China to maintain curbs on property market

BEIJING: China will maintain restrictions on the property market, vice-premier Li Keqiang has said, despite growing speculation that curbs could be eased to prevent a damaging slump in prices. Real estate sales and prices have been falling nationwide due to tough restrictions on purchases and bank lending, fuelling fears that the market could collapse and send debt-laden property developers to the wall. China’s property market was “in a key stage” and restrictions needed to stay in place to “promote the healthy development” of the sector, the official Xinhua news agency quoted Li as saying on Sunday. “We must maintain policies to prevent property prices from rising overly fast and further consolidate the results of the controls,” Li said. China has introduced a range of measures aimed at bringing down property prices the last year, such as bans on buying second homes in some cities, hiking minimum down-payments for buyers and introducing property taxes. A surge in bank lending in recent years has fuelled investment in the real estate sector and pushed property prices out of the reach of many ordinary Chinese, angering people struggling to buy their first home. The government would maintain restrictions and step up construction of low-cost housing to “satisfy the multiple and diversified housing needs of the public,” Li said. Li’s remarks echoed those of Chinese Premier Wen Jiabao, who recently said house prices should return to “reasonable levels” before policies were eased. Renmin University in Beijing said last week it expected the government to relax some property market curbs next year due to concerns that slumping prices could hurt growth in the world’s second largest economy. Cash-strapped local governments were heavily reliant on revenue from land sales, and the central government would likely intervene to prevent property prices from falling more than 25%, it said in a report. Property investment was also a contributor to economic growth, so Beijing might act to help ensure gross domestic product growth – which creates jobs and prevents social unrest – remained strong, it said. Official data showed the number of major Chinese cities posting a drop in home prices doubled to 34 in October from September, in a sign efforts to cool the country’s surging property market are working. — AFP

Kobay may privatise subsidiary Lipo

PETALING JAYA: Kobay Technology Bhd, the parent company of Lipo Corp Bhd, is considering an exercise to privatise the latter, according to reliable sources. The industry sources pointed to the fact that Kobay already owned 53.16% of Lipo, was cash-rich and Lipo was trading at a significant discount to its net tangible asset (NTA) value of RM1.60. It is understood that the advisory services of an investment bank has already been sought for the proposed deal although it is not clear which bank is involved. Both Kobay and Lipo are Penang-based companies involved in the manufacture of precision engineering equipment, although as of late last year, Lipo had ventured into property development. The Kobay-Lipo group is 26% owned by the Koay brothers Datuk Koay Hean Eng, Koay Cheng Lye and Koay Ah Bah. Hean Eng and Cheng Lye are common directors of Kobay and Lipo. Kobay's management was unavailable for comment. “Kobay is taking the cue from the flurry of privatisations that has taken place on Bursa Malaysia, stemming largely from the undervalued nature of the assets,” said a source. Kobay has more than RM60mil in cash and cash equivalents, which means that funding the privatisation should not be a problem. It will cost Kobay some RM27mil to buy back all the shares in Lipo it does not own at current prices or slightly over that if it is going to pay a premium to market. Lipo itself has a clean balance sheet, with RM28mil in cash and cash equivalents and with very little borrowings. Its venture into property development in Penang started last year when it bought nine lots of freehold land measuring a total of 47,679 sq ft in Tanjung Bungah for RM6.88mil or about RM144.30 per sq ft. It then said the plan was to develop that into residential and commercial properties. Lipo had also told shareholders then that the expansion into property development was a diversification strategy to help it move away from depending solely on the existing precision component manufacturing business, which was cyclical. The management of Lipo and Kobay had then declined to elaborate on the property development venture. Lipo's earnings fell to RM1.6mil in its latest quarter ended Sept 30, 2011, from RM2.7mil earlier due mostly to unfavourable performance of its China segment as result of the change of sales mix of overseas precision components and the loss incurred by the setup of a subsidiary in China. Since Kobay increased its shareholding in Lipo last December, Lipo's share price has risen by some 80% to RM1.14 per share last Friday. - The Star

To better serve women

THE Women’s Centre for Change (WCC) Penang is still short of RM1.5mil of its fundraising goal for its new premises on Burmah Road, George Town. Its president Mariam Lim said the total target was RM2.5mil to cover the building cost of RM1.5mil and the renovation cost of up to RM1mil. “To date, we have raised a total of RM1mil, which is 40% of the target,” she said. “We hope the public can support us with donations, as the new building is aimed at providing better facilities for single mothers, children and youth.” Lim said the three-storey building on Burmah Road had been vacant for a few years and required renovation. “The building, covering a 5,000sq ft built-in area, will give the centre more space for counselling services, seminars and training activities,” she said. “We are planning to rent out the ground floor which covers 1,500sq ft with an offered price of RM5,500 per month. “The rental is negotiable. This is aimed at generating income for the centre.” Lim was delivering her speech during the soft launch of WCC’s building fund themed ‘Give, Build, Change’ at the Little Penang Street Market on Sunday. The launching ceremony was kicked off with a live singing performance by Jazz singer Dasha Loganathan. Also present were Bukit Mertajam MP Chong Eng and state Youth and Sports, Women, Family and Community Development chairman Lydia Ong Kok Fooi. For details or to make a donation, call 04-2280342 or visit www.wccpenang.org/givebuildchange. Tax-exempted receipts will be issued for those who donate at least RM50. - The Star

Resort lifestyle of condo a draw for westerners, says developer

CAUCASIANS comprise the bulk of those purchasing the RM255mil Infinity Beachfront Condominium that recently clinched the FIABCI Malaysia Property Award 2011 under the residential (high rise) category. Hunza Properties Berhad executive chairman Datuk Khor Teng Tong said the project attracted Caucasians because it had access to a 105m-long beachfront as well as a 136m-long river frontage. “Beachfront accessibility is a key attraction for Caucasians as they prefer a beach resort lifestyle. “While the project was still under construction in 2008, we adopted Sungai Kelian to beautify and maintain its cleanliness for the long term. “Hunza and the FIABCI Penang Branch used the effective microorganism (EM) biotechnology to clean the river. It is now free of sludge and its water clearer,” Khor said. “The Caucasians, forming about 65% of the buyers, are from countries such as Britain, the United States, Australia, Belgium, Switzerland and Canada,” he said. He said other foreign buyers came from countries such as Vietnam, Hong Kong, Indonesia, Korea, Macau and Singapore. Khor also said the company’s RM480mil Gurney Paragon condominium project attracted many purchasers from Singapore, Indonesia, Hong Kong, Korea and Macau as the project was close to shopping malls and lifestyle facilities. He said this at a recent cocktail event in Penang to celebrate Infinity’s FIABCI award win. The event was attended by business partners of the project and corporate leaders. The project, comprising 119 condominiums units and penthouses, obtained the certificate of fitness (CF) in 2010. It is all sold out except for four of the eight penthouses. Initiated 19 years ago, the FIABCI Malaysia Property Award invites the best projects in Malaysia to contest in various categories. The winning projects this year will represent Malaysia in the international competition FIABCI Prix d’ Excellence awards which will be held in St Petersburg, Russia, in May next year. FIABCI is the acronym for Federation Internationale des Administrateurs de Bien-Conselis Immobiliers (International Real Estate Federation). - The Star

Influx of office space in Klang Valley worsens oversupply situation

KUALA LUMPUR: An influx of office space in the Klang Valley is putting a downward pressure on yields. Property consultants said the entry of more office space was making the oversupply situation worse. However, they said the situation could be remedied should the economy perform better, thus keeping demand afloat. “In certain areas, yields will be pressured downward because of the glut situation. But this is also highly dependent on the location of the offices. Those located in prime areas will have less chance of coming under yield pressure,” DTZ Debenham Tie Lung executive director Brian Koh told StarBiz. Khong & Jaafar managing director Elvin Fernandez said that the slightly higher vacancies this time around was “not too abnormal a situation”. “The thing about property cycle is that there can be a glut today but this oversupply condition can be offset if demand returns. I do not view it as being serious, “However, there could be a lot more supply that would flood the office space sector in the medium to long term,” he said. There were 20 million sq ft of vacant space in the Klang Valley, 22.5 million sq ft of office space under construction and 25 million sq ft which had been approved for construction. The Government recently earmarked several areas for commercial development such as the KL International Financial District in Jalan Tun Razak, the 100-storey Warisan Merdeka, the Sungai Besi military airport and the Rubber Research Institute land in Sungai Buloh which are expected to come onstream within the next 10 years. Meanwhile, a report by CB Richard Ellis released earlier this month revealed that office yields in Kuala Lumpur prime area had been flat from 2005 until 2011, ranging from a low of 6.25% to a high of 6.75% (see chart). The report also showed the office space vacancy rate in the Klang Valley was under 13% on an average basis, which consultants said could rise once new space came in with the completion of several mega projects. “With all the large-scale development projects coming in, we are looking at a potential oversupply situation but if the economy does exceptionally well despite the problems in the eurozone, this problem would ebb,” said Koh. Vacancies had risen during the 2008 global financial crisis in prime office spaces and rental rates had been on a slight decline. The prevalent trend among corporates was to move their bases away from the city centre into newer office buildings within other established suburbs such as Petaling Jaya and Klang as many of the workers lived in these suburbs. “After the My Rail Transit has been completed, office development would focus back to the city centre as long as they are affordable and corporates can make a decent profit even after paying off these leases. I expect this trend to reverse and that Kuala Lumpur will remain at the primacy of development in the Klang Valley,” Fernandez said. - The Star

‘Home is where heart must be at peace’

KUALA LUMPUR: Since ancient times, shelter has been the basic need of every human and the home is regarded a sacred space because it comforts, inspires and heals the body, mind and spirit. Columnist and author T. Selva shared this philosophy and knowledge of the 5,000-year-old Vasthu Sastra the Indian art of geomancy with visitors to The Star Property Fair, which reached its finale at the Kuala Lumpur Convention Centre here yesterday. “The ancient science, which can be applied in modern times to achieve a balance with cosmic forces, can assure harmonious living. Positive feedback: Selva giving out the ‘Vasthu’ pyramids to lucky recipients after his talk at the property fair at the KL Convention Centre in Kuala Lumpur Sunday. “One has to be tuned in with the universal rhythm of certain creations in seeking peace and prosperity,” he said, explaining that Vasthu Sastra was not just about a piece of land but something “that starts from oneself from the moment he wakes till he goes back to sleep”. Selva emphasised on the five elements of nature (ether, air, fire, water and earth) and the corresponding five senses in a person (hearing, smell, sight, taste and touch). “When working or living in a building or property, a person is to respect the five elements, which must be present around the individual,” he said. He explained: “Ether and hearing: one is encouraged to listen to soothing music early in the morning, not disturbing noises or loud music. “Air and smell: the burning of fragrant incense or uplifting scents purify the air and allow fresh air to flow into the house. “Fire and sight: watch the sunrise and allow the morning sun into the house to have a good headstart. “Water and taste: have an indoor fountain in the northeast space of the room to be in harmony with the water element. “Earth and the sense of touch: allow your bare feet to touch the ground to discharge and recharge your body with positive earth energies. Selva, who put up Vasthu Sastra guide books for sale, also gave away 100 mini-pyramids, imported from India, to lucky visitors and explained how they drew subtle positive energy. He said one of the pyramid's functions was to remove or recycle stagnated and negative energy and focus on harmonising energies instead.-The Star

Australian homes on show at fair

KUALA LUMPUR: House buyers and property seekers continued to make a beeline to The Star Property Fair, Malaysia's premier showcase for stylish living, at the Kuala Lumpur Convention Centre here. They not only got to check out on the latest offers by local developers but also useful tips on buying and managing property in Australia. Anthony Phey, senior manager and consultant of Central Equity, a leading inner-city residential developer in Melbourne, said: “If it's your first investment, make sure you are doing it right because what you will be spending is your hard-earned money. “Buying a property in Australia is a great investment due to the economic factor, job opportunities and world-quality lifestyle. Spoilt for choice: Potential housebuyers visiting the booths at The Star Property Fair 2011 at the Kuala Lumpur Convention Centre yesterday. “The Australian Government allows foreign ownership but with the proper documents and certain criteria,” he said. Phey was met during a one-hour talk on the second day of the fair yesterday. The fair at Halls 4 and 5 of the convention centre ends today. Award-winning interior designer Benson Saw gave an interesting insight into selecting the right furniture for the home. “We should break the convention and be creative. It does not mean you can place a sofa in your living only but in your bedroom too.” “Use the space well because when you invest a lot on a property you should consider investing in good and quality furniture too,” he said, spicing his talk with images of well-decorated homes. “Lighting plays an important role too,” added Saw. David Koh from the Malaysian Institute of Geomancy Sciences presented interesting tips on how to enhance the living environment with “environology” a new word he coined to mean feng shui. “Those buying property should know the type of energy in their house as ancient living styles are still applicable in modern life,” said Koh. - The Star

槟威海底隧道及3道路 中韩马竞标2015动工

槟城25日讯）估计总造价高达80亿令吉的槟威海底隧道及3条主要道路兴建工程，根据州政府拟定的招标及施工日程表，最快要在2015年中才能动工。 州政府秘书署经于本月15日通过州政府官方网站让有兴趣竞标这项工程的本地及外国公司下载资格鉴定申请书。 据悉，除了已经和州政府签署谅解备忘录的中国公司，目前最少还有一家韩国跨国公司及多家本地公司已经表达他们要争取这项工程的意愿。 根据州政府的规定，任何有意参与竞标的公司，必须出席11月29日举行的资格鉴定说明会。没有出席的公司将自动失去竞标资格。 没出席说明会不能投标 槟州公共工程、基本设施及交通管理委员会主席林峰成受询时说，没有代表出席说明会的公司，将不能投标这项工程，除非行政议会决定再另外举行多一场说明会。 因此他吁请有意投标有关工程的公司不要错过这次的资格鉴定及说明会。 他说，州政府目标是希望能有多家公司参与。 根据州政府的资格鉴定申请书列明的工程日程表，有意竞逐这项工程的公司必须在2012年1月14日前提呈他们的申请书，通过资格鉴定后，必须在明年6月前提呈他们的建议书。 由于这将会是一项涉及隧道及3条主要道路的大工程，从开始鉴定发展商资格到选出得标公司，将耗时3年6个月时间。根据日程表，州政府与得标公司签约日期是在2015年5月，预料有关工程最快也要在第二年中旬才能动工。 竞标公司需有经验 资格鉴定活动主要是让州政府在正式公开招标前，初步筛选具有资格的竞标公司。当局对竞标公司的要求首先是要具备相关经验、可信任及有财力基础。 不提供预支工程费用 通过资格鉴定这一关的公司，才会受邀提呈他们对有关工程的建议书，对有关工程提出设计、研究及执行方案。在工程完成前，州政府将不会给予得标的公司提供预支工程费用，不过，竞标公司在建议书中可以提出他们在完成工程后的收费方案。 据悉，州政府将会以丹绒道光填海计划的100英亩地段做为支付工程费用的部分款项，并允许发展公司征收过路费以取回成本。 3大主要工程 这项涉及衔接槟威隧道及另外三条主要道路的工程，或会分为几个不同的部分来落实。 继槟城大桥及第二大桥之后，第三条接通槟岛及威省的通道，计划中的隧道将会从新关仔角衔接威北的峇眼阿占。 另外将和隧道工程捆绑在一起的3条主要道路分别是： 1. 乔治市绕道：从建议中的新关仔角隧道出口经过邦咯路、霹雳路及双溪槟榔路进入敦林大道。 2. 亚依淡新市镇（发林）绕道：此绕道将会是一条接通发林和敦林大道的新路，根据政府的要求，有关绕道将会开通几个出口连接叶祖意路、苏丹阿兹兰莎路。 3. 丹绒武雅通往直落巴巷的平行道路：有关道路将会在现在丹绒武雅通往直落巴巷道路的内则，再建造一条平行道路，以疏解有关道路车辆日益增加的压力。- 光华

Panasonic to invest RM1.9bil

GEORGE TOWN: Panasonic Corp will invest RM1.85bil in its latest solar manufacturing facility in Kulim Hi-Tech Park (KHTP).

The company will be leasing a 60-acre site from KHTP for the facility.

According to sources, Panasonic is now negotiating to finalise the lease payment, which will be a one-time payment, to lease the land for 60 years and an option to renew it for another 39 years.

In KHTP, the rental to lease the land starts from RM23 per sq ft.

Panasonic will start construction of the facility as soon as possible, as it plans for the plant to start operations in December 2012, with an annual production capacity of 300MW.

In an announcement made available at its website, Panasonic announced that it would establish Panasonic Energy Malaysia Sdn Bhd next month to produce solar cells and modules.

Panasonic’s solar manufacturing facility in KHTP will be the second company there after the US-based First Solar, which occupies 160 acres.

First Solar, to date, has invested RM2.9bil in KHTP since 2007, employing 3,400 workers in its six plants.

There are 37 companies providing support services for solar power and semiconductor industries in the country.

Among them is Saint-Gobain Solar (SGS) from France, which has invested RM46mil in KHTP for a glass manufacturing facility to support the solar industry, and is expected to start operations this month.

In the announcement, Panasonic said with environmental awareness increasing globally and the introduction of subsidy systems and feed-in tariff schemes in Japan and other countries, the solar cell market was predicted to grow further.

“Robust demand is expected particularly in the residential sector, the main target of the Panasonic solar modules.

“The new factory in KHTP will not only help Panasonic meet this growing demand, but also strengthen the company’s module’s cost-competitiveness with the vertically-integrated production,” the announcement said. - The Star

Demand for housing likely to be stronger in H2 next year

KUALA LUMPUR: The number of applications for property development licences is expected to be slightly lower in 2012, according to Housing and Local Government Minister Datuk Seri Chor Chee Heung.

“This year there is a very high number of applications. Also, the trend for the property market next year is optimistically cautious,” Chor said after the launch of the Star Property Fair 2011. Chor reiterated that the construction sector was expected to grow 3.4% this year compared with 5.1% in 2010.

He pointed out that speculative activities in the property market might be dampened in the first half of next year due to the recent measures such as the 5% increase in the real property gains tax to 10% for units sold within the first two years after purchase and Bank Negara’s guidelines on responsible lending.

However, Chor said he believed that demand in the housing market would be stronger in the second half of 2012.

“Towards the second half of next year, once purchasers are used to these measures, they would be back in the market.”

Chor said he was expecting a “rationalisation” in residential property prices although they were not expected to be lower due to increases in the cost of land, raw materials and wages.

“This is because the Federal Government has put in place measures to build affordable homes for first-time buyers or those with household incomes not exceeding RM7,000 a month. When the Federal Government starts to do this, property developers would invariably build homes at affordable prices.

“But they would not be right in the middle of Kuala Lumpur; maybe they would be in Rawang and Semenyih. The price of housing cannot go up every year; it has to reach equilibrium at some point.”

Chor said that one reason for the rise in property prices in Penang and Selangor was the high premium paid by developers for the conversion of land use.

The Star Property Fair is being held until Nov 27 at the Kuala Lumpur Convention Centre.

Developers such as SP Setia, IOI Properties, Naza TTDI and Mah Sing are exhibiting their property offerings at 130 booths. - The Star