Malaysian home prices to rise 10-15% this year: WTW

KUALA LUMPUR: Residential property prices in the country will continue to rise 10 to 15 per cent this year, according to real estate services firm C H Williams Talhar and Wong Sdn Bhd. Managing Director Foo Gee Jen said sales for new housing developments will sustain this year driven by high demand for residential properties in the country.

"Areas of high demand will be close to the high-level infrastructure projects such as Mass Rapid Transit (MRT), Light Rail Transit (LRT) and Komuter train lines," he told reporters at the launch of the company's Property Market Report 2013 here on April 24.

"A big volume correction will be seen this year. House prices will remain generally flat but prices could face upward pressure from rising materials prices and other cost-push factors," said Foo.

The landed residential market is expected to continue to be in resilient mood with stable growth although fewer new units may be launched, he said. Developers are also trying to sustain profit margins by raising the new launch prices and testing new grounds for affordability.

"In tandem with that, they are putting in more eco-friendly and green building features as an added value to the projects.

"We have seen developers veering away from high-end niche devlopements and swtiching to more mid-range products in tandem with the government's PR1MA scheme," he said.

Foo said the outlook for the affordable housing segment is very positive. "We can expect units in this segment to continue to find a ready market. High-end residential properties continue to sell well in the major cities of Johor Baharu, Kuala Lumpur, Kota Kinabalu and Penang.

"We can expect with the seemingly strong demand, prices may be pushed upwards," he added. - Bernama

ARREIT to buy factory in Penang

KUALA LUMPUR: Amanahraya Real Estate Investment Trust (ARREIT) has entered into a sale and purchase agreement with Precico Electronics Sdn Bhd to acquire a factory in Penang for RM41.6mil.

Arreit ventured into the agreement via trustee CIMB Islamic Trustee Bhdin a bid to acquire the factory buildings located at Lorong Perusahaan, Prai Industrial Estate Mukim 1 Seberang Perai Tengah. - The Star

CapitaMalls M’sia Trust awards RM7m job for enhancement works to Gurney Plaza, Penang

KUALA LUMPUR: CapitaMalls Malaysia Trust (CMMT) has awarded a contract worth RM7mil to CapitaLand Retail Malaysia Sdn Bhd (CRMSB)to undertake the asset enhancement initiative works to Gurney Plaza, Penang.

In a filing with Bursa Malaysia, CMMT said CRMSB will be the project manager for the asset enhancement initiative works, which is to create additional retail space and enhance Gurney Plaza's retail offering.

The asset enhancement initiative works would include reconfiguration of space to improve the trade mix and sightlines, the company added.

The company also said that the asset enhancement initiative works would commence in the middle of next month.

The asset enhancement initiative works are slated for completion by the first quarter of next year.

CRMSB is a related party of CapitaMalls Malaysia REIT Management Sdn Bhd, the manager of CMMT. - Bernama

Real estate investment trusts losing lustre, investors opting for more aggressive strategies

PETALING JAYA: Local real estate investment trusts' (REITs) allure for investors may be waning on a combination of factors including lower returns due to REIT prices approaching target prices pegged by analysts.

Analysts said that while the industry's longer-term prospects remained positive, REITs were now downgraded to “neutral” as unit prices approached targets.

Maybank Investment Bank Bhd analyst Wong Wei Sum said the average gross yield for Malaysian REITs was a trough of 6.4% compared to 6.6% in January 2013 and 7.4% at January 2012.

She said in a report that investors might be adopting more aggressive strategies post-general election (GE) as some of them had used defensive strategies after close to two years.

“Investors may adopt a more aggressive approach for the property sector favouring the high-beta developers post-GE,” she added.

Other reasons for the change in weighting included competition from business trust and potential higher overnight policy rate (OPR) in the fourth quarter, which was expected to see a 25 basis-point hike in anticipation of a higher inflation rate, she said.

Meanwhile, two other analysts told StarBiz that OPR estimates by their respective research houses were maintained at healthy levels, which would not pressure the profitability of REITs.

Wong also said: “DiGi.Com Bhd, the third-largest telco in Malaysia, is mulling over setting up a business trust, we understand. If it were to materialise, DiGi's net dividend yield would be even more attractive than the current level of 5.3% (financial year 2014) and more competitive than large-cap Malaysian REITs' 4.4% (net yield).”

She added that competition could also stem from asset-rich developers like WCT Bhd, Dijaya Corp Bhd and Malaysian Resources Corp Bhd to unlock their assets value through REITs.

A general view of Mid Valley City. Maybank Investment Bank has downgraded IGB REIT to ‘hold’ while it has a ‘buy’ call on CapitaMalls Malaysia Trust.

An Affin Investment Bank Bhd analyst said competition posed by business trust in the near term would be minimal as investors might need time to understand its structure.

An RHB Research analyst said REIT sponsors had to inject at least RM1bil worth of assets to the instruments to achieve decent viability and liquidity.

She said that judging from the current completed assets that some of the developers had, it might take them a few more years to grow the asset sizes before listing them as REITs.

Thus, she did not see stiff competition from the REIT universe in the near term while KLCC Stapled REIT, which was en route to be listed this year was already on investors' radar.

Nonetheless, she was also neutral on the sector.

“Having said that, we will not see a selldown and a steep decline in REIT prices as the sector remains a good dividend play backed by asset value. Besides that, interest rates in the region are considered low,” she said.

The Affin analyst said she maintained an “overweight” for the sector this quarter but might tweak her computation following the financial results REIT players would announce in the coming weeks.

She said yields from REITs had been compressed to historical low and might look to downgrade the sector.

Maybank Investment has, in the report, downgraded Pavilion REIT,KLCC Property Holdings Bhd, Sunway REIT and IGB REIT to “hold” while it had a “buy” call on CapitaMalls Malaysia Trust.

The analyst from RHB Research said the brokerage's top pick was Pavilion REIT due to its location, asset quality and long-term growth prospects.

“When the mass rapid transit is ready, the Golden Triangle (in Kuala Lumpur) will be more vibrant and its growth will be even more attractive,” she said. - The Star

House buyers want interest waived

SOME 150 people who bought houses in an abandoned project in Taman Topaz in Dengkil, Selangor, held a peaceful demonstration after receiving bank notices over unpaid loans.

One of the buyers said the project, which was started in 2000, was only half completed, Malaysia Nanban reported.

He said most had been paying their loan instalments but stopped in 2003 after realising that the project had been abandoned.

“Most of us have agreed to pay the principal but we want banks to waive the interest charged from 2003,” he said yesterday. - The Star

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The retail space of Suiwah’s RM50mil Sunshine Bertam mall is fully-booked

GEORGE TOWN: Suiwah Corp Bhd's new RM50mil shopping mall in Bertam, Kepala Batas, is expected to open in June.

Group executive director Cynthia Hwangsaid the tenant-control mixed shopping mall, Sunshine Bertam, located on 2.43ha, would have some 200,000sq ft of lettable area.

“The hypermarket, called Sunshine Bertam, would occupy approximately 50,000 sq ft.

“The remaining floor space would be leased out to shops. The retail space is fully-booked,” she added.

Hwang was speaking at a press conference attended by Suiwah directors Datuk Ahmad Osman and Datuk Radzali Hassan, Sunshine Amanjaya's Datuk Rafique Abdul Karim, and Bertam Properties Sdn Bhd's Datuk Roslan Ibrahim.

Hwang said there would be four cineplexes and some 500 carpark bays.

“The size of each retail lot ranges between 200 sq ft and 1,000 sq ft.

“There will be goldsmith, florist, telecommunications, and food and beverage outlets.

Roslan says the company has sold most of the 70 units of shop-offices in the third phase.

“There would also be a karaoke and reflexology centre,” she added.

Bertam town has a population of around 100,000 people, upon which the shopping mall could depend for support.

Roslan, meanwhile, said that Sunshine Bertam was in the Bertam Perdana township. “The township is now in the third phase of development, located on a 6.47ha site, which is 60% completed.

“We have sold most of the 70 units of shop-offices in the third phase.

“The third phase should be completed in September 2013,” he said.

Roslan said Bertam Properties still had 32.37ha to 36.42ha in Bertam for commercial development, where the plan was to develop some RM200mil worth of commercial properties over a period of eight to 10 years.

“As for residential properties, we still have 202.34ha in Bertam.

“The plan is to develop some RM300mil worth of residential properties over the next eight to 10 years,” he said.

Listed in 1995, the group owns Sunshine Square, a pioneer department store and supermarket in Bayan Baru, Sunshine Farlim Shopping Mall, and Sunshine Lip Sin, a supermarket in Gelugor.

It also owns a chain of convenience stores in multi-national companies such as Kobe, Agilent, Lumileds and ASE.

The group has also diversified into manufacturing, property development and international trading. - The Star

Penang property expo sales exceed RM100m

The Malaysian Property Expo (MAPEX) 2013 in Penang raked in over RM100 million in sales, says iProperty.com.

In a note today, the country's number one property website said with expectation of closing more property sales in coming weeks, the three-day expo, which showcased 26 reputed real estate developers and property builders, attracted thousands of property buyers and investors.

iProperty said the record expo sales figures are testimony that the appetite for properties remained strong and even far exceeded expectations in some cases.

"Among the developers that generated high sales were IJM Properties Sdn Bhd, Katana Developments Sdn Bhd, Sayang Realty and Tambun Indah Land Bhd who collectively sold close to RM50 million," it added.

iProperty Group Chief Executive Officer Shaun Di Gregorio said: "With property developers reporting over RM100 million in closed deals, and thousands of visitors within three days, MAPEX 2013 was certainly an astounding success.

"Despite the upcoming elections and the uncertainties of the market, MAPEX 2013 proves that the love affair for property still continues," he said.

He added that this was the second time iProperty.com Malaysia has partnered with the Penang Real Estate and Housing Developers' Association (Rehda) to organise MAPEX and the confidence that regional property developers, local
estate realtors and consumers have in the iProperty.com brand is a testament to the company’s strong brand presence.

Echoing the same sentiments, Rehda Penang Chairman Datuk Jerry Chan said: "I am thrilled by the response we had at MAPEX 2013.

"Rehda Penang and iProperty.com Malaysia both share the same vision, to help home buyers find their dream homes at the most affordable prices.

"Judging from the sales that our participating developers had, we certainly achieved that vision in Penang."

Leading property experts in the industry gave tips, tricks and advice on making sound property investment decisions at the expo's seminar sessions.-- Bernama