Redevelopment opportunities in PJ Section 13

(File pix) An aerial view of section 13 showing the Atwater site.

By Sharen Kaur - Published in NST Property, April 25, 2019 

SECTION 13 in Petaling Jaya, initially an industrial enclave, expanded in the 1960s to become a bustling area with commercial and residential development activities.


If you ask Petaling Jaya folks, this is where they want to live, work and play. Many will remember Section 13 for the famous “Rothmans Roundabout” at the intersection of Jalan Semangat and Jalan Harapan, which has been converted into a traffic-light intersection.

Drive through Section 13 and you will see Sin Chew Media, Dutch Lady Milk, Colgate-Palmolive, Robert Bosch, Konica Minolta, Daikin, Fuji Xerox, Panasonic, Nissan Tan Chong and Vitagen offices, to name a few. In the past, there were Aluminium Company of Malaysia, Malaysian Feedmill plant, Philips, Bayer and the old F&N Dairies factory.

The land on which these firms were sited had been sold to developers, except for the F&N factory which would be redeveloped by Fraser & Neave Holdings Bhd (F&N) and its joint-venture partner, Singapore-based Frasers Centrepoint Ltd.

F&N plans to undertake an integrated development called Fraser Square on the 5.1ha site. According to F&N’s 2014 annual report, Fraser Square would comprise three residential blocks, a retail mall with an adjoining hotel and boutique offices, an office building and a block of small office home office.

The development was supposed to kick-off in 2016 but F&N had said at that time it was reviewing the development.


Large area for redevelopment according to Petaling Jaya City Council (MBPJ), Section 13, which is served by three major roads— Jalan Universiti, Jalan Kemajuan and Jalan Semangat—covers an area of 101.96ha.


Several years ago, MBPJ came up with a Special Area Plan for Section 13 to facilitate the conversion of land use from industrial to mixed-use or limited commercial status.


MBPJ plans to convert 76.57ha (75.1 per cent of Section 13) of the industrial land for commercial use.

The permissible plot ratios are 3.25 to 3.75 for mixed-used developments and 2.75 to 3.00 for limited commercial development parcels, depending on the allowable development and land sizes.


This garnered a lot of interest from developers. They bought land and launched mixed-use
projects comprising serviced apartments, office towers, hotels and a hospital.


“Section 13 is surrounded by mature townships such as SEA Park, Paramount Garden, SS2, SS14, SS19 and SS17. People were looking for new areas to upgrade. They were also looking for a lifestyle
change,” said Paramount Property chief executive officer Beh Chun Chong.


Beh said Section 13 is one of the most centralised locations in Petaling Jaya with easy access to major roads.


Paramount bought 2ha of land fronting Jalan Universiti, where Philips Malaysia used to operate in 2008. Initially, the site was occupied by its KDU University College’s (KDUUC) School of Business and Law. The college moved to Paramount Corp Bhd’s flagship campus in Utropolis in Glenmarie,
Selangor, in January 2015.


“We took over the site in 2015 from KDU UC to develop Atwater, an integrated development with a gross development value (GDV) of almost RM800 million. We have completed earthworks and started construction. Atwater is on schedule to complete in 2022,” Beh told NST Property.


Early buyers One of the early buyers in Section 13 was Jaya33 Sdn Bhd. It bought land housing the
Malaysian Feedmill plant more than a decade ago to build several commercial blocks known as Jaya 33.


Jaya 33 was completed in 2011. In 2013, the asset was sold to Pelaburan Hartanah Bhd (PHB) for RM324 million, or about RM725 per sq ft.


What came up later was Plaza 33,a Grade A office building on 0.9ha land (which previously housed a
paint factory), and Jaya One on the former site of Aluminium Company of Malaysia.


Another firm which sold its land to developers was DKSH Group. It sold Lot 52 (2.4ha) to PJ Development Holdings Bhd for RM124.2 million, or RM480 per sq ft, in June 2013.


OSK Property Holdings Bhd is developing Ryan & Miho, with a GDV of RM595 million, on the land.

Ryan& Miho, which has up to 1,084 apartments, is also equipped with a 0.89ha podium facility.

Quill Group acquired DKSH’s Lot 7 (0.8ha) in Jalan Bersatu for RM360 per sq ft.


Other projects in Section 13 include Pacific Star and Pacific 63—a joint venture between JAKS Sdn Bhd, the contractor, and Island Circle Development (M) Sdn Bhd.


Pacific Star, with a GDV of RM900 million, consists of 14-and17-storey office buildings, three serviced apartment towers (25 to 34 storeys) and 33 retail units. It sits on the site previously occupied by Star Publications (M) Bhd in Jalan 13/6. Star sold the 2.4ha land to the joint venture for RM135 million in 2011.

Pacific 63 is a 21-storey office tower adjacent to Jaya One.

There is also PJ Midtown in Jalan Kemajuan that is being developed by Sime Darby Brunsfield and IOI Properties Group Bhd.


Symphony Life Bhd has a 21-storey office block on a 0.72 ha it acquired for RM33 million in November 2013.

Thriven Global Bhd is developing the RM317 million Lumi Section 13, a 42-storey residential tower with 310 serviced units, on the site of Mudajaya Group Bhd’s former corporate office.

Plan for more TOD projects in Selangor

(File pix) More transit-oriented developments in Selangor will increase the use of public transport. Pix by Adzlan Sidek

By NST Property - April 25, 2019 @ 1:10pm

MORE transit-oriented developments (TODs) will come up on land owned by Railway Assets Corp (RAC) in Selangor, in a move to increase the use of public transport.


The focus for the TOD is to build affordable houses, said Selangor Menteri Besar Amirudin Shari.

It was reported that the TOD developments would start in Bangi and Port Klang.


Initial developments would also come up in Shah Alam, where RAC owns 5.3ha of land sandwiched between Bukit Subang Jaya and Batu 3 rail stations.


RAC, which is tasked to manage, administer and maintain assets related to the railway infrastructure and ancillary facilities in Malaysia, owns about 1,461ha of railway land in Selangor.


Nationwide, it owns 15,378 ha of land along the KTM railways and in prime areas. Some 80 per
cent of the land has been used to build 1,650km tracks from Padang Besar to Johor Baru and Tumpat to Gemas, 170 stations, 16 depots and warehouses.


Menteri Besar Selangor Inc (MBI Selangor) and RAC are drafting a development plan to transform RAC’s land in Selangor, aimed at promoting sustainable and liveable communities.
 

Amirudin said the development would make a provision for desirable and affordable housing and good connectivity, simultaneously looking into revitalising economic development around railway stations.


He said this after the inking of a memorandum of understanding between MBI Selangor and RAC
early this month. The signing was witnessed by Transport Minister Anthony Loke.


The partnership is in support of the federal government’s aim in realising Selangor’s vision to be Smart State by 2025. The government targets to achieve this by connecting integrated public transportation with affordable homes.


“We are constantly challenging ourselves to resolve the rakyat’s issues. This effort will also work towards revitalising economic development around railway stations and its surrounding community,” said Amirudin.


Although the affordable houses are located in transportation hubs, MBI Selangor and RAC will ensure that their prices are in accordance with the state government’s policy for an affordable house to cost RM250,000 and the federal government’s policy, below RM300,000.


RAC has the experience to undertake TOD developments, having completed one with SP Setia Bhd for the Abdullah Hukum light rail transit station in KL Eco City. The corporation has also started a TOD venture with MKH Bhd for Kajang 2, a new township located in the vicinity of Kajang.


Meanwhile, Loke said the existence of affordable homes in transportation hubs will impact the trend of public transport utilisation.


He said the existing rail services on the RAC land which would make way for TODs would drive population and economic growth in the areas.


“Railways are the most effective (mode of transportation) and frequently used by people living in cities. More affordable homes available nearby railway stations will increase the ridership. In addition to the rail sector, public transport services, such as taxis, e-hailing and buses, would
also have an impact on the increase in the number of users, when these railway stations are used as stops for them to take and drop passengers.”

Ascott seals deal to manage 14 properties

(File pix) A property under the Citadines brand.

Sharen Kaur - Published in NST Property, April 25, 2019 

CapitaLand Ltd’s lodging business unit, The Ascott Ltd, has won a contract to manage 14 properties with over 2,000 units in eight countries, including Malaysia.

Three of the 14 new properties are under its co-living“lyf” brand located in Kuala Lumpur, Fukuoka in Japan and Shanghai in China.

The property here is called lyf Raja Chulan Kuala Lumpur and is slated to open in 2020.

Ascott is also targeting to open the 131-unit lyf property, nestled within Fukuoka’s major retail and recreational centre in Japan in 2020.

The160-unit lyf Hongqiao Shanghai in the Central Business District of Hongqiao is expected to open in 2022.

Ascott chief executive officer Kevin Goh said the lyf properties in Kuala Lumpur, Fukuoka and Shanghai are likely to enjoy a ready catchment of corporate and leisure travelers, given its prime locations in the cities’ major commercial and recreational hubs and proximity to tech unicorn companies.

With these three new additions, Ascott has eight lyf properties with over 1,600 units under development in Singapore, China, Japan, Malaysia, Thailand and the Philippines.

Ascott is also gearing up for the opening of its first lyf property, lyf Funan Singapore, in the heart of the city-state’s Civic & Cultural District, in the fourth quarter this year.

Goh said demand for the lyf-branded co-living properties is gaining ground.

“We are bringing lyf to Kuala Lumpur, Fukuoka and Shanghai as the buzzing start-up ecosystems in these cities have given rise to a popular culture of living and co-creating as a community among the millennial,” he said.

Goh said the lyf properties, with their flexible communal spaces and social programmes, will cater to the lifestyle aspirations of creative professionals, technopreneurs, trendsetters and millennial

travelers who seek collaborative and networking opportunities in the community.

According to Goh, millennial already account for a quarter of Ascott’s customer base.

He said with the lyf brand, Ascott can seize opportunities presented by the booming millennial generation, who are set to become the largest spending travel demographic in the near future.

Besides Malaysia, Singapore, China, Japan, Thailand and the Philippines, Ascott is also looking to bring the brand to other potential markets, including Australia, France, Germany, Indonesia, and the United Kingdom.

“We have continued to build on our strong growth momentum in the first quarter this year and accelerated Ascott’s growth across Asia Pacific, Europe and the Middle East,” said Goh.

He said besides management contracts, Ascott’s strategic alliances with market leaders, such as NTT

Urban Development Corporation in Japan, Huazhu Hotels Group in China and Ananda Development in Thailand, continue to provide the company with a strong pipeline of properties.

In addition to the 14 new properties, Ascott secured its first property in Australia under the

recently-launched Citadines Connect brand of select-service business hotels.

“With our serviced residences and apartments for corporate leasing targeting the long stay segment, to the middle-class business hotels under TAUZIA’s brands and Citadines Connect select service

business hotels for shorter stays, we will fast-track Ascott’s expansion to achieve our global target of 160,000 units by 2023,” Goh said.

Spurring Selangor's economic Growth

An old aerial image

Watch the video by 7-year-old new youtuber Neshall S. that was taken in i-City.
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By Sharen Kaur -  Published in NST Property on April 18, 2019

About 15 years ago when Tan Sri Lim Kim Hong was planning the development of i-City on 29.13ha of land in Seksyen 7, Shah Alam, the billionaire entrepreneur had envisioned what it would turn out to be a decade later. Today, the development and its progress has surprised many industry players. The idea for i-City was conceived in the 1990s in line with Malaysia’s then aspiration of becoming a high-income nation by 2020. The 1997/1998 Asian financial crisis put a halt to the plan and it was not until 2005 that i-City became a reality for Lim.

Back then, i-City was a project that would generate RM1.5 billion in gross development value (GDV). Today, with an approved gross floor area (GFA) of 13 million sq ft, the GDV may even exceed the estimated RM10 billion target set by its developer, I-Berhad.

The i-City unfolding today is founded on the determination of its developer to offer a fully-integrated lifestyle township with the infusion of cutting-edge technologies, characterised by a number of strategic alliances with some of the world’s A-listers.

i-City as you see it today.

This strategy is a part of i-City’s vision to be an international park, a status conferred on it by the Selangor government as part of the administrative’s drive for Shah Alam to be an international city. So, it was not surprising when the state government said in February that i-City was fast shaping to be the heart of Selangor’s golden triangle.

Menteri Besar Amirudin Shari said in February rapid developments at i-City could potentially turn it into a “golden triangle” in Selangor. He said the development presented excellent economic space for those living in Selangor as well as the rest of the country.

Nawawi Tie Leung Property Consultants Sdn Bhd executive director (investment/research and consulting) Brian Koh believes more foreign investors would set up shop in i-City, given the golden triangle “status”.

GOLDEN TRIANGLE

What makes i-City the heart of Selangor’s golden triangle? Lim said there are three key points —prosperity, influence and economic success.

“i-City is now a sought-after residential address. The demand for i-City as a residential address is reflected in the speed at which the price for i-Residence, launched in 2012, has more than doubled from about RM450 per square foot (psf). In 2017, we launched Hill10 at RM1000 psf. More importantly, the units launched were fully taken up. We have sold over 4,000 residential units since the first launch in 2012,” he told NST Property.

In terms of the influence i-City has on the market, Lim said the project has helped cement Shah Alam’s place on the world tourism map with its theme park listed by CNN Travel as one of the world’s top 25 most colourful and brightest places.Since its opening to the public in 2009, the theme park has attracted more than five million visitors a year to Shah Alam. Its City of Digital Lights with one million LED lightscapes, the Red Carpet 2 interactive wax museum and the SnoWalk falling snow and ice carving experiences have continued to woo visitors, he said.

Economically, i-City has spurred Shah Alam’s economic growth by bringing in foreign investors and international brands, as well as creating ample job opportunities.

“The 220-room Best Western i-City hotel is currently in its sixth year of operations. Under construction is the 300-room Double Tree by Hilton i-City, on the launch pad is the Fraser Place serviced apartments while on the drawing board isa400-room five-star international hotel.

“i-City opened its International Convention Centre in November 2018, providing a platform to host MICE (meeting, incentives,conferences and exhibitions) events.

It is able to accommodate up to 1,000 guests (banquet style seating) and 2,000 guests (theatre-style seating) given its total gross area of 20,000 sq ft.

“Last month we opened the 940,000 sq ft Central i-City Mall, which was developed as a joint venture between the Central Pattana Group of Thailand and i-City.

It is envisaged that the mall would transform Shah Alam into a regional shopping centre and a destination of choice for cruise ships stopping over in Port Klang.”

BRANDING MAP FOR I-CITY

Ho Chin Soon Research Sdn Bhd chairman Ho Chin Soon said based on his company’s research, several corridors of growth in Selangor have been identified and growth is stronger along the Federal Highway, especially where i-City is located. His firm has crafted a “Branding Map” which positions i-City as the heart of Selangor’s golden triangle. He said the Branding Map would highlight the key features and components that would make i-City’s “Golden Triangle of Selangor” claim justifiable and reasonable.

“The map is drawn to scale and one should be able to see the LRT 3 stations located to the north of i-City. Also the West Coast Expressway, currently under construction, will be identified and highlighted. This expressway will open up accessibility to a higher level.

“Landbanks for further development lying south of the Federal Highway and easily connected by a bridge to the main i-City will also be shown. And, definitely, the newly opened flyover from the Federal Highway will be marked,” he said.

Ho said intuitively, the Central i-City Mall is a major and key component to the “Golden Triangle of Selangor” claim that would spur further developments and raise values.

Some 10 to 15 years ago, some work and site clearings would have started at i-City but these were nothing compared to what you see today. Personally, I am amazed by Lim’s energy and dedication to bring all these elements together. He has done a fantastic job indeed, especially in building the mall. People in Klang, Shah Alam and western parts of Petaling Jaya will be patronising the mall,” he added.

I-Berhad busy for next 10-12 years

From left :Central i-City Mall is the biggest shopping centre in Shah Alam; The Jewel, standing at 73 levels, will dominate the Selangor skyline in 2025.

Watch the video by 7-year-old new youtuber Neshall S. that was taken in i-City.
Please do subscribe to his channel in support of his efforts in promoting tourism places of interest, food, hobbies that include fishing etc....

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By Sharen Kaur - Published in NST Property, April 18, 2019

ONLY 40 per cent of the 13 million square foot of approved gross floor area (GFA) of i-City had been completed as at end-2018, says Tan Sri Lim Kim Hong, executive chairman of I-Berhad. 

This means I-Berhad will be busy in the next 10 to 12 years finishing the development and, along the way, could add new products in line with demand and market trends.

“It has been said that great cities have to continuously recalibrate, renew and reinvent them selves in response to ever-changing demographic, technological, economic and global achievements. Without a centre or centres of intellectual capital that a re-actively engaged in understanding and helping to navigate the multiple factors shaping the future, big cities cannot become great cities,” said Lim.

“Against this backdrop, i-City would continue to push the boundaries with its development of work places of the future.

A relatively-recent concept to Malaysia, modular office buildings will be championed and showcased in i-City, one which we believe will be the way for commercial development in the near future.”

He said recognising the constant evolution of living patterns of the millennial generation, co living spaces would also be introduced in the coming phases at i-City.

“As cities become more expensive, co-living addresses some of the issues around urban living.”

INTERNATIONAL CITY

Lim said from i-City’s perspective, being “international” not only means catering to the international community, but also being an investment location of choice for global companies.

When the i-City project started, a partnership was formed with Serv Corp of Australia to provide managed services to the development. This venture resulted in i-City being the first smart city in the country with Cisco Smart + Connected Community platform.

In addition, i-City was the first property development project in the country to provide fibre-to home connectivity and high speed broadband back in 2008 when dial-up were still the standard bearers.

i-City is also the country’s first property development project that features the City of Digital Lights theme park.

With a million LED lightscape and various rides and attractions, it is now a much sought-after spot for night tourism in the country.

The i-City Cybercentre Office Suites was the first syariah-compliant MSC Cybercentre inthe country, following a strategic alliance with the Al Rahji Banking Group from Saudi Arabia in 2010.

Last month saw the opening of the RM850 million Central i-City Mall, making it the largest shopping destination in Shah Alam with local and international luxury brands. Anchor tenants include Sogo Department Store, TGV Cinemas and Village Grocer.

Come 2020, the Double Tree by Hilton will open its doors with its 300 elegant rooms equipped with state-of-the-art technology.

Lim said the opening of the Double Tree by Hilton and Best Western i-City hotel (in 2015) are a catalyst in getting international hotel chains and other multinational companies to look at Shah Alam in a new light.

In 2020, i-City will also reap the benefits of an eco-friendly, car-less mode of travel once thethird line of the light rail transit system (LRT 3) is completed with a station/stop right at CentralWalk. CentralWalk is one of the key features of i-City.It has multiple blocks comprising shopping, hospitality, leisure, convention and medical hubs.This U-shaped complex stretches from the Red Carpet 2 to Central i-City Mall, before U-turning to join the 73-storey The Jewel — set to be thetallest structure in Shah Alam and possibly in Selangor, too!

The Jewel,which will dominate the Shah Alam skyline by 2025 and cement i-City’s place in Selangor’s development history, comprises off a five-star hotel and premium retail space.

MEH explores possibilities for third project

EmpireCity Damansara will be fully completed in 2020.

By NST Property - April 18, 2019

MAMMOTH Empire Holding Sdn Bhd (MEH) has several ideas for its third project in Damansara Perdana in Petaling Jaya — one which includes developing the land in a joint venture with a reputable developer.

Group executive director Datuk Danny Cheah said another possibility is an outright sale of the land. MEH owns 18.2ha of land to develop Empire City Damansara 2 (ECD2). “We are still exploring all possibilities. We are not in a rush to start ECD2. If we are going to develop the project ourselves, we want to do it carefully and may only start its construction in 2020. ECD2 depends very much on the market environment and whether it is conducive. Our focus right now is to complete Empire Damansara City 1(ECD1),” he told NST Property.

Cheah said ECD2 would take about 10 years, and planning approval from Petaling Jaya City Council has been granted for the development. The plan is to build residential towers, offices, hotels, retail and a theme park. Initially,ECD2 was meant to be developed over 26.3ha but late last year MEH disposed of some 8ha to Asset Kayamas Group for RM236 million, or RM270.90 per sq ft. Cheah said had ECD2 remained a 26.3ha project, its gross development value (GDV) would have been between RM6 billion and RM7 billion.

Now with 45 acres (18.2ha),we will have to re evaluate the GDV potential for ECD2. We are working out the details. It will be up to the new owner if they want to make alteration or come up with new plans for the land that they have purchased. We understand Asset Kayamas is making some changes,” 

As to whether it is viable to build a theme park and if it would attract the public, with few such developments already in the market, Cheah was optimistic. 

“MEH will go ahead to build a theme park but we will be extra cautious when planning the development. The idea for the theme park came about after we visited the indoor Ski Dome inside Dubai Mall of the Emirates. We went to Dubai with our consultants to study the development and design.

“The plan is still there... but we will see if there is a need to revise the plan in the future.It is a good plan but depending on circumstances, we may have to review it.

“The theme-park business has many challenges. Look at the challenges some Malaysian theme-park operators are facing. In the last few months there have been so many issues... so we need to be extra cautious in terms of what we are planning for our theme park,” he said.

On whether there would an initial public offering to raise funds for ECD2, Cheah said MEH would look at various possibilities for financing, including launching a real estate investment trust (REIT) if the need arises.

“REIT is an option but it is dependable on yield.The development has to reach a certain stage

before we can explore REITs. MEH has a good track record in terms of projects and it has the capability to go for a listing, but we have no immediate plan to launch an IPO. If we wanted to launch an IPO we would have done it at the start of ECD1. There are pros and cons when we are a listed entity.We need to make quick decisions but an IPO is not suitable at the moment,” he said.

MEH’s flag ship project in Damansara Perdana was Empire Damansara, which was completed in 2013. The RM500 million project comprises offices, residential units, retail and hotels.

“We built the project in one go. Other developers would have done it differently,like develop it in several phases. The whole idea of doing it at one go is that when you sell the buildings to investors, you present the overall picture on how it is going to be when it is fully completed. For ECD1, we have our own pace to do it and for ECD2, we haven’t decided how we want to do it,” said Cheah.

He said MEH had obtained RM200 million financing from AmBank for ECD1 and it had been fully paid (fully redeemed).

The second tranch of loan from AmBank was RM300 million for construction work and to build a mall in ECD1.

“Of the RM300 million, we had paid off RM140 million in the last five years. The balance RM160 million is not even 10 per cent of the value of the mall, (which is) about RM1.75 billion. So, we are in a good financial position,” added Cheah.

Mah Sing maintains top 3 priorities

A Kuala Lumpur city view from land purchased by Mah Sing Group Bhd in Mukim Petaling . MAH SING Pix

By Sharen Kaur - Published on April 18, 2019

The top-three influencing factors when it comes to house purchase is price, location as well as security and safety, and these are the top priorities for Mah Sing Group Bhd when it develops its new parcel of land in Mukim Petaling. 

The company announced recently that its wholly-owned unit, Mah Sing Properties Sdn Bhd, is buying 1.87ha of freehold land in Mukim Petaling for RM90.3 million (inclusive of development charge). The land acquisition will increase MahSing’s prime landbank to 853.5ha, with total remaining gross development value and unbilled sales of RM26.2 billion. Mah Sing is planning a residential project with an estimated gross development value of RM500 million

The project is targeted to start in the second half of this year and would take up to five years to complete, said Mah Sing group managing director Tan Sri Leong Hoy Kum in a statement. “Various recent surveys have shown that 92 per cent of Malaysians prefer to buy than rent, with the top-three influencing factors being price, location, and security and safety. We will continue our strategy of providing homes with luxury features at affordable rates as we believe demand will persist for the right product in the right location and at the right pricing,”he said.

Leong said the project is targeted at first-time buyers and some up graders as well as the city’s professional population who are looking to

stay near to the central business district with ready amenities and infrastructure. He said the acquisition fits Mah Sing’s strategy of land banking for niche projects in good locations that are ready for immediate development.

“This will be a quick-turnaround niche development as the land comes with development order, but in view of the prime location, Mah Sing intends to revisit the development plans in order to fit current market demands.” Mah Sing group strategy and operations director Lionel Leong said the residential project would have three to four-bedroom units. “From the actual transactions listed at JPPH (Valuation and Property Services Department), we see high demand for bigger units. These larger units would be ideal for buyers who are currently staying in older homes and want better security and facilities to cater to their young families and children,”he said.

Currently, the most affordable two-bedroom units would have an indicative built-up from 700 sq ft and indicative starting price from RM428,000.

Ascott to manage 14 properties in 8 countries

CapitaLand’s wholly owned lodging business unit, The Ascott Limited (Ascott), has clinched contracts to manage 14 properties with over 2,000 units across eight countries – China, Germany, India, Indonesia, Japan, Malaysia, Thailand and Saudi Arabia.

Citadines Al Aziziyah Al Khobar

Three of the 14 new properties are under its coliving ‘lyf’ brand, strategically located in the vibrant cities of Fukuoka in Japan, Kuala Lumpur in Malaysia and Shanghai in China.

Under a partnership with Japanese real estate company, NTT Urban Development Corporation – a subsidiary of Nippon Telegraph and Telephone Corporation, Ascott will manage lyf Fukuoka1 as well as jointly explore serviced residence opportunities in Japan. The 131-unit lyf property, nestled within Fukuoka’s major retail and recreational centre, is targeted to open in 2020.

Meanwhile, the 160-unit lyf Hongqiao Shanghai, strategically located in the Central Business District of Hongqiao, is set to open in 2022. lyf Raja Chulan Kuala Lumpur, which resides within Kuala Lumpur’s Golden Triangle, the Malaysian capital city’s commercial, shopping and entertainment hub, is scheduled to open in 2020.

Ascott’s latest lyf properties in Fukuoka, Kuala Lumpur and Shanghai are set to enjoy a ready catchment of corporate and leisure travellers given their prime locations in the cities’ major commercial and recreational hubs and proximity to tech unicorn companies. With these three
new additions, Ascott has eight lyf properties with over 1,600 units under development in Singapore, China, Japan, Malaysia, Thailand and the Philippines. Ascott is also ramping up for the opening of its first lyf property, lyf Funan Singapore, in the heart of the city-state’s Civic &
Cultural District, in the fourth quarter this year.

Kevin Goh, Ascott’s Chief Executive Officer, said: “Demand for our lyf-branded coliving properties is gaining ground. We are bringing lyf to Fukuoka, Kuala Lumpur and Shanghai as the buzzing start-up ecosystems in these cities have given rise to a popular culture of living and
cocreating as a community among the millennials. Ascott’s lyf properties, with their flexible communal spaces and social programmes, will cater to the lifestyle aspirations of creative professionals, technopreneurs, trendsetters and millennial travellers who seek collaborative and
networking opportunities in the community.”

Citadines Paras Square Gurugram

“Millennials already account for a quarter of Ascott’s customer base; and with our lyf brand, we can seize opportunities presented by the booming millennial generation, set to become the largest spending travel demographic in the near future. Besides Singapore, China, Japan, Malaysia, Thailand and the Philippines where we will be opening lyf properties, we are also looking to bring lyf to other potential markets including Australia, France, Germany, Indonesia, and the United Kingdom.”

The 14 new properties marked Ascott’s first foray into Changchun, the second largest city in Northeast China, and deepened its presence in Foshan, Hong Kong, Shanghai and Shenzhen, China; Frankfurt, Germany; Fukuoka, Japan; Gurgaon, India; Jakarta and Semarang, Indonesia; Kuala Lumpur, Malaysia; Pattaya, Thailand; and Al Khobar in Saudi Arabia.
Among the 14 new properties is the 100-unit Ascott Riverpark Tower Frankfurt, to be designed by the world-famous architect Ole Scheeren. This is the first time Ascott is bringing its premier Ascott The Residence brand to Germany. Taking on a Jenga-like structure, the serviced residence will offer panoramic city and river views when it opens in 2022.

Meanwhile, the 118-unit Citadines Hong Quan Road Shanghai is secured under Ascott’s strategic alliance with Nasdaq-listed Huazhu Hotels Group (Huazhu), one of China’s leading hotel operators, and Huazhu’s subsidiary CJIA Apartments Group. Citadines Hongqiao Mixc Shanghai is the fifth property under the alliance and is slated to open in 2019.

Under a strategic alliance with Ananda Development, one of Thailand’s top listed developers, Ascott will be managing the 324-unit Somerset Blue Coast Pattaya. lyf Sukhumvit 8 Bangkok, set to open in 2020, is also one of the properties signed under this partnership.

Mr Goh said: “We have continued to build on our strong growth momentum in the first quarter this year and accelerated Ascott’s growth across Asia Pacific, Europe and the Middle East.

Besides management contracts, Ascott’s strategic alliances with market leaders such as NTT Urban Development Corporation in Japan, Huazhu Hotels Group in China and Ananda Development in Thailand continue to provide us with a strong pipeline of properties. In addition to the 14 new properties, we secured our first property in Australia under our recently launched Citadines Connect brand of select-service business hotels, extending our product offerings to owners and customers. With our serviced residences and apartments for corporate leasing targeting the long stay segment, to the middle-class business hotels under TAUZIA’s brands and Citadines Connect select-service business hotels for shorter stays, we  will fast-track Ascott’s expansion to achieve our global target of 160,000 units by 2023.”

CapitaLand Limited (CapitaLand) is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, it is an owner and manager of a global portfolio worth over S$100 billion as at 31 December 2018, comprising integrated developments, shopping malls, lodging, offices, homes, real estate investment trusts (REITs) and funds.

The Ascott Limited is a Singapore company that has grown to be one of the  leading international lodging owner-operators. It has more than 58,000 operating units in key cities of the Americas, Asia Pacific, Europe, the Middle East and Africa, as well as over 43,000 units which are under development, making a total of more than 101,000 units in over 670 properties.

Tropicana responds to video on The Residence

PRESS RELEASE

VIDEOS ON THE RESIDENCES

Petaling Jaya (15 April 2019) – Property developer, Tropicana Corporation Berhad (“Tropicana” or “the Group”) today clarified the video circulated on the social media and digital platforms captured the destructive actions of the representative of one of its owners of The Residences, Kuala Lumpur.

The actual owner (whom is not the person in the videos circulated) took vacant possession officially of her unit at The Residences on 23 March 2019. She was satisfied except with the potential marble flooring defect. Based on Tropicana Customer Care Survey, on average, 89% of the feedback received from The Residences purchasers expressed that they are satisfied with their units and would recommend a Tropicana property to family and friends.

The owner subsequently lodged a defect report to Tropicana solely on marble flooring on 1 April 2019. Tropicana was ready to rectify these defects based on its Standard Operating Procedure, and in accordance with the terms of agreement with the owner. The representative of the owner (person in the video, i.e. the “Representative”) demanded for specific members of Tropicana staff, main contractor and consultants to be present for a meeting on 10 April 2019 in the owner’s unit.

On 10 April, Tropicana staff, main contractor and consultants were present at the unit with the intention to resolve the potential defects highlighted as per the Representative’s request. However, before the consultants were able to explain the typical natural characteristics of marble flooring, the Representative deviated from the defects reported by the owner and started becoming aggressive. The Representative berated everyone and out of fear for their safety, the consultants decided to leave the unit. The internal staff of Tropicana also intended to leave however the Representative threatened to cause more damages. Even though Tropicana staff were traumatised, they remained within the unit out of safety concerns for its residents.

The incident in the videos subsequently took place, which the Representative raised other dissatisfaction apart from the potential marble flooring defect. It was evident from the sledgehammer that the Representative brought prior to the scheduled meeting, this was a premeditated action and he had no intention to resolve the matter in hand.

Immediately following the incident after the recording had ended, the Representative made specific verbal demands to Tropicana staff which include monetary compensation. The Representative emphasised and threatened that he would make it his life mission to damage Tropicana’s reputation if the Group does not accede to his demands.

Today, Tropicana is in this situation as the Group refused to negotiate with such individual, who clearly has malicious intent towards the Group. This is clearly a premeditated attempt to extort financial gains from the Group.

Tropicana is proud of The Residences as a whole, with its prime location at the heart of Kuala Lumpur City Centre and sitting atop an international 5-star hotel, W Kuala Lumpur which has received commendable reviews.

The Group stands firm by its consultants and staff who have shown professionalism in handling this matter. The Group hopes that these unreasonable actions do not repeat as it completely undermines the whole building industry as well as the laws and regulations that govern housing development in Malaysia.

This untoward incident has deeply affected the Tropicana team and the Group apologises to anyone that is affected by it. Tropicana remains committed towards continuously delivering quality homes that not only fulfil the lifestyle aspirations but also enhance the quality of life of its customers. As customer satisfaction is Tropicana’s top priority, the Group takes this as a learning opportunity to continuously improve its services.

Investors remain wary of retail, office segments

(File pix) Commercial properties in Malaysia provide good yields relative to other markets in Asia Pacific, but higher relative borrowing costs, generally exceeding five per cent, has lowered the cash-on-cash yield. Pix by NSTP/Osman Adnan

 

Published in NST Property on April 11, 2019

 

MARKET activities, especially in retail and office sub-sectors, slowed down last year.
Knight Frank Malaysia executive director of capital markets James Buckley said investors were increasingly more cautious given the extent of the forthcoming new supply, decreasing occupancy and declining rentals.
“In 2019, we have observed a rise in the number of owners wanting to sell their commercial property assets, but the bid-ask spread will need to narrow before we see more transactions successfully completed,” he said.
Buckley said commercial properties in Malaysia provide good yields relative to other markets in Asia Pacific, but higher relative borrowing costs, generally exceeding five per cent, has lowered the cash-on-cash yield.
“This reduced the attractiveness of Malaysia’s property market in the eyes of international investors who compare the returns they can achieve elsewhere in the region. Owners need to become more realistic about their price expectations given the market situation.”
He said investing in the healthcare and institutional assets, such as education, is still a fairly new trend in Malaysia. However, more deals may come to fruition from this sub-sector, with investors being attracted by its defensive qualities as it is less reliant on the general state of the economy, offers long leases and often comes with fixed increases in rent throughout the duration of the lease.
“The logistics and industrial sub-sectors have in the past been the poor relation to offices and retail malls, but investors are increasingly seeing the benefits.
“It offers higher yields, often with great covenants, and the construction is simple and fast. The rising demand for good-quality warehousing and distribution hubs and an undersupply bodes well for future rental growth,” said Buckley.
Moving forward, the performance of the retail sub-sector is expected to be lacklustre with respondents expecting a more challenging market ahead with a high supply pipeline of retail space.
The overall performance for the hotel/leisure sub-sector is expected to be generally flat this year. Aided by the strengths of Sabah’s tourism sector, the overall occupancy rate of hotels in the state is expected to improve.
The logistics/industrial sub-sector is expected to outperform as more businesses and manufacturers embrace the Industry Revolution 4.0 (Industry 4.0). Among the favourable factors affecting commercial real estate investment sentiment are strong influx of foreign direct investments in the manufacturing sector and the rapid adoption of Industry 4.0.
According to Knight Frank’s Malaysia Commercial Real Estate Investment Sentiment Survey 2019, respondents generally regard the smooth power transition to the Pakatan Harapan coalition and improved corporate and public governance to be positive for the commercial real estate market.
In contrast, a number of respondents said limited access to funds resulting from stringent lending guidelines, coupled with a slowdown in the economy, would dampen prospects for commercial real estate in the country.
Also, while respondents were generally satisfied with the provisions of 2018 Budget, a relatively high number of them were dissatisfied with the 2019 Budget, citing a lack of catalytic measures to spur the weak commercial real estate market.
Respondents are expected to take a conservative approach on investment this year given challenges in the market such as weak return and yield and limited investment opportunities.

OUTLOOK

The majority of respondents (50 per cent and above) expect capital values for all sub-sectors to remain stagnant this year.
Close to 40 per cent of them expect an increase in the logistics/industrial andhealthcare/institutional sub-sectors while another 28 per cent expect capital values of office and retail properties to fall.

RENTAL AND ROOM RATES

Some 57 per cent of the respondents expect office rents to fall. As for the retail sub-sector, there appears to be a more balanced outlook with 48 per cent expecting rents to remain stable while the remaining 44 per cent anticipate rents to dip.
Half of the respondents expect rents to remain flat in the logistics/industrial segment.
In the hotel/leisure segment, a higher number of respondents expect the average room rate this year to remain stable.

OCCUPANCY

Similar to the capital value, 42 and 49 per cent of respondents expect overall occupancy in the office and retail sub-sectors, respectively, to further weaken due to the high impending supply pipeline and slow take-up.
As for the hotel/leisure and logistics/industrial sub-sectors, half of the respondents expect occupancy will continue to hold.

YIELD PERFORMANCE

More than a third of respondents expect yield compression in the office and retail subsectors although about 26 and 33 per cent of them are optimistic about the performance in the logistics/industrial and healthcare/institutional sub-sectors respectively.
The majority of respondents (over 50 per cent), however, expect the sub-sectors to maintain the performance at the previous year’s level.
The respondents opined that the healthcare/institutional sub-sector had performed relatively well last year. The favourable performance is expected to continue this year, supported by growing demand and fundamentals. The survey results reveal that 33 per cent of respondents anticipate an increase in the yield of healthcare/institutional assets this year.
Knight Frank Malaysia executive director of valuation and advisory, Keith Ooi, said unlike conventional assets, healthcare and institutional real estate are alternative specialised asset class that is less reliant on the economy.
From investors’ point of view, this specialised asset class is attractive as it provides certainty by offering long-term leases with step-up rentals, he said.
“Some respondents lamented the increased challenges in raising funds for commercial real estate, particularly the conventional assets.
These assets will be somewhat insulated from this challenge as respondents among the lenders and fund/REIT managers indicated that they may increase their exposure toward the sub-sector in 2019.
“The healthcare and institutional subsectors are truly a hidden gem, as investors become more familiar with this asset class... I foresee there will be more transactions of real estate in this sub-sector in 2019,” said Ooi.

Movers and dampers

Logistics, industrial, healthcare and institutional segments will do better this year compared with office, retail and hotels sub-sectors, according to a survey by Knight Frank Malaysia. Pix by NSTP/Osman Adnan

 

By Kathy B. - Published in NST Property on April 11, 2019 

 

COMMERCIAL real estate developers have been churning out properties at a healthy rate over the years but this year, they will be building fewer office, retail and hotels as the market remains challenging, a survey shows.
Developers specialising in logistics, industrial and healthcare as well as institutional segments will have the upper hand, supported by demand.
The logistics/industrial and healthcare/institutional sub-sectors have continued to outperform this year despite growing global and domestic headwinds, fuelled by strong foreign direct investments (FDIs) in the manufacturing sector, continued strong growth in retail e-commerce and inelastic demand for healthcare services, said global property consultant Knight Frank Malaysia.
The firm expects the logistics/industrial subsector to remain the industry’s sweet spot in Klang Valley and Johor while the hotel/leisure segment will continue to garner more interest in Penang and Sabah.
The Malaysia Commercial Real Estate Investment Sentiment Survey 2019, launched by Knight Frank recently, indicates that lenders are targeting fewer investment activities in the office and retail sub-sectors this year and showing more interest in the hotel/leisure, logistics/industrial and healthcare/institutional sub-sectors.
Survey respondents comprised representatives in the senior management levels across the property industry. Developers made up half of the respondents (54 per cent), followed by commercial lenders (30 per cent) and fund/real estate investment trust (REIT) managers (16 per cent).

2018 ULTIMATE HIGHLIGHT

Knight Frank Malaysia managing director Sarkunan Subramaniam said the victory of the Pakatan Harapan coalition in the 14th General Election was the ultimate highlight for the country last year.
However, in light of the current slowdown in both global and domestic economies, some respondents opined that the new government should up the ante by introducing and implementing policies to spur economic activities, he said.
Sarkunan said the possibility of a no-deal Brexit, coupled with the ongoing United States-China trade and tech war, continues to create uncertainties and dampen investor confidence. This will inevitably lead to slower investment activities globally, including in commercial real estate.
He said many respondents pointed out that the government should seek to stimulate growth in key industries that would generate strong multiplier effects on the economy.
“The commercial real estate sector had remained lacklustre in 2018. This prompted our respondents to indicate the need to curb irrational new supply and relax property lending guidelines. These measures are seen as vital for Malaysia’s property sector to achieve market equilibrium.
“This year’s survey findings show that respondents are generally optimistic about the logistics/industrial and healthcare/institutional sub-sectors and expect them to outperform the overall commercial real estate market in 2019. It is also worth noting that respondents from Sabah are bullish about the hotel sub-sector, in line with the region’s booming tourism industry,” he said.

ACTIVE BUT CAUTIOUS

Sarkunan said while the commercial real estate market remains challenging, it does present a good opportunity for well-capitalised key players to acquire suitable assets at reasonable prices.
“While pockets of opportunities may still be present in selected office sub-markets, the overall outlook is gloomy this year with the majority of respondents expecting occupancy and rental rates to fall. There is no immediate catalyst to address the growing mismatch in supply and demand.”
He said the year of Earth Boar is expected to bode well with earth, fire and wood industries.
“Henceforth, we certainly hope that the property market, which is an earth industry, will start to show signs of recovery moving into 2020. Hope is the beacon which points to prosperity.”
Sarkunan said fund or REIT managers would remain active but selective this year, gravitating towards the logistics, industrial and healthcare, and institutional sub-sectors where there are lesser concerns of oversupply, supported by demand and fundamentals.
According to the respondents, their investments in the office and retail sub-sectors had generally recorded dismal performance this year, mainly attributed to stagnant or falling occupancy rates, coupled with limited rental growth, amid challenges in both these sub-sectors.
“In the hotel/leisure sub-sector, performance was mediocre. Despite missing its tourist arrivals target, Malaysia still welcomed 25.83 million tourists last year. This had supported both overall occupancy and room rates,” said Sarkunan.
Knight Frank Sabah executive director Alexel Chen said with the healthy growth in visitor arrivals and hospitality sector as a whole, it is no surprise that both local and foreign investors as well as international hotel operators are keen to enter and explore more opportunities in the state.

MOST ATTRACTIVE SUB-SECTORS

In the Klang Valley, the logistics/industrial sub-sector is favoured, likely attributed to the strong inflow of FDI in the manufacturing sector. More than a third of respondents anticipate capital growth in this market segment.
Despite challenges in the Klang Valley retail market, selected developers particularly continue to favour this sub-sector. Besides undertaking retail developments, key players are hopeful that their retail assets can become more competitive upon completion of Asset Enhancement Initiatives.
Penang continues to be favoured for its hotel/leisure and healthcare/institutional sub-sectors, supported by its Unesco World Heritage Site of George Town and many attractions as well as its position as a leading medical tourism destination in the country.
Johor remains attractive for the logistics/industrial sub-sector as the state maintains its position as the leading investment destination in the country for the manufacturing sector.
Sabah continues to experience tourism boom with tourist arrivals, according to Sabah Tourism, at 3.8 million last year. Supported by its rich natural environment and cultural diversity, the potential for its hotel/leisure sub-sector remains positive, said Knight Frank.