proposal for the final price negotiation so that the letter of award can be issued by next month. They are currently in negotiations with the Transport Ministry for the letter of award," said a source with knowledge on the matter.
 
  On funding, the consortium will receive progressive payments from the government.
 
  Tenders for the main packages were expected to be called in the first half of next year, said sources.
 
  The consortium is led by CRCC, whose main partner is Fajarbaru Builder Group Bhd.
 
  Fajarbaru's portfolio includes a RM289.44 million construction contract to extend the Ampang light rail transit line.
 
  Previously, it won a RM316 million construction job for Package 2 (Tampin to Batang Melaka) of the Seremban-Gemas EDTP from India's Ircon International Ltd, the main contractor for the RM3.5 billion project.
 
  The Gemas-Johor Baru EDTP is expected to be completed during the 11th Malaysia Plan, which ends in 2020, and will spur economic development in Johor.
 
  The Transport Ministry had put up an advertisement last month to invite public inspection of the project plan, which details the route of the 197km double-track rail with the new alignment's designated speed at 160kph.
 
  The ministry said it had submitted the route plan, details of the route alignment and other related items to the Land Public Transport Commission for the public inspection, which would end on January 26 next year.
 
  The Gemas-Johor Baru EDTP will complement the current EDTP lines from the Klang Valley to Padang Besar, Perlis.
 
  Malaysia has spent about RM24 billion on the EDTP from Port Klang to Batu Caves, Rawang to Ipoh, Ipoh to Padang Besar and Seremban to Gemas.
 
  At the moment, only a single track links Padang Besar to Johor Baru.

'High-speed rail likely to cost RM65b'

By Sharen Kaur
Published in NST on November 5, 2015

KUALA LUMPUR: WORKS on the proposed high-speed rail (HSR) linking Kuala Lumpur and Singapore may commence in early 2018 and likely at a cost of RM65 billion, said people familiar with the matter.
 
  It is understood that the current estimated HSR cost per kilometre for systems and track is US$10 million (RM42.6 million).
 
  "This means, for a total length of 350km, the systems and track works would cost RM15 billion. Civil infrastructure cost is about three times more than the systems and track works so we are looking at RM45 billion.
 
  "We also estimate that there should be at least 60 four-car train sets, with 30 sets each to serve the express and transit services. The cost to purchase the 60 sets would be about RM5 billion.
 
  "These are the current estimates for the HSR project based on today's market price for raw materials and the value of the ringgit versus the US dollar," sources said.
 
  Business Times was the first to report more than five years ago that it could cost the Malaysian government around RM40 billion to build the HSR link, including RM10 billion to buy high-speed trains.
 
  The HSR is expected to cut travel time between Kuala Lumpur and Singapore to 90 minutes, from about five hours now.
 
  The Malaysian terminus will be located in Bandar Malaysia, about 3km from Kuala Lumpur's financial district, while Singapore's will be located at the current site of the Jurong Country Club in Jurong East.
 
  According to the source, private parties are proposing to build the HSR link in return for a 50-year concession.
 
  "That is how long it would take for them to recover their investment in the HSR project should it cost RM65 billion. Both Malaysia and Singapore are still in discussions over how to implement the project.
 
  "It could be on a government-to-government business model where the Japanese or Chinese can come up with the money and fund the development. Nothing is firm yet," the source said.
 
  Deputy Minister in the Prime Minister's Department Datuk Razali Ibrahim said recently that only four per cent of the rail would be in Singapore.
 
  He also said that the HSR is expected to contribute RM100 billion to the country's gross domestic product.
 
  Meanwhile, Malaysia High-Speed Rail Corp Sdn Bhd chief executive officer Mohd Nur Ismail Mohamed Kamal told Business Times that the bilateral agreement was expected to be signed by early next year.
 
  "Once the agreement is signed, it would take about one year or so for tenders to come out. We are fine-tuning details of the proposed alignment and design. We are open to bids from various parties," he said.

HSR bridge link for Nusajaya-Jurong East

By Sharen Kaur
Published in NST on May 18, 2015

SINGAPORE: MALAYSIA and Singapore will build a bridge to link Nusajaya in Johor and Jurong East for the high-speed rail (HSR) connection instead of an undersea tunnel as it will cost five times less.
 
  Malaysian High Commissioner to Singapore, Datuk Husni Zai Yaacob, said based on current estimates, the HSR line between the two points would be 15km.
 
  A 15km rail line from Nusajaya to Jurong East will cost RM1.2 billion to RM1.5 billion while an undersea tunnel of the same length will cost about RM6.5 billion.
 
  Husni said Malaysia and Singapore were on target to ink the bilateral agreement for the HSR link by the end of this year, which would lead to the opening of tenders.
 
  "Basically, it will be the start of the implementation process. Because the HSR link involves two countries, it is very complex. Between now and the end of this year, there will be a lot of discussions.
 
  "We hope to resolve many issues pertaining to the development. The key issues include the alignment.
 
  Once we have sorted that out, we will iron out the location of the customs, immigration and quarantine facilities, and the tenders.
 
  "We will also discuss funding options, technical aspects of the HSR and the company that will operate the service," he said after opening Eco World Development Group Bhd's first international sales gallery, here, last week.
 
  Husni said the HSR link would be a game changer for Malaysia and Singapore as it would provide seamless connectivity. He also said the link was important to improve both countries' economy and strengthen bilateral ties.
 
  "Everybody, including the Singaporeans, are looking forward to it. Singapore is committed to this development. The Singapore government has announced the terminus in Jurong East and that is a clear signal that it wants the HSR to be implemented as soon as possible.
 
  "Since the retreat more than a week ago between both countries' leaders, there has been positive coverage in the Malaysian and Singapore press." Husni said the HSR link would provide a transit service that would take two hours and an express service at 90 minutes.
 
  "The express service will operate between Bandar Malaysia and Jurong East while the transit service will stop in Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya, meeting demand from all segments of the market." Malaysia has confirmed that its terminus will be in Bandar Malaysia, about 4km from the Kuala Lumpur financial district.

`1MDB assets have strong value'

By Sharen Kaur

SINGAPORE: PEOPLE should look at 1Malaysia Development Bhd (1MDB) as a company with strong asset value instead of focusing on its debt level, top banker Datuk Seri Nazir Razak said.
 
  He, however, urged 1MDB to come clean with its financials and build back people's trust.
 
  "If you look at their books, at some level it is sustainable. We shouldn't just look at their debt. We should also look at the company's balance sheet and assets.
 
  "Some RM40 billion or RM50 billion of debts are not a lot. 1MDB has strong assets to back them. They have power plants, as well as the Tun Razak Exchange (TRX) and Bandar Malaysia developments.
 
  "The thing now is, 1MDB should come clean with their financials. They should have an independent body to look at their numbers and get to the bottom of things quickly," said Nazir, who is chairman of CIMB Group Holdings Bhd.
 
  He was speaking during a media luncheon at the Asean Business Council (ABC) Forum 2015, here, yesterday. CIMB is one of the main sponsors of the event.
 
  1MDB's current debt level is RM42 billion. It has power assets and landbank worth about RM50 billion.
 
  The TRX and Bandar Malaysia developments are expected to rake in an estimated gross development value of RM190 billion collectively over 20 years.
 
  To pare down its debt, 1MDB is planning to list its energy unit, Edra Global Energy Bhd, later this year to raise around USD3 billion (RM10.7 billion).
 
  Nazir felt that the controversy arose because 1MDB's board and management were "not equating".
 
  "If the board really have been doing their job, then they should have appointed an independent auditor to view their numbers. Why did they have to wait for the auditor-general or PAC (Public Accounts Committee) to come in?
 
  "We hear a lot of noise in the social media about 1MDB and the company has gone silent. And then we have the Tabung Haji transaction.
 
  The company should just get to the bottom of things quickly." He said if anyone had any concern about CIMB's financials, he would appoint an independent auditor.
 
  "I will appoint an independent auditor, who is not my auditor, to look at the numbers so that I have two credible auditors saying these are the numbers. This is something all companies should do."
 
  On Monday, PAC chairman Datuk Nur Jazlan Mohamed said it would begin its 1MDB probe on May 19.
 
  1MDB chairman Tan Sri Lodin Wok Kamaruddin has said it would extend its cooperation to PAC.

Booming cross-border ventures

By Sharen Kaur

THE warming bilateral relations between Singapore and Malaysia can only bode well for the country, with huge investments pouring in.
 
  Both countries achieved economic milestones with the announcement of the high-speed rail network linking Kuala Lumpur and Singapore and the mass rapid transit link from Johor Baru to Woodlands.
 
  There is also the largest joint-venture project in Malaysia by Temasek Holdings (Private) Ltd and CapitaLand Ltd. Temasek is the sovereign wealth fund of the government of Singapore while CapitaLand is one of Asia's largest real estate companies.
 
  For CapitaLand, its two core markets are Singapore and China, while Indonesia, Vietnam and Malaysia have been identified as new growth markets.
 
  Besides Singapore, Malaysia receives huge investments from China, Vietnam, Hong Kong, Europe and the United States.
 
  Bloomberg has rated Malaysia as the world's fifth most promising emerging market this year, the only Asean country in its top 10 list.
 
  Malaysia is ranked alongside Asia's developed markets, such as Japan, Hong Kong and Singapore, by the Asian Corporate Governance Association.
 
  The co-founder of Transparency International, Michael Hershman, has praised Malaysia as "a friendly country to do business in".
 
  Apart from Temasek and CapitaLand, Singapore tycoon Peter Lim is also investing heavily in the multibillion-ringgit Motorsports City project in Gerbang Nusajaya, Iskandar Malaysia. It will include a Formula One-compliant racing test track as well as showrooms, garages and entertainment outlets spread over 109ha.
 
  There are also investments by Pulau Indah Ventures Sdn Bhd - a 50:50 joint venture between Khazanah Nasional Bhd and Temasek - which is developing the multibillion-ringgit "Urban Wellness" project, a 2ha site in Medini North; and the "Resort Wellness" development, a 85ha site in Medini Central, both located in Iskandar Malaysia, Johor.
 
  Meanwhile, t he investment amount of RM811 million from CapitaLand marks the group's first direct large-scale township investment and development in Malaysia.
 
  Temasek and CapitaLand will develop a S$3.2 billion (RM8.6 billion) township in Danga Bay, one of five flagship zones in Iskandar Malaysia, and about 10km from the Johor Causeway.
 
  The 29ha site will be turned into a waterfront residential community comprising high-rise and landed homes, as well as a marina a shopping mall, restaurants, serviced residences, offices and recreational facilities.
 
  But that is not all from CapitaLand, which has been expanding its presence here through its wholly-owned serviced residence business unit, The Ascott Limited, since a few years ago.
 
  It also counts CapitaMalls Malaysia Trust (CMMT) as among its listed real estate investment trusts.
 
  CMMT, which was listed on the Main Market of Bursa Malaysia on July 16 2010, is Malaysia's only "pureplay" shopping mall REIT with an income-and geographically-diversified portfolio.
 
  It has a market capitalisation of more than RM2.5 billion and its portfolio - comprising Gurney Plaza in Penang, an interest in Sungei Wang Plaza here, The Mines in Selangor and East Coast Mall in Kuantan - has been independently valued at about RM3.2 billion.
 
  The manager of CMMT is Capita-Malls Malaysia REIT Management Sdn Bhd, which is 70 per cent owned by CapitaLand Retail RECM Pte Ltd and the rest by Malaysian Industrial Development Finance Bhd.
 
  Munwar Basha, who is Ascott area manager for Malaysia, said the group was increasing both its investment and presence in the country.
 
  "Demand for quality accommodation in Malaysia has been growing strongly as the country continues to attract foreign direct investment. We will continue to seek opportunities to expand and strengthen our leadership position in Malaysia," he told Property Times.
 
  In 2014, Malaysia's foreign direct investment grew more than eight per cent to RM64.6 billion from 2013.
 
  Munwar said Ascott had expanded its presence in Sabah and Sarawak by securing a management contract for a 253-unit serviced residence - Citadines Waterfront Kota Kinabalu in Sabah.
 
  It would be the first international brand of serviced residence in Sabah when the property opens in early 2018, he said.
 
  Munwar said with the management contract, Ascott reinforced its lead as the largest international serviced residence owner-operator in Malaysia with over 2,000 apartment units across 10 properties in Malaysia.
 
  Ascott currently operates six properties here, namely Ascott Kuala Lumpur, Ascott Sentral Kuala Lumpur, Somerset Ampang Kuala Lumpur, Citadines DPulze Cyberjaya, Somerset Puteri Harbour Nusajaya and Citadines Uplands Kuching.
 
  It will open four more by 2019, including the property in Kota Kinabalu. The rest are Somerset Medini Nusajaya by Pulau Indah Ventures Sdn Bhd, which is a joint venture between Khazanah Nasional Bhd and Temasek; Somerset Damansara Uptown Petaling Jaya by See Hoy Chan Sdn Bhd, and Citadines Medini Nusajaya by United Malayan Land Bhd.
 
  Citadines Waterfront Kota Kinabalu is part of an integrated development that includes a retail mall with supermarket, food and beverage outlets as well as offices.
 
  The project is owned by Titijaya Land Bhd while Ascott is only managing the serviced residence component, which has a gross development value of RM97 million.
 
  "We will invest if we see value in having a serviced residence in a certain location. The investment amount will depend on the opportunity available. Different cities and locations will have different cost structures pertaining to land, properties and even construction cost," Munwar said.

Eco World set for new growth phase

By Sharen Kaur

KUALA LUMPUR: ECO World Development Group Bhd, which has projects worth almost RM62 billion, will enter a new growth phase with a total of RM2.8 billion raised from a corporate exercise.
 
  The Main Market-listed developer has completed the last leg of its corporate exercise following a 20 per cent share placement to institutional investors, which has raised RM638.35 million.
 
  Its earlier subscription of shares and rights issues with warrants were completed in February and March, respectively.
 
  President and chief executive officer Datuk Chang Khim Wah said with the completion of the entire exercise, Eco World was wellplaced to forge ahead with its growth and expansion plans to achieve its RM7 billion sales target for this year and next.
 
  Eco World has accumulated 2,122.57ha of landbank with a total remaining gross development value of RM61.2 billion to be developed.
 
  The group has presence in the Klang Valley, Iskandar Malaysia in Johor and Penang with a total of 15 projects that comprise affordable, upgrader and luxury homes, integrated high-rise developments and green business parks.
 
  Through its associates, the Eco World brand has also extended to the United Kingdom and Australia with several exciting developments in London and Sydney lined up for launches this year.
 
  Eco World is expected to list its special-purpose acquisition company (SPAC), Eco World International Bhd, in the second half of this year.
 
  The SPAC, which will raise funds to acquire the assets in London and Sydney as well as other potential properties, is expected to raise about RM1.5 billion.
 
  Eco World has proposed to subscribe for a 30 per cent stake in the enlarged paid-up capital of the SPAC upon completion of the latter's listing for an indicative consideration of RM562.5 million.
 
  Meanwhile, the 20 per cent share placement will see 394.04 million new shares issued at a subscription price of RM1.62 each. This represents an 8.5 per cent discount to Eco World shares' closing price of RM1.77 on Thursday.
 
  The issue price also represents a discount of 9.86 per cent to Eco World's five-day volume weighted average market price of RM1.79 up to and including Thursday.
 
  In a statement yesterday, Eco World said the share placement was subscribed 1.41 times, with significant orders from long-term institutional investors.
 
  The exercise had attracted strong demand from local and foreign investors, it added.
 
  Eco World chairman Tan Sri Liew Kee Sin said the 1.41 times subscription indicated a strong vote of confidence in EcoWorld by institutional investors, given the current tough market condition.
 
  The stock closed two sen higher at RM1.95 yesterday.

Sarbini returns to KTMB as president, CEO

By Sharen Kaur

KUALA LUMPUR: A former senior staff member of Keretapi Tanah Melayu Bhd (KTMB), Sarbini Tijian, has been appointed as the new head to help the national railway company return to the black.
 
  Sarbini, who was KTMB general manager for intercity service strategic business unit and executive vicepresident (business), has been appointed company president and chief executive officer (CEO) by the Finance Ministry effective May 1. He will start work tomorrow.
 
  Sarbini replaces Datuk Elias Kadir, whose contract ended last Thursday.
 
  KTMB's debt had risen to more than RM2 billion despite attempts to cut cost and increase revenue.
 
  Elias had faced opposition from the Railway Union of Malaya, which has more than 5,000 members.
 
  "There have been many attempts to revive KTMB without the need to privatise. KTMB needs to improve its overall operation to become a profitable entity. A substantial amount is needed to upgrade the tracks, coaches and locomotives, as well as the signalling and communications system to operate more efficiently," said a source.
 
  "Sarbini may have to tackle several issues at the start of his term before anything can be resolved in KTMB. He has the knowledge and experience, as well as support from KTMB."
 
  Since KTMB's corporatisation in 1992, its audited collective revenue as of December 31 2013 was RM7.4 billion.
 
  However, during the same period, KTMB recorded collective losses amounting to RM2.5 billion.
 
  KTMB chairman Datuk Nawawi Ahmad told Business Times recently that the company needed a turnover of RM650 million to RM700 million to break even.
 
  Its operating revenue of RM137.80 million in 2013 was lower than its RM550.70 million operating cost, mainly due to low ridership, tonnage, tariff and charge rate.
 
  Last year, KTMB recorded a revenue of RM370 million while losses were about RM80 million.