Johor ups its game to become the next Shenzhen in order to attract investors

 By NST Property/ Kathy B. - October 18, 2023

KUALA LUMPUR: Malaysia's southern state of Johor is intensifying efforts to improve the local market environment, making it more appealing to investors and boosting the region's prowess.

  An industry insider said this should open new doors in the country's economic transition.

  "Johor has announced several measures so far this year to optimise its business environment. This includes the revival of the Kuala Lumpur-Singapore high-speed rail, the setting up of an international financial hub in Forest City, and the Johor-Singapore special economic zone (SEZ).

  "Other game-changers include the RTS and the double-track electrified rail project, which is expected to be completed by 2025. All of these new developments are making Johor Bharu a popular investment destination," said Sr. Samuel Tan, executive director at KGV International Property Consultants.

  He told NST Property that, in addition to manufacturing, Johor should focus on services such as education, healthcare, information technology, finance, and logistics.

  Looking to turn itself to Shenzhen, China's so-called Silicon Valley, Johor plans to attract more foreign investment through the SEZ and seek a stronger footing in the push for the Greater Iskandar Malaysia region.

  The Johor state government is confident that the SEZ and the Special Financial Zone (SFZ) will catalyse the state's economic growth.

Menteri Besar Johor, Datuk Onn Hafiz Ghazi. NSTP/NUR Aisyah Mazalan

  Menteri Besar Datuk Onn Hafiz Ghazi said in a Facebook post yesterday that the SFZ and SEZ could strengthen Johor's position as Singapore's most important strategic partner.

  He disclosed that representatives from the Johor State Economic Planning Division, the Iskandar Regional Development Authority, and the Forest City Regional Management met at the Menteri Besar's official residence to discuss the SFZ.

  "There were several proposals by Forest City to create the best financial hub ecosystem, such as constructing a route from the LINKEDUA highway directly to Forest City and creating 10,000 new jobs within 10 years.

  "Another proposal is to ease cross-border travel by creating multiple entry visas and a fast-track immigration clearance lane, as well as special tax and incentive packages," he said.

  Banking and finance, capital markets, financial and innovation technology, Islamic finance, property management, and insurance and risk management are among the six financial sector proposals being refined, according to him.

  "I was also informed that several renowned hospitals, international schools, and higher education institutions have also expressed their interest in becoming part of the SFZ eco-system in Forest City.

  "Hopefully, this economic spillover will benefit all Johorians and achieve Johor's aspiration to become a developed state by 2030," he said.

  Onn Hafiz had previously said that Johor has the potential to flourish like Shenzhen if SEZ becomes a reality.

  He said that in the four decades since it was made a special economic zone, Shenzhen has transformed from a small city with a population of about 300,000 people to a high-tech international metropolis with a population of over 17 million.

  It took the once sleepy fishing village of Shenzhen just four decades to turn itself into a thriving technology hub, arguably eclipsing its neighbour, Hong Kong, in the process. 

  In those four decades, Shenzhen's gross domestic product (GDP) in 2021 exceeded three trillion yuan (more than US$400 billion), while it has become the third largest city in China.

  "What Shenzhen has achieved also proves that the Johor-Singapore SEZ can produce the best results for Johor," he said.

Johor is one of the country's most prosperous states

  Deputy Finance Minister Steven Sim said in his speech during the launch of a pedestrian skybridge linking Coronation Square to the JB Sentral station in June that Johor is at the forefront of the country's economy.

  He said that through the Madani budget, the unity government has increased its allocation from year to year, with RM897.62 million in 2022 and an estimated RM914.03 million this year, with an addition of RM4.53 billion for development projects.

  Sim said that in 2022, Johor ranked at the top among five states with the highest foreign direct investments, followed by Selangor (RM60.1 billion), Sarawak (RM28.2 billion), Kuala Lumpur (RM25 billion), and Penang (RM16.3 billion)," he said in his speech at the skybridge launch.

  According to RHB Investment Bank Research (RHB IB), further catalytic developments in Johor Bahru may be focused on the Malaysia-Singapore Second Link area, as indicated by Johor executive council member for investment, trade, and consumer affairs Lee Ting Han.

  "During our meeting, Lee indicated that the SEZ may involve a few specific sectors, and the finalisation of the terms of reference during the upcoming meeting at the end of this month by the two countries's leaders should facilitate further talks on collaboration," it noted.

  RHB IB said Lee believes that Johor is a beneficiary of the US-China trade war, as he has received strong interest from multinational corporations since the borders reopened.

  "The fast-lane service has eased the entry of corporations in the digital economy, pharmaceuticals, electrical and electronics, electronics manufacturing services, chemicals and petrochemicals, and aerospace sectors," it said.

  RHB IB has maintained an "overweight" call on the real estate sector, identifying UEM Sunrise Bhd and Sunway Bhd as the major players in the Johor market.

Source: https://www.nst.com.my/property/2023/10/968335/johor-ups-its-game-become-next-shenzhen-order-attract-investors

The New Industrial Master Plan 2030 will drive industrial demand in Malaysia

 By NST Property/ Kathy B. - October 16, 2023 

Pixabay/Photo

KUALA LUMPUR: The government's New Industrial Master Plan 2030 (NIMP) to increase manufacturing value adds positively to Malaysian industrial demand.

According to UBS, growth in foreign direct investment (FDI) and domestic direct investment (DDI), as well as industrial property values transacted, has historically been faster than growth in value add (2.0 to 5.0 percent per year).

"Hence, to get to the government's goal of 6.5 per cent per annum improvement in value added between 2021 and 2030, we think this will imply up to a 10 per cent compounded annual growth rate (CAGR) in FDI/DDI and, consequently, industrial transaction values," it said.

  The strong inbound direct investments are expected to entail significant industrial land requirements in the setup of manufacturing and logistics capabilities.

  UBS said mature industrial parks near Senai are seeing strong interest from both multinational companies (MNCs) and Small and medium-sized enterprises (SMEs). 

  "For Johor, industrial parks are not distinguished by a particular sector concentration but are better categorised by light, medium, or heavy industries. Hence, such parks can fill up quickly. Overall, we think industrial lands that are connected to transport hubs (particularly near Senai, Pasir Gudang Port in Johor's north and east) are becoming scarcer. This is based on our comparison of the built-up area versus existing land zoning.

  "We think developers' subsequent landbanking push to industrial is unlikely to result in oversupply. The key is developers sizing up the demand potential effectively," it said.

  UBS said that for now, recent industrial landbank transactions that it observes are in the 'hundreds of acres', as opposed to 'thousands of acres' seen within residential townships, as in the past. 

  It said that, to some extent, prime industrial lands are already constrained by their remaining undeveloped size.

  "While it would be an opportune moment for agricultural landowners to extract value from their lands, our conversations with key landowners in Johor (Johor Corporation) suggest that prime industrial lands near connectivity nodes will likely be kept. This will mitigate the supply profile," it said in a note.

  UBS said that, in terms of timing, direct investments (including industrial properties) are likely to be frontloaded into the earlier years of the NIMP (2024–2026).

  It believes that the size of the addressable market could approach a significant RM23 billion to RM49 billion per annum, a record high. 

  "This assumes the government's targets are met. If we assumed a modest 3.0 per cent CAGR on value-added growth and a twofold increase in direct investment (6.0 per cent), the floor for industrial transactions could be a minimum of RM13 billion to RM15 billion per annum, still sizeable. This growing pie would spell abundant opportunities for developers to capture market share," it noted.

  The National Energy Transition Roadmap (NETR) push towards renewable energy is also land-intensive, particularly from solar farms, which need to be located on industrial zoned lands. 

  "There is an announced plan to create up to 1 GW of hybrid solar capacity. We estimate that this would translate to a minimum of 2,000 acres of industrial land required, conservatively speaking. This assumes a large-scale 'efficient' rooftop solar setup.

  "If we assume stand-alone solar farms, that brings demand for industrial land to a high of 5,000 acres. While the need is big in theory, there are certain hurdles that the developers face in participating meaningfully. 

  "We list down payback considerations between different industrial and solar projects. Developers' current business model of building to sell industrial properties would appear to be the most cash-generative. Although operating solar farms has a similar payback period (on upfront costs) to leasing industrial properties, high maintenance costs and lower perceived capital appreciation pose longer-term investment uncertainties at the moment. 

  "This is why solar farms are only a small fraction of developers' industrial townships. Should the former issue of higher maintenance costs be resolved (by working groups such as Sime Darby Property), this could then unlock a meaningful expansion of the addressable market for industrial land," it said.

Source: https://www.nst.com.my/property/2023/10/967564/new-industrial-master-plan-2030-will-drive-industrial-demand-malaysia

HBA says its "a shame" to reduce consent threshold for strata property redevelopment

 By NST Property/ Kathy B. - October 16, 2023 

HBA secretary-general Datuk Chang Kim Loong

bt@nst.com.my

KUALA LUMPUR: The National House Buyers Association (HBA) has criticised the government's proposal to remove the 100 per cent consent requirement from apartment and flat owners before redeveloping a strata property scheme, calling it "a shame".

"First and foremost, occupants have no say in any dissolution of stratified properties or en-bloc. The rights and entitlements rest with the owners, whether registered or having beneficial interests.

"No rightful homeowner should be disadvantaged in any scheme in the name of redevelopment, rejuvenation, en-bloc, or revitalisation, when there are plenty of reasons such a move is unnecessary," HBA secretary-general Datuk Chang Kim Loong said.

Chang told the Business Times that any plan to redevelop, revitalise, or renew strata schemes must be approved by all homeowners rather than through an "en bloc sale."

He also questioned the necessity of encouraging urban migration to already overcrowded cities.

"In Malaysia, there is plenty of development land within the Greater KL vicinity without having to saturate the capital city with more high-end condominiums and commercial buildings, which are already bogged down by overhang and low-occupancy issues.

"Of course we need to develop our cities, but Kuala Lumpur and its fringes are already congested enough. We have to avoid overbuilding within the city. Studies have shown the adverse effects of urban migration. What is required is to develop other parts of the country so Malaysians do not have to keep huddling into the Klang Valley for jobs.

"Why don't we develop the outskirts along the various railway stations? The policymakers should ask the Railway Assets Corporation for its cooperation towards nation-building," he said.

Chang said that the proposal would violate Article 13 of the Federal Constitution, which deals with property rights.

Prime Minister Anwar Ibrahim said that the "consent threshold" would be reduced from 100 per cent to "a level consistent with international practice, like Singapore," to allow for the redevelopment of strata schemes in his 2024 Budget speech, which was tabled on Friday.

Chang said that before proposing a new rate for the so-called "consent threshold," which currently requires 100 per cent agreement from strata-title owners before any renewable measures are permitted, the government must conduct a "Regulatory Impact Analysis" (RIA).

He said that proceeding with a "consent threshold" or "en-bloc sale" with any rate of majority vote will deprive certain homeowners of their properties. 

As such, the purported redevelopment law will be in flagrant violation of Article 13 of the Federal Constitution, and its passage will not legitimise it, he said.

"We hope the present government will not emulate the footsteps of its predecessors, who tried to ignore the unconstitutional impact such a law would have on homeowners, whether within or without the Federal Territories. And if we are not careful, the potential redevelopment law could also be extended to cover landed non-strata schemes," said Chang.

Chang believes that this move may spark a battle between'sell' and'stay' owners.

He said that enacting this new law for en-bloc sales without the genuine consent of all owners will create disharmony in any development, strata or not, and could lead to social unrest.

"You'll be surprised at how a quiet and peaceful housing estate can be turned upside down when redevelopment is discussed. The minority homeowners may be forced to give in to pressure from the majority homeowners who decide to sell their properties for large profits. 

"This is not a simple business transaction. Money, emotion, and uncertainty among neighbours are all involved. The main beneficiaries of all of this are property developers and their agents who canvass their wares," he explained.

Meanwhile, Tan Ka Leong, group managing director of CBRE | WTW, said that this is a commendable effort to maximise land use in urban areas through higher density development rather than opening up more land for development, in line with the ESG initiative.

However, he told the Business Times that Article 13 should be amended and a clear and transparent process established to allow any en bloc sale.

"There are some old and aged strata developments in city centres where the lands possess higher and better use as compared to the existing buildings erected thereon, and the buildings might be in a poor state of repair due to inadequate maintenance and sinking funds.

"The majority of owners may prefer to sell their units en bloc in order to monetise their old strata units and/or use the proceeds to purchase a new home. Let the people decide," he said.

Source: https://www.nst.com.my/property/2023/10/967528/hba-says-its-shame-reduce-consent-threshold-strata-property-redevelopment

The RTS and Coronation Square are major drivers of the Iskandar property market

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

Aerial view of Johor Bahru City. NST/File Photo

KUALA LUMPUR: The Iskandar Malaysia real estate market is optimistic, owing to major developments in Johor and Singapore, particularly the Rapid Transit System (RTS) link.

  The RTS link project is a four-kilometre-long railway shuttle link with two stations, one in Bukit Chagar, Johor Bahru, and one in Woodlands, Singapore.

  The link will serve as a catalyst for the continued development of Johor Bahru and its surrounding areas. It will increase the value of property in southern Johor.

  Malaysia Rapid Transit System Sdn Bhd is the developer and owner of the civil infrastructure for the RTS Link's Malaysian section, which is scheduled to open in 2026.

  According to RHB Investment Bank Research (RHB IB), Singapore dollar-driven consumer spending power is expected to have a positive long-term spillover effect on retail, hospitality, and real estate players further out from the city centre.

  It believes that projects near the RTS will continue to be in high demand.

The RTS link project is a 4KM-long railway shuttle link with two stations, one in Bukit Chagar, Johor Bahru, and one in Woodlands, Singapore. Pix credit: www.mymrt.com.my

  According to RHB IB, a few Airbnb operators have also indicated that occupancy rates for the units under management have increased from 70 per cent to 80 per cent on average year to date.

  "Based on our conversations with locals there, we learned that the number of visitors from Singapore rose significantly, especially after the post-pandemic re-opening of the Singapore-Malaysia border in April 2022. 

  "Besides grocery shopping, areas of major spending include food and beverage, wellness and beauty, and car maintenance. Interestingly, property agents are receiving an increasing number of queries from potential Singapore buyers," said the firm in its recent sector update.

  "We also learned that monthly rental rates for certain condominiums in the city centre started rising to RM5,000 per unit from RM2,500 when borders reopened—to levels on par with rental rates in Kuala Lumpur's city centre," it added.

  RHB IB cited examples of two projects in Johor Bahru—W City @ JGCC by WCT Land and Coronation Square—that have seen strong interest from property investors and owner occupiers.

  The first phase of the W City @ JGCC project, just a 10-minute drive away (7km) from the RTS station at Bukit Chagar, will make its debut in one to two months, it said.

  With an average selling price (ASP) of RM900 per square foot (psf), which is before the discount, the project developer has obtained government approval to sell units priced above RM400,000 to foreigners. 

  "We think it will be able to garner strong interest from local and international buyers, given its concept, layout, and, more importantly, short distance to the RTS," RHB IB said.

  As for Coronation Square, RHB IB noted that the second residential block in the project, which is the closest to the RTS station with a 300-metre skybridge, will be launched soon. 

  "The first block is already 80 per cent booked, with 60 per cent of the sale and purchase agreements signed. Compared with an ASP of RM1,200 psf for the first tower, the second tower will likely be priced at RM1,300 to RM1,350 psf. 

  "As for the residential component to be developed by MTR Corp, the ASP is expected to be around RM1,800 psf upon the launch of the project as it will be integrated with the RTS terminal and the customs, immigration, and quarantine (CIQ) complex," it said.

  The RM5 billion Coronation Square is the first project to kick-start the Ibrahim International Business District (IIBD), which is the catalyst of the state's transformation plan to turn Johor Bahru into a world-class metropolis.

  Scheduled for full completion by 2028, Coronation Square features a mall and six towers comprising two blocks of serviced apartments, two office blocks, a hotel, and medical suites.

  Two of the six towers, comprising a 30-storey building to KPJ Healthcare Bhd and a 35-storey block to Bank Rakyat, have been sold for more than RM1,000 psf each.

  It was reported that the KPJ Healthcare tower will be ready by the middle of next year, while Bank Rakyat will occupy 29 levels of Menara Bank Rakyat.

The four-star hotel, to be operated by Wyndham Group, will be housed in a 32-storey tower and will have 250 to 300 rooms.

Source: https://www.nst.com.my/property/2023/10/965751/rts-and-coronation-square-are-major-drivers-iskandar-property-market

Gadang sees bright future

 By Business Times/ Sharen Kaur - October 11, 2023

Electromechanical Equipment , 9MW Mini Hydro Power Plant.

KUALA LUMPUR: Gadang Holdings Bhd is expected to chart stronger years ahead thanks to the expansion of its renewable energy division.

The commercial operation date (COD) for the company's 5.9 megawatt (MW) solar photovoltaic energy generating facility in Tawau, Sabah is scheduled for June 30 next year, according to subsidiary Regional Utilities Sdn Bhd managing director Foo Mieng Yong.

The facility is 45 per cent complete as of August 31 this year.

He said once completed, the facility will be linked to Sabah Electricity Sdn Bhd's (SESB) medium voltage distribution network in PPU Sri Indah, providing Gadang with long-term earnings visibility.

In a strategic move to diversify the division's renewable energy generation portfolio, Gadang's 70 per cent-owned Nusantara Suriamas Sdn Bhd secured a power purchase agreement (PPA) with SESB for a large-scale solar power plant photovoltaic (LSSPV) in December 2021.

The PPA governs the obligations of Nusantara and SESB to sell and purchase the energy generated by the facility for 21 years from the COD.

In Indonesia, Gadang has commenced full commercial operation of its 9MW mini hydropower plant in Lintau, Tanah Datar, in West Sumatera.

Foo said the second 4.5 MW run-of-river hydropower house unit of the plant was synced with the state-owned utility firm Perusahaan Listrik Negara (PLN) distribution grid system in Balai Tangah, Lintau Buo, on Sept 27.

The first 4.5 MW run-of-river hydro unit was synchronised to the PLN grid via a 4km overhead 20 kV transmission line after testing and commissioning were completed this year. The unit's COD was on July 7.

"The 9 MW mini hydropower plant is now generating a recurring revenue stream under a 15-year concession agreement," Foo said.

He said the plant, which uses water energy from the Batang Sinamar river upstream, has been meeting the PPA's requirements for PLN energy output. 

Gadang entered the hydropower industry in West Sumatra in June 2014 when it acquired a 60 per cent stake in PT Ikhwan Mega Power, the company in charge of the 9 MW hydropower concession.

Asian Utilities Private & Ltd, a wholly-owned subsidiary of Regional Utilities, owns 60 per cent of PT Ikhwan. The remaining 40 per cent equity is held by local investors.

The hydropower plant is constructed using the build, operate, and own concept, based on a 15-year concessionaire PPA agreed between PT Ikhwan and PLN.

TA Research said in August that it was maintaining Gadang's fiscal year 2024 and 2025 earnings forecasts and had introduced a financial year 2026 earnings forecast of RM25.7 million, representing an earnings growth of 7.9 per cent.

The brokerage said Gadang's outstanding construction order book, which stood at RM1.2 billion, could provide earnings visibility to the company at least for the next two years.

Excluding a RM10.6 million impairment loss on goodwill, a RM9.4 million impairment loss on concession, a RM7.2 million impairment loss on outstanding receivables and contract assets, and unrealised gain on foreign exchange of RM2.1 million, as well as other exceptional net losses of RM1.5 million, Gadang reported a FY23 core net loss of RM2.7 million.

Source: https://www.nst.com.my/property/2023/10/965600/gadang-sees-bright-future

The sale of Oxley's Grade A office tower to Alliance Bank a strategic move

 By NST Property/ Sharen Kaur - October 10, 2023 

Image credit: oxleytowers.com.my

sharen@nst.com.my

KUALA LUMPUR: Oxley Holdings Ltd's proposed sale of its Grade A office tower at Oxley Towers KLCC in Jalan Ampang to Alliance Bank Malaysia Bhd for RM405.84 million is a strategic move, according to market insiders.

  "At least, Oxley doesn't have to worry about leasing the office spaces to many different tenants given the current market conditions or finding the right property manager," a market insider told NST Property under the condition of anonymity.

He said that while it may not be the best price for Oxley, given the bare office units (with minimal finishing) and the large total purchase area, the developer would still make some money.

  "If the price includes the duplex units, then the sale would translate to RM1247 per square foot (psf), and RM1,285 psf if it excludes the duplex units, which is still a fair price given the current weak market sentiments," he said.

 Oxley Towers KLCC is spread across a 3.11-acre plot that Oxley purchased in 2014 for RM446.7 million. 

 The multi-billion ringgit development includes two hotel towers with residences, the office tower, and a two-storey retail podium that connects all three towers. It's right next to the famous Petronas Twin Towers.

According to Oxley's official website, the hotel towers with residences will be the world's first SO/ KL Residences, and Malaysia's first SO/ Sofitel, a French-style luxury hotel.

Alliance Bank is buying the office tower and four adjoining retail lots, which include two duplex units on the first floor and two units on the ground floor of the retail podium, for a total floor area of 9,569 square feet.

  It has entered into a Sale and Purchase Agreement with Oxley Rising Sdn Bhd for the acquisition.

  According to Oxley's Singapore stock exchange filing yesterday, the 24 floors of the strata-titled office run from Levels 6 to 29 and have a gross floor area of 315,711 sq ft. 

  The property will be granted a temporary occupation permit in 2024.

  Alliance Bank said in a Bursa Malaysia filing on Monday that it plans to relocate its corporate office to the Oxley tower, which will improve its visibility and branding due to the properties' strategic location in KLCC's commercial centre.

  "The properties are earmarked as green-certified buildings, and this will form part of the bank's sustainability journey to be a more sustainable and resilient organisation," it explained.

  The office tower is scheduled to be completed by the end of November 2024, which is also when the acquisition will be completed. 

  Alliance Bank's registered corporate head office is currently located at Menara Multi-Purpose, Capital Square, Jalan Munshi Abdullah, Kuala Lumpur.

Source: https://www.nst.com.my/property/2023/10/965389/sale-oxleys-grade-office-tower-alliance-bank-strategic-move

"Toxicity Kills" - A short video presentation by the New Straits Times talent group

Toxic workplaces make employees sick, scared, and desperate to leave. 

Organisations should foster a culture of respect and safety, and leaders should be evaluated based on their adherence to these value

A short video by the New Straits Times' talent goup on "Toxicity Kills"..

Please support by watching the video, clicking like and adding your comment.

YTL: Riding the data centre wave

 By Business Times/Sharen Kaur - October 5, 2023 

Malaysia is quickly becoming a regional data centre and an appealing investment destination.

bt@nst.com.my

KUALA LUMPUR: Malaysia is quickly becoming a regional data centre and an appealing investment destination.

This is a result of increased digital infrastructure expenditure such as cable landing stations, underwater cables, 5G and improved fibre connectivity, according to YTL Corp Bhd executive chairman Tan Sri Francis Yeoh.

According to an April research report from real estate consultancy Knight Frank, Malaysia was the top investment destination for data centre investment last year, with 113 megawatts (MW) of take-up (the second-highest was Thailand with 25MW).

This is largely due to government-backed initiatives and land constraints in Singapore, which is a regional data centre hub.

There is also fervent demand from cloud service giants such as Amazon Web Services, which announced a US$6 billion investment in Malaysia by 2037 to strengthen its cloud service infrastructure in the country.

Yeoh said Malaysia is in a very good position to be a leader in both the data centre and the green energy space.

"Data centres are in high demand globally. Malaysia is blessed with an abundance of land and talent to harness this vital digital infrastructure. Besides, it is a great economic multiplier.

"We are looking to build on the data centre boom as a new engine of growth. For us, data centres are a very important business. But data centres have to be fuelled by green energy, and this is something we can do," Yeoh told Business Times.

To meet the needs of the group's mobile telco unit, YTL built its first data centre, a 5MW facility in Kuala Lumpur 14 years ago.

In 2021, YTL Data Centres, a newly established arm of the group's listed YTL Power International, expanded into Singapore, paying S$200 million for a 50 per cent stake in a second 12.5MW site.

The game-changer, however, is the construction of a RM15 billion data centre park in Kulai, Johor that could provide up to 500MW of capacity, co-powered by a solar farm on an adjacent plot.

The massive 664-hectare solar-powered data centre park will see the first phase of 72MW going online in early 2024.

Yeoh believes that entering the market on a large scale at this stage is well-timed and that it has given YTL group the opportunity to anchor the business from the start on renewable energy, which could put it well ahead of the pack as companies pursue net zero carbon emission policies.

"YTL is a physical infrastructure developer, and now we are layering this with the digital infrastructure business. We have been building and owning physical infrastructure businesses like power generation and distribution, green energy, water and sewage treatment, express rail and real estate.

"Now we are adding a layer of revenue with digital infrastructure businesses like 5G data communications, digital bank and data centres," he said.

This will augur well for YTL's sustainable revenues into the immediate and distant future.

"We are blessed as our present generation and our next generation of leaders within the YTL group are competent engineers who are very well versed in both the physical and digital infrastructure businesses," Yeoh added.

Source: https://www.nst.com.my/business/2023/10/963188/riding-data-centre-wave

Lim: LBS's Budget 2024 wishlist to stimulate the real estate market

 By NST Property/Sharen Kaur - October 3, 2023

Tan Sri Lim Hock San

sharen@nst.com.my

KUALA LUMPUR: LBS Bina Group Bhd hoped that the government would consider encouraging urban development through infrastructure development.

  According to Tan Sri Lim Hock San, the company's executive chairman, sustainable urban growth is a key goal for many governments around the world.

 "Infrastructure development is a cornerstone of this objective, as it directly impacts the quality of life for urban residents and the long-term viability of cities.

  "With this, we recommend the government provide incentives to developers in order for them to incorporate smart technologies into their projects, such as energy-efficient building systems, smart grids, waste management solutions, and intelligent traffic management systems," he said in his company's wish list for Budget 2024.

  Lim said that LBS is optimistic that Budget 2024, which will be tabled in Parliament on October 13, will bring about a significant change and positively influence property market sentiment through the implementation of stimulus packages. 

  He said that the government has an opportunity with this budget to assist the general public in addressing everyday challenges, particularly those related to homeownership.

  The formation of a unity government is expected to create an environment that will attract more investors, foster economic growth, and improve the population's overall well-being, he added.

  "We eagerly anticipate the government's commitment to ensuring the availability of adequate, high-quality, and affordable housing options, allowing more people to realise their dream of owning a home. 

  "Furthermore, building on our sales target of RM2 billion for 2023, we are optimistic that the government will introduce initiatives that will further support our ongoing projects. We are looking forward to witnessing a robust recovery in the property market," he said.

  The revival of the Home Ownership Campaign (HOC), incentives for the adoption of the Industrialised Building System (IBS) precast system, strengthening environmental incentives for developers, and lowering compliance costs are also key points on the wishlist.

  Lim said that LBS prioritises affordability in all of its projects as a people's developer. 

  Nonetheless, compliance costs, such as development charges, land conversion premiums, and strata title application fees, have risen. 

  According to Lim, developers and contractors are frequently forced to pass on these costs to consumers in the form of higher property prices. 

  "Given the current economic climate, we kindly request that the government consider imposing limits or reducing compliance costs associated with the development of a property," he said.

  Lim also said that, despite the current inflationary challenges, the cost of essential items such as housing has risen. 

  He suggested that the government investigate additional measures to alleviate the financial strain on the public, particularly those aspiring to become first-time homeowners.   

  "Specifically, we propose the reinstatement of the HOC. The HOC's effectiveness during its previous run from 2019 to 2021 is well documented. Therefore, reintroducing it would stimulate demand, promote homeownership, and expand choices and affordability for prospective buyers," he said.

  Lim said the government should also consider providing special incentives or subsidies for developers who incorporate the IBS precast system into their housing projects, as this can help reduce construction costs and make housing more accessible. 

  These short-term incentives can pave the way for the widespread adoption of IBS precast systems in the property sector.

  The ultimate goal is to achieve higher construction efficiency, cost-effectiveness, and sustainability while maintaining or improving overall construction quality, he said.

  Further, he said that the government should continue to support and expand green building development and consider providing grants to developers to encourage industry players to incorporate more green features into their developments, such as the use of renewable energy sources, including solar panels. 

  In addition, financing support for green financing with lower interest rates should also be considered, he said.

  "With the increasing global interest in sustainable and green buildings, the capital expenditure to design and develop sustainable and carbon-neutral buildings can be an added cost to local developers, especially when it can be higher than conventional buildings," Lim said.

 

Source: https://www.nst.com.my/property/2023/10/962398/lim-lbss-budget-2024-wishlist-stimulate-real-estate-market

Kwasa Damansara set to become a new growth centre in Selangor

 By NST Property/Kathy B. - October 3, 2023 

The Kwasa Damansara township is located on land previously owned by the Rubber Research Institute. Image credit: www.kwasadamansara.com.my

KUALA LUMPUR: Is the 2,620-acre Kwasa Damansara township ramping up after a few quiet years as a result of the pandemic?

Except for the Employees Provident Fund's (EPF) new headquarters, the Green Building Index Platinum-rated EPF Tower, which was completed in June last year, no significant developments in Kwasa Damansara have been reported in recent years.

The 12-storey EPF Tower was inaugurated in May of this year by Prime Minister Datuk Seri Anwar Ibrahim.

According to Sr. Anthony Chua, executive director of KGV International Property Consultants, Kwasa Damansara is set to become a new growth centre in Selangor.

"It is expected to surpass the adjoining Kota Damansara, which was successfully transformed into a modern, thriving township, but that expectation has faded as not much development news has emerged recently. 

"The developments that were planned are targeted for high-end; hence, the developers may have held back in light of the challenging post-pandemic market," he told NST Property.

However, Chua said there is no doubt that Kwasa Damansara has the ingredients to succeed, as its master plan is infused with various infrastructure, green components, excellent connectivity with two MRT stations, and the recent linkage to the DASH Highway via the RRIM (Kwasa Damansara) Interchange.

The Employees Provident Fund's new headquarters, EPF Tower, which was inaugurated in May of this year by Prime Minister Datuk Seri Anwar Ibrahim.

The EPF's wholly-owned subsidiary, Kwasa Land Sdn Bhd, is the master developer of the Kwasa Damansara township, which is located on land previously owned by the Rubber Research Institute in 2010.

The township occupies a total land area of about 1,064 hectares, comprising both freehold and leasehold.

According to reports, Kwasa Land completed the purchase of the site in 2012 for RM2.28 billion.

Datuk Adenan Md Yusof, managing director of Kwasa Land, reportedly said in April that the township will see increased activity by the middle of this year when developers begin to launch their projects.

According to him, the gross development value (GDV) of Kwasa Damansara is estimated to be between RM50 billion and RM60 billion. 

Kwasa Damansara will take between 20 and 25 years to complete. The area is expected to serve 200,000 residents and provide 100,000 job opportunities once completed.

YTL Corp Bhd, MRCB Land Sdn Bhd, Gadang Holdings Bhd, TSR Capital Bhd, Gagasan Nadi Cergas Bhd, Impiana Land & Development Sdn Bhd, and Exsim Group are among the developers at Kwasa Damansara.

MRCB Land Sdn Bhd will launch its first residential project in Kwasa Damansara City Centre (KDCC) called Tujuh Residences.

New launches in Kwasa Damansara

Gadang's unit, Elegance Sonata Sdn Bhd, was awarded the development rights to a 21.08-acre plot known as R3-1 within the township in 2017.

According to Yu Kang Huai, managing director of Gadang Land Sdn Bhd, the company will launch Laman Waringin at the site next year.

He told NST Property that the proposed development, with an estimated GDV of RM707 million, will include 152 units of double-storey terrace homes and 668 units of condominiums.

"Earthworks have been underway since February 2023. Last month, we also began construction on our sales gallery and show unit," he said.

Yu said that Gadang Land planned to launch Laman Waringin in September 2024 and that the project would take six years to complete.

Meanwhile, MRCB Land announced last week that it will launch Tujuh Residences, its first residential project in Kwasa Damansara City Centre (KDCC).

Tujuh Residences is a 29-storey development with 573 serviced residences ranging from one to three bedrooms and dual-key units and a GDV of RM384 million.

Tujuh Residences, according to Malaysian Resources Corp Bhd group chief operating officer Kwan Joon Hoe, is poised for high capital growth as KDCC development progresses in the coming years.

"Our experience in developing Kuala Lumpur Sentral and the data depicted from other city centre developments show that commercial developments drive the success of any Central Business District (CBD).

"KDCC, being the new CBD of the Kwasa Damansara township, will be no exception, as 56 per cent of the entire development is dedicated to commercial development, with only 13 per cent of the entire city centre earmarked for residential components," he said.

Source: https://www.nst.com.my/property/2023/10/962443/kwasa-damansara-set-become-new-growth-centre-selangor

Industrial property demand could exceed RM13bil per year

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

KUALA LUMPUR: The industrial property market in Malaysia could exceed RM13 billion per year in terms of demand, particularly in Johor, creating numerous opportunities for developers to gain market share.

  According to UBS, its recent Johor site visit revealed a strong pipeline of incoming foreign direct investments (FDI), supporting its estimate of a six to ten per cent compounded annual growth rate (CAGR) for industrial property transactions from fiscal years 2021 to 2030. 

  It said that, despite concerns about an overly ambitious target, past data suggest a nearly twofold increase in FDI and domestic direct investment (DDI), implying six to ten per cent growth in the coming years.

  "Contrary to investors' concerns, our analysis of industry dynamics points to low risks of oversupply. From our trip, mature industrial parks near Senai are seeing strong interest from both multinational companies and SMEs. For Johor, industrial parks are not distinguished by a particular sector concentration but are better categorised by light, medium, and heavy industries. Hence, such parks can fill up quickly. 

  "Overall, we think industrial lands that are connected to transport hubs (particularly near Senai and Pasir Gudang Port in Johor's north and east) are becoming scarcer. Although publicly listed developers' industrial landbanks are spread out over a sizeable 2,500 acres, this is smaller when going down to specific markets.

  "On the supply front, developers have low industrial landbank holdings. Industrial areas around transport nodes are largely built up (experiencing limited vacancy), while developers are taking a measured approach towards large-scale change of use towards industrial," UBS said in a recent note.

  According to UBS, developers and the Iskandar Regional Development Authority (IRDA) are optimistic about upcoming direct investments, with strong interest from China, Singapore, the United States, and Europe in data centres, manufacturing, and logistics.

  To name a few key drivers, it said that physical and digital connectivity to Singapore and its ports serve as a springboard for investments into Johor, which is aided by the availability of land and utility infrastructure. 

  While it may be an advantageous time for agricultural landowners to extract value from their lands, UBS believes that conversations with key landowners in Johor, such as Johor Corporation, indicate that prime industrial lands near connectivity nodes (along major highways) will likely be retained, thereby mitigating the supply profile.

  However, it believes that significant land can be gained from land conversion to industry, particularly in Iskandar Puteri in the west. 

  Master developers like UEM Sunrise Bhd, which has over 2,000 acres in Gerbang Nusajaya, and Sunway Bhd are looking to change the mix of such townships to a higher industrial mix. 

  "However, we think this should be seen in the context of potential end-users' scale," UBS said.

  Eco World Development Group Bhd (EcoWorld), as one of Malaysia's leading industrial players, may greatly benefit from the Johor industrial market. 

  The company's undeveloped landbank was approximately 3,413 acres as of August 2023, with a remaining gross development value (GDV) of RM56 billion.

  Historically, its industrial presence has been concentrated in Johor and central Malaysia. Its product offerings are industrial lots (customizable factories) measuring about one acre, with the possibility of site amalgamation for large users.

  EcoWorld recently replenished its industrial landbank in Johor, demonstrating its ability to source land. 

  "EcoWorld has the leverage to pursue further industrial land deals. The developer scored a significant 92-acre land deal with Haitian in early 2023. I recently purchased a landbank in Johor at RM12 per square foot, which is close to the market rate, and that has the potential for data centre uses," UBS said.

Mah Sing Group Bhd’s i-Parc industrial development in Johor

  Mah Sing Group Bhd is also a major player in the industrial property market in Johor. It has previously taken part in its i-Parc industrial projects. 

  The plan is to participate in the future through a joint venture with South Sea Capital, with its partner sharing local contacts from mainland China. 

  According to UBS, Mah Sing will concentrate on acquiring suitable landbanks and developing industrial properties.

  "We think Mah Sing's asset-light approach is a safe way of expanding and playing the industrial theme. It has demonstrated a track record of quick turnaround landbanking within residential," it said.

  As of June 2023, Mah Sing had over 2,333 acres of undeveloped land, with a remaining GDV of RM24.5 billion.

  Meanwhile, UBS believes that SP Setia Bhd is well positioned to capitalise on the industrialisation theme in Johor.

  SP Setia has exposure through business parks, but its primary exposure will be through three major industrial land plots earmarked for monetisation, totaling nearly 967 acres.  

  "We estimate this could amount to RM0.5 billion in monetisable land proceeds. We think SP Setia could benefit from its industrial presence across Malaysia. High leverage was a previous concern, but we think that accelerated monetization of land banks can help to deleverage ahead," it said.

  SP Setia is in the process of converting land zoning to industrial at Setia Fontaines Industrial Park in Penang (260 acres), Setia Alaman in Klang (399 acres), and Tanjung Kupang in Johor (308 acres).

Source: https://www.nst.com.my/property/2023/10/963391/industrial-property-demand-could-exceed-rm13bil-year