Asia's richest, including the IOI Group brothers, ramp up hotel investments in Singapore, amid travel boom

 By NST Property/Sharen Kaur - September 25, 2023 

Singapore expects up to 14 million tourists to visit the country this year, spending some S$21 billion (RM72.1 billion). Pixabay/Photo

sharen@nst.com.my

KUALA LUMPUR: IOI Group's Lee Yeow Chor and Lee Yeow Seng are among at least 10 Asian billionaires investing over S$6 billion (RM20.6 billion) to build new hotels and expand their operations across the island state following Singapore's robust travel rebound, according to Forbes magazine.

  The magazine said that the government expects up to 14 million tourists to visit the country this year, spending some S$21 billion (RM72.1 billion).

  According to a report by travel management firm FCM Consulting, these visitors are driving up room rates to all-time highs. 

  The average room rate this month has risen to S$880 per night, a 27 per cent increase over last year, as the city-state hosts a series of marquee international events such as the Formula One Singapore Grand Prix, according to the report.

  Hotels near the Formula One circuit are reportedly able to charge a premium, with room rates at Marina Bay Sands (MBS) rising to around S$2,000 per night during the race weekend of September 15–17, up from S$800 per night last month. 

  Forbes said that Singapore's main shopping strip, Orchard Road, will house several of the city's newest hotels as part of its revitalisation plan for the surrounding area.

  Brothers Yeow Chor and Yeow Seng, who own both IOI Group and IOI Properties Group Bhd, are building a commercial and residential mixed-use hotel in the Marina Bay financial district.

  The Marina View Residences, which includes a hotel component with a gross development value of RM8.5 billion (US$1.8 billion), will reportedly go on sale during IOI Properties' current fiscal year, which ends June 30, 2024.

  The development will be built on a 7,817-square-metre site purchased from a Singapore government auction in 2021 after a successful RM4.65 billion (S$1.51 billion) bid by Boulevard View, which is wholly owned.

  Aside from the Marina View Residences project, IOI Properties plans to finish the IOI Central Boulevard office towers by the end of 2023.

  IOI Properties also has a stake in other assets in the city-state. Among the developments are South Beach Development, a mixed-use office and hotel complex across Marina Bay developed in collaboration with billionaire Kwek Leng Beng's City Developments (CDL), and Cape Royale, a luxury condominium project built on Sentosa Island in collaboration with Singaporean tycoon Chua Thian Poh's Ho Bee Land.

  According to Forbes, Kwek, chairman of CDL and Hong Leong Group in Singapore, is one of the billionaires building new hotels in Singapore.

  Tan Sri Quek Leng Chan, the founder and executive chairman of Malaysia's Hong Leong Group, is Kwek's cousin. 

  The Kwek/Quek family dynasty is the driving force behind the Hong Leong Group conglomerate, which spans both Singapore and Malaysia, and Forbes Asia ranks them as one of the top 10 richest families in Asia.

  According to Forbes, CDL will open Singapore's first Edition Hotel, a 204-room boutique hotel that will be part of the upscale mixed-use development that will also include the Boulevard 88 residential condominium adjacent to the Four Seasons Hotel.

  Indonesian developers are also making a mark in the city-state. Pacific Eagle Real Estate, owned by billionaire Sukanto Tanoto, opened its first hotel in Singapore, Mondrian Singapore Duxton, in July for S$400 million (RM1.37 billion) and 304 rooms.

  Invictus Developments, owned by Indonesian billionaire Bachtiar Karim, is constructing The Standard, a 143-room boutique hotel near Orange Grove Road. The boutique hotel, which will be located next to the Shangri-La, is set to open next year.

  Indonesian billionaire Mochtar Riady's OUE reopened the 1,080-room Hilton Orchard, formerly known as Mandarin Orchard, in February 2023 after extensive refurbishment to reflect Singapore's agricultural heritage.

  UOL, Singapore's real estate group, is developing the site of the Faber House building on Orchard Road to turn it into a 19-storey hotel with 200 rooms.

  Prior to the current project, the Wee Cho Yaw-controlled group reportedly opened the Pan Pacific Orchard, a 23-story, 347-room luxury hotel that has since become one of UOL's flagship properties.

  Choo Chong Ngen, the Singaporean billionaire and owner of the Hotel 81 budget hotel chain, is expanding into mid-tier markets through Choo Worldwide Hotels, which is led by his daughter, Carolyn. 

  They are purchasing Parkroyal from UOL Group for S$525 million (RM1.8 billion) and rebranding it as Novotel Singapore.

  The Como Metropolitan Singapore, a 156-room luxury wellness hotel developed by Singapore-based Como Hotels and Resorts, is set to open this month off Orchard Road. 

  Christina Ong, the wife of Hotel Properties Ltd managing director Ong Beng Seng, founded Como Hotels and Resorts.

Across Keppel Harbour, billionaire Asok Kumar Hiranandani's Royal Group is working around the clock to finish the luxurious all-villa Raffles Sentosa Resort and Spa on Sentosa Island in time for its grand opening next year.

In addition, Royal Group intends to convert the Ming Arcade, an ageing shopping mall on Cuscaden Road near Orchard Road, into a boutique hotel.

On the same street, Pansy Ho's Shun Tak Holdings will open the 142-room Artyzen Singapore in November, complete with a rooftop garden and a 25-meter cantilevered infinity pool.

Source: https://www.nst.com.my/property/2023/09/959395/asias-richest-including-ioi-group-brothers-ramp-hotel-investments-spore

Chew: 'Real estate is still a good industry but don't expect super profits'

 By NST Property/Kathy B. - September 7, 2023 

Paramount Corp Berhad group chief executive officer Jeffrey Chew Sun Teong. Bernama/Photo

KUALA LUMPUR: The inflationary environment and rising borrowing rates have tempered buyer enthusiasm, and demand has fallen rapidly in the overall real estate market since the pandemic. 

  According to Jeffrey Chew Sun Teong, group chief executive officer and director of Paramount Corporation Bhd, until Malaysian income levels and the economy expand much further, it will take time for demand to reach a high level. 

  He said there will be demand unless the government adjusts its policies to allow the inflow (money or capital) through tourism or if regions like Kuala Lumpur and Penang become regional economic hubs to attract investors. 

  Chew said that there is currently a mismatch between supply and demand. 

  "I believe there is a temporary supply shortage due to slower launches and deliveries caused by the Movement Control Order, which also slowed down construction. When we look at the upcoming projects in the Klang Valley, the number has dropped. The delivery of products is also slowing down.

  "If the economic recovery is strong, there is better hope. We do not think there will be an aggressive recovery. We are cautious," Chew said yesterday at a briefing on the group's first half financial year results ending December 31, 2023 (1HFY2023)

Chew said there was a shortage of residential property in 2011, but that balanced out by 2016.

"Demand will be there, but I don't think demand will catch up. But we think within a year or two, supply will come back. People will have more options as supply increases, and property sales will slow down, which will chip away at developers' profit margins," he said.

Chew said that if all developers consider return on equity, return on assets, or internal rate of return, they will not build until they can make a reasonable profit. 

 "And if you are a buyer, you want more supply so that you can get lower pricing, but for an investor with 10 properties, you want the values to rise. We feel the real estate industry is still a good industry, but don't expect super profits," he said.

According to the National Property Information Centre, the number of overhang and unsold underconstruction units in key places such as Kuala Lumpur, Selangor, Pulau Pinang, Johor, and Kedah has improved.

  Chew said these markets continue to need reasonably priced products, but developers' property launches have not met purchasers' expectations for affordable housing items.

  "When comparing the overhang in 2019 and now, you can see a huge drop in overhang and unsold underconstruction units, but is this due to demand exuberance or a lack of supply?" 

Better performance for Paramount

  Paramount's unsold inventory level, a bulk of which is stratified commercial lots and commercial units, was low in 1HFY2023, at RM56 million, a three per cent decrease from the previous quarter. 

  It sold RM617 million in property in 1HFY2023, and it aims to launch projects worth RM700 million in 2HFY2023. 

  The group intends to launch projects valued at up to RM1.5 billion in fiscal year 2024. 

  Chew said that it was important for the group to launch projects valued between RM1 billion and RM1.5 billion each year in order to meet its yearly revenue target of RM1 billion.

  "We need a turnover of at least RM1 billion. Although we have been aggressive in growing to where we are, from RM200 million in 2014 to RM1 billion now, we are careful about how quickly we want to grow our turnover. Can we or will we want to grow our turnover to RM2 billion in the next seven years?"

  The group's new launches and continued efforts to increase efficiency for a better return on assets and capital are expected to drive higher earnings for 2HFY2023.

  Chew said the new record of unbilled sales of RM1.5 billion as of June 30, 2023, will provide some visibility into the group's cash flow in the near term. 

  However, the pace at which this can be converted into billings would depend largely on the construction progress of projects, he said.

  The Klang Valley accounts for 76 per cent of unbilled sales, with the remaining 24 per cent coming from Kedah and Penang. 

  The Ashwood, a high-rise residential property located in the prestigious U-Thant area of Kuala Lumpur with 312 condominium units  and duplexes and 12 low-rise villas, is among the new projects. 

  Greenwoods Amaria and Salak Perdana are two further developments in the central region. Bukit Banyan residential and affordable landed residences will be launched in the northern region of Sungai Petani.

  The group's undeveloped land stood at 486.6 acres as of June 30, 2023, with a remaining gross development value of RM7.64 billion.

Source: https://www.nst.com.my/property/2023/09/952165/chew-real-estate-still-good-industry-dont-expect-super-profits

Doh: 3 Damansara office tower a strategic investment to build on recurring income

 By NST Property/ Kathy B. - September 11, 2023

Datuk Jimmy Doh

KUALA LUMPUR: Perak-based affordable housing developer Lagenda Properties Bhd said that the purchase of 3 Damansara office tower in Petaling Jaya, Selangor, is part of the company's broader corporate objective to increase recurring income from its investment portfolio.

  Datuk Jimmy Doh, the company's managing director, said that the building has three other income streams besides renting. 

  These include advertising revenue from the front of the building, revenue from the lease of rooftop space to telecommunications providers, and revenue from the provision of utilities to tenants.

  "We have done a stress test and are confident that the transaction will be a positive addition to Lagenda by way of an additional income stream," he told NST Property.

  Doh said that Lagenda has not changed its direction or strategy and that the company is fully devoted to and focused on the building of entirely affordable housing.

  "Our dedication to affordable housing remains unwavering and is central to Lagenda's mission. We feel we are just getting started on an exciting path, given the significant lack of affordable housing in most states, which will continue to generate strong demand in the foreseeable future. Our goal is to become the country's preferred developer for affordable housing," he said.

  Lagenda had planned to offer about 7,000 houses across Perak, Kedah, and Johor this year, a major increase from the 4,800 homes launched in 2022.

  The company's net profit for the six-month period ended June 30, 2023, was RM72.52 million, compared to RM97.39 million in the previous similar period, while revenue was RM377.34 million, compared to RM451.30 million earlier.

  Lagenda is paying RM52 million to CapitaLand M Trust (CLMT) for the office tower, a four per cent premium over its end-of-July assessment of RM50 million. 

  The proposed transaction is expected to close in the first quarter of 2024.

  Doh said that the current market value of the building, as estimated by an independent valuer for this transaction, is RM55 million. 

  "In fact, the purchase consideration is at a five per cent discount to the valuation. In comparison to other buildings in the area that are currently for sale, 3Damansara was the lowest in terms of price on a per-square-foot basis. As such, we are confident that the acquisition is a positive one for the future of Lagenda," he said.

  Doh said based on the feedback received from independent experts during a technical due diligence exercise that was carried out pre-acquisition, the building is currently deemed to be in good condition.

  He said that the vendor (CLMT) has agreed to provide rectification for items raised during the technical due diligence process.

  Doh did not rule out the potential of a future transformation project.

  He said that the company's current key focus is on optimising the building's occupancy and realising its full potential.

  Doh expects to achieve an occupancy rate of at least 80 per cent within a year of completing the transaction.

  Negotiations with many additional potential tenants for space in the building are ongoing.

  "The building serves a dual purpose of providing a central headquarters for the company's growing workforce and sales gallery needs," he explained.

  Doh said that the office tower's position is vital, as it is located between the company's key projects in Kedah and Perak, as well as upcoming large projects in Johor.

  The office skyscraper is strategically located at the intersection of the SPRINT and LDP motorways. This improves Lagenda's brand awareness and repute, positions the company favourably for attracting top talent, and considerably increases foot traffic to the new Lagenda sales gallery. 

  "We are growing and have increased our headcount. Ultimately, in order to continue offering affordable homes to the underserved market, we must attract qualified industry expertise. 

  "A centralised location will enable us to accomplish this while also fostering a sense of unity among our employees and stakeholders," he said.

Source: https://www.nst.com.my/property/2023/09/953861/doh-3-damansara-office-tower-strategic-investment-build-recurring-income

Keeping OPR at 3.00pct reassures Malaysia's real estate market

 By NST Property/Kathy B. - September 8, 2023

Whether Bank Negara raises, lowers, or leaves rates steady in 2024 will depend on how strong the economy is and how fast prices grow, said Kashif Ansari, co-founder and group chief executive officer of Juwai IQI.

KUALA LUMPUR: Interest rates in Southeast Asian countries are generally rising.

On Aug 1 this year, the benchmark rate in Singapore, known as the Singapore Overnight Rate Average or SORA, was 3.674 per cent, up from 3.029 per cent on Jan 1.

Many mortgages are related to the SORA. It is based on the volume-weighted average rate of borrowing transactions in Singapore's unsecured overnight interbank SGD cash market between 8 am and 6.15 pm.

Thailand's central bank raised its policy rate for the seventh time in a row in August. The rate was hiked by 25 basis points (bps) to 2.25 per cent.

Meanwhile, Indonesia's benchmark interest rate has remained unchanged at 5.75 per cent.

Bank Negara Malaysia started raising rates before other central banks, and that kept inflation from getting as high and causing as much damage as it has in the US and Eurozone. 

Whether Bank Negara raises, lowers, or leaves rates steady in 2024 will depend on how strong the economy is and how fast prices grow, said Kashif Ansari, co-founder and group chief executive officer of Juwai IQI.

"Homeowners hope the economy remains strong enough to support high employment and household income, but not so strong that Bank Negara has to raise rates and make their mortgages more expensive. Right now, we seem to be in that lucky zone," he said.

Bank Negara startled onlookers in May by raising the overnight policy rate (OPR) by 25bps from 2.75 per cent to 3.00 per cent, after pushing the pause button at Monetary Policy Committee (MPC) meetings in January and March. 

This restored the OPR to its pre-pandemic level of 3.00 per cent. It maintained the OPR following the previous MPC meeting in July.  

Looking back, the OPR has risen by a total of 125bps since May 2022, the quickest increase since records began, and it is working to reduce inflation and stabilise the economy. 

Bank Negara raised rates four times in 2022, totaling 100bps, and then raised rates again by 25bps in May 2023.

Following its two-day MPC meeting, the central bank said on Thursday (Sept 7) that it would keep the OPR at three per cent.

The central bank said in a statement that at the present OPR level, monetary policy remains "supportive of the economy" and is consistent with the current assessment of inflation and growth expectations. 

Moving forward, it is said that growth will be powered by strong domestic expenditure in the face of a challenging external environment.

Kashif said Bank Negara's decision to keep the OPR level constant has reassured the Malaysian real estate market. 

"The steady OPR rate brings certainty and stability to the market. It's a good sign for housing affordability and makes it easier for developers to create new housing for Malaysians. 

"The decision will reinforce the growing residential real estate market, where transactions are increasing and the property overhang is shrinking," he said.

Each time the mortgage interest rate rises by 25bps, the monthly payment increases by around RM77. 

That means that for a RM500,000 loan with a 30-year term and a five per cent interest rate, monthly payments would rise from RM2,684 to RM2,761.

"In simple terms, Bank Negara's decision means housing will remain relatively affordable compared to the alternative. Homebuyers and owners won't see their mortgage payments go up. Landlords won't feel financial pressure to raise rents for their tenants.

"Looking forward, we expect Bank Negara to again leave the rate unchanged at its next meeting in November. Look around the region, and you'll see that Malaysia's inflation, economic growth, and interest rate environment are relatively good," he said.

Source: https://www.nst.com.my/property/2023/09/952700/keeping-opr-300pct-reassures-malaysias-real-estate-market

Special urban renewal law to revitalise older structures, and uneconomical areas

 By NST Property/Sharen Kaur - September 8, 2023 

Urban renewal includes redevelopment, regeneration, revitalisation, and conservation. Pixabay/Photo

sharen@nst.com.my

KUALA LUMPUR: The Ministry of Local Government Development (KPKT) is working on a new law to ensure systematic, well-planned, and effective urban renewal efforts that would help the country's economy grow.

  Its minister, Nga Kor Ming, said that the special law was drafted in collaboration with the Malaysia Productivity Corporation (MPC) and the Town and Country Planning Department. 

  Urban renewal includes redevelopment, regeneration, revitalisation, and conservation.

  Currently, urban renewal is being carried out through nine existing legislations and laws, with legislation encompassing numerous ministries, departments, and organisations.

  Among them are the National Land Code, Town and Country Planning Act, Contracts Act, and Land Acquisition Act. 

  "If we look at development in the country, there are several things that hinder efforts towards urban renewal, including the absence of specific legislation," he said recently after launching the Urban Renewal Implementation Guidelines (GPP PSB).

Datuk NK Tong

Malaysia's Real Estate and Housing Developers' Association (Rehda) endorses the idea of enacting a new law to govern the country's urban regeneration efforts.

  Its president, Datuk NK Tong, said that such a law is long overdue, given the current lack of streamlined governance on such subjects, which is carried out by nine distinct government departments and organisations. 

  In formulating this law, the government, through the KPKT, has exhibited a long-term and balanced approach to economic growth, he said.

  "While we know that the trend towards urbanisation will continue to expand, KPKT recognises that this must be done in an orderly and proactive manner, which includes ensuring that older buildings are given a new lease of life, even as newer buildings appear to fill the growing demand for urbanisation."

  Conservation, which is also included in the agenda, will further protect the cultural and architectural heritage that is essential to making a city vibrant and relevant while also paying respect to the country's history, he said.

Meanwhile, the new law is anticipated to be tabled in Parliament soon, with a presentation date set for next year.

  It will enable GPP PSB to be utilised across the country.

  Nga said GPP PSB was developed since urban renewal administration varies by states and local authorities (PBTs), and there is no common practice across the country.

  The PSB GPP will serve as a guideline and point of reference for the federal government, state and local governments, developers, and other stakeholders in the redevelopment of obsolete and abandoned townships.

  KPKT will establish a geospatial database for urban rejuvenation through PLANMalaysia, especially as Malaysia's urbanisation rate is predicted to reach 85 per cent by 2040. 

  "The role of the geospatial database is as an inventory of the location and site information for potential areas for urban renewal for the whole country and is equipped with information such as the age of buildings or areas, the status of building conditions, and others," he said.

  The data is now kept by Kuala Lumpur City Hall, which has identified 139 redevelopment areas totaling 1,297 hectares. 

  Nga claimed that this will lead to better redevelopment planning for lonely, old, and uneconomical areas, changing them into zones that can provide urban residents with a high quality of life.

Source: https://www.nst.com.my/property/2023/09/952502/special-urban-renewal-law-revitalise-older-structures-and-uneconomical-areas

YTL Hospitality REIT acquires Hotel Stripes Kuala Lumpur for RM138 mln

 By NST Property/ Sharen Kaur - September 7, 2023

YTL Hospitality Real Estate Investment Trust is acquiring Hotel Stripes Kuala Lumpur, Autograph Collection, for RM138 million in cash. Pix credit: ytlhotels.com

sharen@nst.com.my

KUALA LUMPUR: YTL Hospitality Real Estate Investment Trust (YTL Hospitality REIT) has added Hotel Stripes Kuala Lumpur, Autograph Collection, to its portfolio after acquiring the property for RM138 million in cash.

  Stripes Kuala Lumpur, Autograph Collection, is a five-star hotel on Jalan Kamunting in Kuala Lumpur. 

  The property's audited net book value was RM48.7 million as of June 30, 2022.

  Maybank Trustees Bhd, the REIT's trustee, signed a conditional sale and purchase agreement with the vendor, Hotel 25 Sdn Bhd, to acquire the property on September 6.

  The transaction, which is slated to close in the second half of this year, is classified as a related party transaction (RPT). 

  Hotel 25, a hotel operator, is an indirect wholly owned entity of YTL Corp Bhd, which is an indirect main stakeholder of Pintar Projek Sdn Bhd through its majority stake in YTL Land Sdn Bhd, Pintar Projek's parent company. 

  YTL Corp is also a significant unitholder in the YTL Hospitality REIT, which has a market value of around RM1.7 billion. The REIT is managed by Pintar Projek.

  Following the conclusion of the proposed acquisition, the hotel will be leased back to Hotel 25 for an initial term of 15 years, with an option to renew the lease for another 15 years, according to a filing with Bursa Malaysia.

 YTL Hospitality REIT said this move is part of its investment strategy and portfolio expansion.

There are 15 properties across Malaysia, Japan, and Australia that make up the portfolio, which is presently valued at RM4.825 billion.

  The RM138 million acquisition price is planned to be paid by borrowings or internally produced money, it said.

  YTL Hospitality REIT said the acquisition is consistent with its investment objective of continuously acquiring and investing in high-quality hospitality properties in Malaysia and internationally, with the goal of providing long-term and sustainable income distribution to unitholders and achieving long-term growth in net asset value per unit.

  According to the lease agreement, the REIT will receive fixed rental payments from the tenant, with a five per cent step-up provision every five years. 

  "As such, the proposed lease is expected to contribute positively to future distributable income and distribution per unit of the REIT after taking into consideration, among others, the additional income received from the lease arrangement and estimated borrowing costs," it said.

YTL Hospitality REIT's net profit surged to RM141.22 million in the fiscal year ended June 30, 2023 (FY2023) from RM83.87 million a year ago, as a result of better performance and a higher fair value gain.

Revenue in FY2023 increased to RM486.83 million from RM363.86 million previously, while net property income was higher at RM251.27 million versus RM214.82 million before.

Source: https://www.nst.com.my/property/2023/09/952043/ytl-hospitality-reit-acquires-hotel-stripes-kuala-lumpur-rm138-mln

CapitaLand M Trust to sell 3 Damansara office tower for RM52 mln to Lagenda Properties

 By NST Property/Sharen Kaur - September 6, 2023 

Image credit: /www.capitaland.com

sharen@nst.com.my

KUALA LUMPUR: CapitaLand M Trust (CLMT) has agreed to sell its 3 Damansara office towers in Petaling Jaya, Selangor, to affordable housing developer Lagenda Properties Bhd for RM52 million.

  According to the stock exchange, the sale price reflects a four per cent premium over its end-of-July valuation of RM50 million.

  The proposed divestment is scheduled to be completed in the first quarter of 2024.

  CLMT said that the net proceeds of the sale will be used to repay borrowings, reducing its gearing to 43.5 percent from 44.1 percent.

  "This will help the entity pursue higher-yielding opportunities in the new economic sectors", said CapitaMalls Malaysia REIT Management Sdn Bhd's (CMRM) chief executive officer, Tan Choon Siang.

  CMRM, the manager of CLMT, acquired Tropicana City Mall and Tropicana City Office Tower from Tropicana Corp Berhad's unit, Tropicana City Sdn Bhd, for a total of RM540 million in 2015.   Including the acquisition fee and expenses, the total acquisition cost came to about RM565 million.

  Tan said that the proposed disposal will be DPU (dividend per unit)-accretive and will enhance CLMT's balance sheet. 

  "We will continue to actively review our portfolio to deliver greater income stability and optimise returns for unitholders," Tan said.

  CLMT also has eight other properties in Penang, Klang Valley, and Pahang, including six retail and two logistics properties.

Source: https://www.nst.com.my/property/2023/09/951598/capitaland-m-trust-sell-3-damansara-office-tower-rm52-mln-lagenda-properties

What's whetting investors' appetite for Menara Maybank?

 By NST Property/Sharen Kaur - September 5, 2023

Menara Maybank

sharen@nst.com.my

KUALA LUMPUR: Appetite towards Menara Maybank has increased since Malayan Banking Bhd (Maybank) announced its relocation to Merdeka 118, the world's second-tallest building, owned by its largest shareholder, Permodalan Nasional Bhd (PNB).

  Market insiders said that Menara Maybank, a 55-storey skyscraper in Pudu, Kuala Lumpur, is on the radar of investors.

  "Menara Maybank is attracting attention due to its prime location. Companies are hunting for older buildings in Kuala Lumpur's city core to relocate their headquarters since the leasing cost is less expensive than relocating into a brand new structure.

  "We understand PNB may rent out Menara Maybank to sub-tenants once all Maybank employees relocate to Merdeka 118. However, if it receives a good offer for Menara Maybank, it may sell the building," a person with knowledge on the matter told NST Property.

Menara Maybank stands proudly between Jalan Tun Perak and Jalan Raja Chulan. Photo/Sharen Kaur

  Menara Maybank began construction in 1984 on Court Hill, on the site of a colonial-era Sessions Court structure, and was completed in 1987. 

  Before the Petronas Twin Towers were built in 1995, Menara Maybank was the highest structure in Kuala Lumpur and Malaysia, standing at 244 m (801 ft), roughly half the height of the twin towers.

  "Menara Maybank can be refurbished into offices to enjoy a new lease of life and attract a different segment of tenants," said KGV International Property Consultants executive director Anthony Chua.

Despite its age, Chua believes the building can attract foreign renters or investors.

Maybank to relocate to Merdeka 118 in 2025

Maybank, the country's largest bank by asset size, had entered into a 21-year tenancy arrangement with PNB, which included a three-year initial term and six three-year renewal agreements for Merdeka 118.

  According to the conditions of the tenancy agreement, the monthly gross rent is RM10.60 per square foot, subject to modification after the first two terms or six years.

  Maybank will occupy 33 floors of Merdeka 118 and has been granted naming and signage rights to the structure.

All current Menara Maybank offices will be relocated to Merdeka 118 in stages, beginning in the first quarter of 2025.

Also relocating to Merdeka 118 are selected Maybank subsidiaries currently based in Dataran Maybank, including Maybank Islamic, Maybank Investment Bank, and Maybank Asset Management.

  The total occupancy of 650,000 sq ft at Merdeka 118 will be less than its current net lettable area of 1.09 million sq ft at Menara Maybank.

  Before this, Maybank had relocated some 1,500 employees to Mercu Maybank, located at i-City in Shah Alam, Selangor, to improve its business continuity management and resilience planning.

  Mercu Maybank (formerly known as Menara Sumurwang) was unveiled on April 7, 2022, and the employees began moving in gradually.

  Meanwhile, Menara Maybank had entered into a 10-year lease deal with PNB to lease the property to PNB on a triple-net basis, which means that PNB will bear all Menara Maybank expenses, including maintenance, insurance, and all taxes.

  Maybank will earn a minimum guaranteed rental of RM12.1 million per year for the next ten years.

  Maybank group president and chief executive officer Datuk Khairussaleh Ramli said in a statement last September that because the bank is not in the business of property development, the group saw it prudent to pursue the tenancy option while evaluating the best options for Menara Maybank, which it owns and will become largely vacant with the move to Merdeka 118.

Homebuyers face hardship with 'extension of time'

 By NST Property/Kathy B. - September 5, 2023

Prior to 2014, granting an extension of time was almost unheard of, Pixabay/Photo

KUALA LUMPUR: A total of 536 'extension of time' (EOT) approvals were issued to property developers from 2014 to mid-2019, according to Datuk Chang Kim Loong, secretary general of the National House Buyers Association (HBA).

 EOT is one of the provision clauses in the standard contract form; in the event of unforeseen circumstances, it enables developers more time to complete the project without being fined. 

  The developer is required to complete and deliver over the house within 24 months (for landed properties) or 36 months (for stratified properties) under the conditions of the Sale and Purchase Agreement (SPA) between a housing developer and the house buyer. If the developer fails to deliver within this time frame, the house buyer must be compensated by paying liquidated damages (LAD) of 10 per cent per year on the purchase price for late delivery. 

  However, some property developers (who do not reach the deadline) look for opportunities to file for an EOT in order to avoid this additional loss or expense. 

  When the Housing Controller grants an EOT for a delayed project, it effectively eliminates the compensation or LAD owed.

  According to Chang, the floodgate of EOT began in 2014 onwards.

  Prior to 2014, granting an EOT was almost unheard of, he told NST Property.

  "The figure (536 EOTs) is mind-boggling. How could the relevant authorities have issued the EOTs to developers to save them from having to pay late delivery compensation to the detriment of house buyers?

  "Has our country now reached a state of economic crisis where the minister must dish out EOTs to developers who are already in distress and have threatened to abandon their projects?

  "If left unchecked, the power may be abused and susceptible to corrupt practices. The buyers will ultimately be at the mercy of housing developers, especially those who walk the corridors of power," Chang said. 

 Chang said the gross injustice should be checked under the new housing minister's watch. 

  He said any decision that deprives the house buyers of their rights and entitlements should be exercised transparently, strictly, and with open communication. 

  "At the very least, the views of the buyers directly affected must be considered prior to the Minister making a decision. The right to be heard is of utmost importance!

  "Do they not know that buyers too face hardships and commitments, having to pay rent while continuing to service their bank housing loan?

  "They too bear the burden of additional costs and expenses for the delay, as well as having their future plans derailed. One cannot continue to unilaterally hear the views of the housing developer and shun the buyers," he said.

Datuk Chang Kim Loong, secretary general of the National House Buyers Association.

The formation of the HBA to aid homebuyers

  Minister got 'tick off,'  read the headline of a major newspaper.

  It was 1999, and that year marked the humble beginning of the HBA, a voluntary, non-profit organisation.

  Housing abandonment was rampant at the time, and dissatisfied buyers had difficulty getting their views heard by the regulating authority, the Ministry of Housing.

  "The very people who confronted the Minister of Housing in 1999 are the ones who initiated HBA," according to Chang.

  Chang said the HBA protem committee came into existence in October 1999, comprising a group of aggrieved house buyers who had discovered to their disappointment that getting their woes heard was a frustrating process.   

  "The then-housing industry was in shambles, and businesses were conducted by pro-developers in style and fashion, and there was no single entity explicitly representing the interests of house buyers," he said.

  Chang said there were non-government organisations (NGOs), namely the Federation of Malaysian Consumers Association (FOMCA) and the Consumer Association of Penang (CAP), assisting some aggrieved buyers with housing-related issues, among other public interest issues that their respective organisations' pursue.

  "For all the new laws and government tribunals set up to rein in our sometimes overzealous property industry, the only effective enforcement agency around, capable of righting wrongs and locking horns with errant bulls, is the HBA."

  Chang said the HBA, which only insists troubled house buyers be "nice and humble" and also be "willing to help themselves" before offering assistance, was originally seen as rebel-rousers—thorns at the sides of developers—whingers whose complaints would not be constructive.

  "That was then. A mere three years after its inception, the HBA is now seen as a property police squad of sorts, driven by a passion to do what is right," Chang said.

  He said that, historically, the HBA has functioned during the tenures of 10 Ministers of Housing and Local Government (now titled Minister of Local Government Development).

  Before the HBA, property buyers who were dissatisfied with their developers could only complain to the people who caused their troubles, Chang said.

  He said that the HBA, under the slogan "Striving for House Buyers' Rights and Interests," was determined to change the laws and legislation so that those purchasing new homes receive the same level of consumer protection and redress as all other new products of significantly lower cost.

  "From the complaints we have received and from the media reports, the damage sustained by house buyers who have trusted their developers to deliver their products efficiently is too numerous," he said.

  Chang said HBA aspires to see a level playing field between developers and house buyers and that the rights of house buyers are not shortchanged.

  He said that the HBA will continue to provide constructive criticism on the core needs for ensuring that new homes are built and delivered on time and correctly, and that consumers purchasing them can have realistic trust that they are purchasing well with a commensurate degree of after-sales support.

Road, rail improvements will boost demand for well-planned projects while keeping prices stable

 By Sharen Kaur - September 4, 2023 

The current pause in overnight policy rate hikes, coupled with better labour market conditions will continue to strengthen the home market. Photo/Sharen Kaur

sharen@nst.com.my

KUALA LUMPUR: Improvements in road and rail connectivity will boost demand for well-planned residential projects in key cities, and pricing will stay stable in the future, according to Judy Ong, senior executive director of research and consultation at Knight Frank Malaysia.

  She said that the current pause in overnight policy rate (OPR) hikes, coupled with better labour market conditions (unemployment rate of 3.4 per cent in June 2023), will continue to strengthen the home market.

  This is despite a slowdown in the economy, with gross domestic product recorded at 2.9 per cent in 2Q2023 (1Q2023: 5.6 per cent), Ong said.

  After Malaysia's economy advanced 5.6 per cent year-on-year (YoY) and the unemployment rate tightened to 3.5 per cent in the first quarter of this year, both Kuala Lumpur and Penang saw their prices grow by 0.34 per cent and 5.78 per cent YoY, respectively.

  Penang was the second-best performing city in SEA in terms of price growth, according to Knight Frank's Asia-Pacific Residential Index for H1 2023. 

  The report tracks the movement of average residential prices within the Asia-Pacific region across 25 cities.

  Out of the 25 cities tracked by Knight Frank, 14 registered positive YoY growth in the first half of 2023, which decreased from 18 in H2 2022. 

  Although rate hikes are expected to have reached the tail end of the hiking cycle, uncertainty will still carry through till the end of the year, it was noted.

 Developers, meanwhile, have continued to launch projects, confident that demand will hold, although economic growth is set to moderate to 4.5 per cent to five per cent for the full year.

  Victoria Garrett, head of residential at Knight Frank Asia-Pacific, said that after the bull run in home values over the past few years, prices plateaued six months into 2023, indicating that a correction is taking place in more markets.   

  With rate hikes being paused, buyers are utilising this window of opportunity to lock down on their dream homes, which is notably predominantly seen in Australia, New Zealand, and India, he said. 

  Garett said while the high inflationary conditions plough on, the combination of limited housing supply, restricted new construction, and robust household formation will support prices in various markets.

  Christine Li, head of research at Knight Frank Asia-Pacific, said the Asia-Pacific region maintains a balanced outlook, adapting to global challenges while showcasing resilience in key markets. 

  Steady sales momentum, positive year-on-year growth in select markets, and buyer confidence in the face of diminishing affordability underscore the region's promising outlook.

  "As we move forward, the rate of price deceleration in Australasia could start to restore confidence in the Australian and New Zealand markets, while the rise in income levels, coupled with a strong aspiration for property ownership, will sustain demand in emerging markets such as India and Malaysia," he said.

IJM seeks recurring income

 By NST Business/Sharen Kaur - September 12, 2023 

"There is the ART with hydrogens in Sarawak. That is most likely one of the options we will consider. We are looking for potential TOD sites along the Mass Rapid Transit Line 3 (MRT3). I'm here to expedite development at IJM Land,” its chief operating officer Datuk Tony Ling Thou Lung said.STU/NABILA ADLINA AZAHARI .

KUALA LUMPUR: IJM Land Bhd will broaden its product offering and build more mixed-use integrated complexes with commercial assets in key cities to expand its investment portfolio for recurring income.

The developer seeks to diversify its risk away from pure residential development projects for sale and into recurring income assets following two years of a home market downturn triggered by the Covid-19 outbreak.

IJM Land is seeking to build additional investment buildings like office towers, hotels, malls, and convention centres, as well as wellness and medical facilities with assisted living, which can produce more steady recurring revenue than selling residential units.

It also plans to build industrial parks as well as undertake transit-oriented developments (TOD) and autonomous rail transit-related (ART) projects.

"There is the ART with hydrogens in Sarawak. That is most likely one of the options we will consider. We are looking for potential TOD sites along the Mass Rapid Transit Line 3 (MRT3). I'm here to expedite development at IJM Land," its chief operating officer Datuk Tony Ling Thou Lung said.

"I studied the mandate I was given, which was to drive the company's strategic mission. We've been strategising what our short, medium and long-term goals should be. We are developing a variety of items that will hit the market during the next five years," Ling told the New Straits Times.

IJM Land has been concentrating on township developments like Rimbayu and Seremban 2, which are primarily residential-based. Both townships will take another 10 years to finish.

The company is also developing two large mixed-use integrated developments, The Light City in Penang and Pantai Sentral Park (PSP) in Kuala Lumpur, which will take 10–15 years to complete.

It is looking to expand into the commercial segment of the property market, not just for recurring income but also to increase the gross development value (GDV) of its projects.

"The property development market is now demonstrating resilience to market changes. Yes, some of the developers were affected by the pandemic, but they are all recovering. As far as IJM Land is concerned, all our launches are doing very well.

  "The bread and butter for IJM Land previously was township developments, but now we are moving into integrated developments with serviced apartments and retail because of diverse demographic changes and rapid urbanisation where people are looking for well-designed and sustainable homes. I am very optimistic about the future," Ling said.

IJM Land achieved its highest local sales of RM2.7 billion in the financial year ended March 31, 2023 (FY2023), surpassing its previous record of RM2.5 billion in the year before that.

The company has set a sales target of RM2.1 billion for FY2024.

Although there is a lower sales target, IJM Land expects to perform better in FY2024, backed by RM3 billion in healthy unbilled sales as of March 31, 2023.

This year, the company plans to launch nine new residential projects totaling RM2.1 billion in gross development value.

Source: https://www.nst.com.my/business/2023/09/954144/ijm-seeks-recurring-income%C2%A0