The Star Online: Business
The Star Online: Business |
| Posted: 10 Jun 2011 06:52 PM PDT DH Flinders Ltd, a specialist Asia-Pacific corporate advisory practice that focuses on real estate, financial services and small capital sectors, sees good investment opportunities in Islamic real estate investment trust (REIT) in Malaysia. Executive director Stephen Hawkins says Malaysia already has a good start in terms of Islamic REIT awareness, having established the guidelines for this type of investment. "Malaysia has syariah guidelines and syariah REIT guidelines, so there's already a formal structure that provides fund managers and operators a structured environment to work within. "It also provides the regulators with an environment to regulate and investors will be able to see clearly how things will be structured and run in this market," he tells StarBizWeek. DH Flinders has offices in Australia and Singapore. In November 2005, the Government, through the Securities Commission (SC), issued guidelines for Islamic REIT, setting a new global benchmark for the development of Islamic REIT and making Malaysia the first jurisdiction to introduce such guidelines in the industry. According to Bursa Malaysia website, presently, Malaysia is the only government to establish such guidelines for Islamic REIT. The guidelines facilitate the creation of a new asset class for investors and provide new opportunities for market players, including fund managers, to further diversify their investment portfolios. "Malaysia has an advantage over the rest of the region because it has taken the time to put those guidelines in place," says Hawkins. On a global level, Hawkins believes that there is a large, untapped market for Islamic REITs. Malaysia, he says, is in a good position to benefit with its established guidelines in place. "From a Malaysian context, Malaysian people and Malaysian funds are already comfortable with syariah-compliant REITs. "From an international perspective, there are lots of syariah investors in the Middle East that look to countries like Malaysia that have established guidelines. There's an opportunity to provide more investment products to those investors to give them choice." Hawkins notes that by having an established conventional REIT market in Malaysia, both local and foreign investors would be confident in diversifying their investment portfolio into Islamic REIT. "From a REIT perspective, I see some good opportunities in Malaysia. Investors are already aware of REITs in this country. They've become comfortable with this vehicle in the last five to 10 years." According to Bursa, there are 13 REITs being offered in Malaysia now, including two Islamic REITs. Al-Aqar KPJ REIT is the first Islamic REIT in the world while Al-Hadharah Boustead REIT is the first Islamic plantation REIT. Both Al-Aqar KPJ REIT and Al-Hadharah Boustead REIT rank among the top-three REITs in Malaysia in terms of dividend yield, according to information on the local bourse's website. "There are already (Islamic REIT) vehicles out there, but I believe there's a lot more market appetite for this type of products," Hawkins says. According to SC guidelines on Islamic REITs, rental incomes are derived from permissible business activities conducted according to syariah principles. In the case where a portion of the rental is from non-permissible activities, then these rentals shall not exceed 20% of the total turnover of the Islamic REIT. An Islamic REIT is not permitted to own properties where all the tenants operate non-permissible activities. With more stringent guidelines (as opposed to) conventional REITs, Islamic REITs usually comprise investments in industrial properties. This is because industrial properties are the easiest of the property sub-sectors to assess and to ensure that they are syariah-compliant, says Hawkins. "Most industrial facilities, even if they're multi-tenanted, you kind of know what they're doing and it's easy to asses or judge. But a lot of industrial properties are single tenanted anyway. "It's harder for a hotel or shopping centre as there's going to be alcohol or gambling activities in this type of property. It's difficult to eliminate this from your tenancy mix. Even from an office point of view, it will be multi-tenanted and it won't be easy to determine what the tenants are doing inside." Essentially, properties that are syariah-compliant would need to operate under circumstances where it is not contrary to syariah law. These include gambling activities or the selling of alcohol, tobacco-related products and manufacture or sale of non-halal or related products. "Fundamentally, industrial properties (tend to be more) compliant with the syariah guidelines," says Hawkins, adding that industrial properties are capable of generating good and stable yields. "From my perspective, for the industrial sub-sector, the buildings may not be the trophy assets. They're not going to be the largest office tower or the newest shopping centre in a city. "But I believe that industrial properties can provide good yields because they have all of (right investment) fundamentals, such as strategic locations and long leases." Hawkins also says that the industrial property sector is not subject to huge upswings and downturns experienced by other property sectors. "In good times, the rents (for industrial properties) may not increase as sharply as other sectors but in a downturn, they are more defensive from a returns and value perspective, and essentially, more resilient." Hawkins also believes that industrial property sector is a "proxy for the overall economy." "Demand for industrial space is essentially linked to economic activity. Asia is in the middle of a big growth cycle and the world is starting to recognise that Asia is where that growth is, and industrial property is a proxy for that growth. "As the population grows or economic activity starts to increase, people need more industrial space. It's a good time to be in Asia and Malaysia and a good time for the industrial sector to provide strong returns to investors in a REIT product that is safe and provides solid yield, plus growth." Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
| Posted: 10 Jun 2011 06:52 PM PDT MAH Sing Group Bhd plans to make its debut as a regional property player this year and hopes to kick off its first offshore project in China by year-end. Group managing director and group chief executive Tan Sri Leong Hoy Kum says the decision to hold back from venturing overseas earlier has been a blessing for the company as it has allowed Mah Sing to build up a stronger market presence locally. "We had planned to venture into China two years ago but decided against it after some careful analysis. On hindsight, this has proven to be the right decision and the company is in a much more comfortable position to do so now," he tells StarBizWeek. To achieve its vision as a world-class regional developer within the next five years, Leong says Mah Sing has also set its sight on Singapore, Australia and Indonesia. Locally, the company has grown to be one of the most diversified property developers in the country with a broad product offering in the Klang Valley, Penang and Johor Baru. It has 34 projects (including five completed ones) in the residential, commercial and industrial segments. To support its sales target of RM2bil to RM2.5bil this year, Mah Sing plans to roll out between RM2.5bil and RM3bil worth of launches. Of this, some 36% will comprise landed residences, 32% will be service residences and small office home office (SoHo), 29% from commercial properties and 3% from industrial projects. Mah Sing's range of residential projects are marketed under the township Perdana brand, medium high to high-end Residence brand, and high-end Legenda brand. For high-rise properties, Mah Sing recently launched the M series M Suites and M-City, and Plaza series Garden Plaza in Cyberjaya. Leong says the current trend is to have mixed-use developments that have a mixture of residential suites, office suites and retail outlets within the same development, "as buyers are opting for products that improve their quality of life, and the convenience of everything being in close proximity to each other." Its latest project to be previewed, M-City@Jalan Ampang, attracted over 3,000 registrants for the designer SoHo suites, residential suites and sky villas. The RM920mil project features 1,200 units of residential suites, office suites and retail outlets, on five acres of freehold land. The first component to be previewed was the designer SoHo suites comprising single storey units with built up of 781 sq ft, 853 sq ft and 1,066 sq ft, as well as duplex units with built up of 910 sq ft and 1,330 sq ft. These semi-furnished residences have average price of RM800 per sq ft (psf). Trendsetter Based on a garden city concept, M-City boasts of over four acres of greenery with hanging gardens, lagoon parks and other thematic parks for residents. There will also be lifestyle retail outlets to cater to the needs of residents and tenants. The three-storey boutique retail shops has average lot size of 28' x 78'. According to Leong, Mah Sing is also making an impact in the commercial property sector, and is one of the few listed developers to offer industrial products through its iParc range of projects. Its latest iParc 3@Bukit Jelutong will comprise 25 units of 3 storey semi-detached bungalows with land size of 60'x132', built up from 5,339 sq ft and indicative price from RM3.3mil. They will be designed for 4-in-1 centralised functions, where the factory, office, showroom and warehouse can operate from one central location. Going forward, Mah Sing wants to build more street malls and retail malls. It has three street mall projects Southgate KL, StarParc Point Setapak and Star Avenue D'Sara, and two retail malls Icon City Petaling Jaya and Southbay City on Penang island. Since its launch in 2008, Southgate KL with gross development value (GDV) of RM458mil, has been 98% sold. Of the five blocks of lifestyle retail and modern office suites, two were sold en-bloc and the balance on strata. "At the moment, we have approximately 70% tenancy rate for the retail portion of Block A, and the building is expected to open for business in August," Leong says. StarParc Point Setapak with GDV of RM129mil was launched in the first quarter of 2009. It is nearly 100% taken up. Fronting the upcoming Parkson Mall and Jalan Genting Klang, the covered lifestyle square will feature al-fresco dining outlets and boutique shopping. The three-storey shop office units with built-up from 4,880 to 6,904 sq ft are priced from RM2.2mil, There are also the six-storey series comprising double-storey retail lots from 2,251 to 4,950 sq ft priced from RM1.3mil, while the four-storey offices of 1,264 to 2,715 sq ft are from RM295,000. Lifestyle projects Star Avenue D'Sara that fronts Jalan Sungai Buloh is one of the first new commercial projects along Jalan Sungai Buloh. Comprising 92 units of three- storey shop office priced from RM2.2mil, the RM402mil project was launched in April. Located close to the proposed MRT station in Taman Industri Sungai Buloh, the project is adjacent to the Rubber Research Institute land, has dual access from Jalan Sungai Buloh Shah Alam and Persiaran Cakerawala. As for retail malls, Icon City Petaling Jaya, located on 20 acres at the crossroads of Lebuhraya Damansara-Puchong and the Federal Highway, is Mah Sing's flagship project in the commercial segment. The project with GDV of RM3.2bil offers one of the best visibility in the Klang Valley. Under the first phase of the project, 30 prime lots comprising seven and eight storey lifestyle shop offices with wide frontage, high ceilings, quality finishing, private lifts and main road frontage, were recently previewed, of which 19 units valued at RM192mil were sold. The second phase of the project comprising two and three storey retail lots (with indicative price from RM3.6mil), small office versatile offices (from RM570,000) and residential units, are now open for registration. Leong says the development will also have a hotel, corporate office towers and a retail mall. Meanwhile, Southbay City on Penang island, located about five minutes from the upcoming second Penang bridge, will have commercial portion to the tune of RM2bil in GDV. The first phase of the project will comprise the RM265mil Southbay Plaza that will be ready for a preview soon. The residential suites with built-up of 1,030 to 1,645 sq ft will have indicative price of RM550 psf, while the lifestyle retail shops of 1,000 to 12,500 sq ft will be at RM500 psf.
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| Posted: 10 Jun 2011 06:52 PM PDT KUALA LUMPUR: Shares of SP Setia Bhd, the largest property stock on Bursa Malaysia, rose 5 sen to RM4.15 after meeting earnings expectation for the half way mark of its financial year with analysts confident the company would be able to meet its full year sales target of RM3bil. Sales for the second quarter and the first half had surpassed previous highs, and revenue for the seven months of its financial year ending October 2011 was already higher than any other full year except for its 2010 financial year. "Current unbilled sales have touched a record RM3.2bil following strong year-to-date (7 months) pre-sales of RM1.66bil. Setia is very much on track to meet its sales target of RM3bil," said AmResearch in a note yesterday. CIMB Investment Bank in a report said some 57% of the sales came from the Klang Valley. "The four townships in Johor contributed huge sales of RM510mil or 36% of the total while Penang chipped in 7%. The Johor sales were very commendable, being an unprecedented RM1bil on an annualised basis compared with past sales of RM400mil to RM500mil per annum," it said. "SP Setia's second half sales should exceed first half sales comfortably as sales from KL EcoCity should be considerable." Expected to drive sales this year will be the company's KL Eco-City project. HwangDBS Vickers Research in its note said KL Eco-City's RM1.8bil worth of bookings from boutique and strata offices and recent condo tower launch at an average selling price of RM1,200psf, which was a 40% premium to adjacent properties, should be converted soon, following the signing of S&P agreements from mid-June onwards with the completion of DBKL's land privatisation exercise. It pointed out that other launches to watch were V Residences and Brook Residences (with a gross development value of RM233mil), Fulton Lane@Melbourne with a projected GDV of RM1.4bil and Aeropod@ Kota Kinabalu (projected GDV of RM1bil but is awaiting approvals). "SP Setia will be one of the biggest beneficiaries of the mass rapid transit with 25% of RNAV exposed to potential interchanges ie KL Eco-City and Jalan Bangsar (near KL Sentral)," said Hwang DBS. It said SP Setia could be involved with more landbanking deals. Hwang DBS said SP Setia has been the most aggressive developer with four acquisitions year-to-date with a GDV of RM15bil. AmResearch expects land acquisitions to be the primary valuation driver. "Based on its township track record, SP Setia would be the leading candidate to co-develop a parcel of the prime residential land in Sg Buloh with EPF-owned Kwasa Land, leveraging on its successful Eco Park brand," it said. "We are expecting stronger newsflow on this front in the next few months. It is also bidding for the 100-acre seafront land in Bayan Mutiara, Penang believed to be valued at over RM900mil including reclamation cost, and a potential GDV of over RM5bil," said the report. |
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