Fajarbaru Builder plans RM728m property projects

Loan deal: Chan and Maybank corporate banking MD Caroline Teoh at the agreement signing for a bridging loan facility for the Gardenhill condo project in Melbourne.

PETALING JAYA: Small-cap contractor Fajarbaru Builder Group Bhd has property projects with a gross development value (GDV) of RM728mil in Malaysia.

Besides that, its first overseas joint-venture project in Melbourne, which has a GDV of A$77mil (RM215.6mil), has seen a take-up rate of 80%.

The construction player, with a market cap of RM139.77mil, plans to launch three projects in the Klang Valley and Malacca by the end of 2016. These include a condominium project in Puchong with a GDV of RM400mil, a serviced apartment project in Sentul with a GDV of RM250mil and serviced apartments in Malacca with a GDV of RM78mil.

Its property division manager Yau Tuck Wai said it would launch the Puchong project by year-end, the Sentul project in the first quarter of 2016 and the Malacca project in the third quarter of 2016.

At the signing ceremony of a loan facility agreement with Maybank, Yau said the 136-unit luxurious condominium project at the Doncaster suburb of Melbourne would be completed by end-2016 or early-2017. The 0.6 acre was bought a year ago for RM20.61mil.

Its finance director Ooi Leng Chooi said the 51%-owned Fajarbaru-Beulah (Melbourne) Pty Ltd, that was working on the Gardenhill project in Melbourne, would contribute positively to its earnings once it was completed. For its third quarter ended March 31, close to 80% of its revenue came from construction activities.

Its current unbilled order book is RM450mil.

Fajarbaru-Beulah executive director Chan Jiaheng expects the construction of the project to start in six weeks’ time, while the whole project would take about 15 months to complete.

“We’re finalising the contractors now,” he said, adding that buyers of the high-end condos comprised a mix of foreign and local investors as well as buyers for own-stay.

Ooi declined to comment on the amount of loan taken for the Australian project, but conceded that it would inevitably impact its gearing. The firm’s total borrowings was at RM46.97mil as at March 31, while cash and cash equivalents stood at RM36.9mil.

He said the facility was in Australian dollars to mitigate currency exchange risks.

The units are priced at about A$700 per sq ft.

For the third quarter ended March 31, net profit fell 18.1% to RM782,000 compared with RM955,000 a year earlier. Revenue for the same quarter surged 93.1% to RM106.03mil from RM54.92mil a year ago.

As for its first nine months, earnings jumped 35.34% to RM3.37mil from RM2.49mil in the previous corresponding period, while revenue rose 28.3% to RM274.66mil from RM214.1mil.

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Investing in property – a must for young adults?

The sooner is the better for property investment, which is why Gen Ys should begin investing early.

 By MANGALESRI CHANDRASEKARAN

Millennials are encouraged to learn about property investment and better understand the industry prior to investing.

If you are aged between 18 and 34, then you are categorised as millennials, also known as Gen Y. At this age, it is a good time to consider investing in property.

Investing in property is certainly not easy, and most youngsters hesitate to invest due to several uncertainties. Long-term investing is challenging and needs a huge amount of patience and knowledge, but young adults have time as an added advantage.

The key benefit of property investment is increasing financial leverage. The value of most properties increase yearly, which makes it advantageous to invest from a younger age. A person who invested in their 20s is likely to be able to maximise capital appreciation as they allow the price to appreciate for a longer duration (provided their objective is to get long-term gains), compared to the investment made by a person nearing retirement.

Moreover, an investor’s age plays a role in determining the risk a person can withstand. The younger the person is, the more risk they might be willing to take on, compared to someone who is nearing retirement as they are at a different stage in life and might look at risk-free or lower-risk investments (unless they are a seasoned property investor).

Investing in property also means adding assets. When paid in full and managed well, the investment will remain an asset, while providing passive income monthly and capital appreciation. Kept for a longer time, this asset can also be passed on from one generation to the next.

Investing at a young age is obviously not an easy decision to make, but it is not impossible as well. With the right mindset and plan, it’s the best age to begin.

For a successful investment, young millennials should:

• Be in the know: Being tech-savvy is another advantage for Gen Ys, as there are apps, online courses, financial and educational property websites, blogs and social media, which offer valuable guidance. What matters most is getting your research done and get the right knowledge base before venturing into property investment. You should read up on books by financial and investment gurus, and attend talks and forums to get invaluable insights from property experts and investors. Learn from their mistakes and avoid the pitfalls of property investment.

• Consider a shared investment: Shared investment with a person who has the same passion or perhaps with parents or siblings is a bold move. Youngsters mostly fear the huge amount needed for their first property, which is 10% of the property value. Having a shared investment will ease the burden and make investing more appealing, while managing the risk to a certain extent.

• Buy to generate income: There are some young adults who are considering buying property for their own use, but the best investment is to rent out the property. The investor would get capital appreciation and monthly rental at the same time and it’s not necessary to fork out money each month. So it’s better to let tenants pay for your investment.

• Keep risks under control: Millennials should consider investing at a younger age, since that’s the best time to acquire a property and make the most out of their money and youth. As much as it is important to invest, it is also equally vital to keep the risks under control.  But it also depends on risk appetite, interest and financial management. For initial investments, choose an affordable property and always have a Plan B in case of emergencies. Have the “trading up” mentality, where you start with lower-priced properties and move up as you continue to invest.

• Choose the right property: To have a successful investment, it is important to choose the right property which will grow in value and attract potential tenants. You could start with smaller-sized units such as studio units and SOHOs priced below RM500,000. Of course, the location plays a major role. So it is best to evaluate the surrounding areas, the growth indicators and upcoming infrastructure, existing and future amenities, the developer (if purchasing new properties), and so on.

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International zones for Iskandar housing projects

JOHOR BARU: Several waterfront development areas along the coastal line of Iskandar Malaysia will be designated as international zones for housing development projects.

Mentri Besar Datuk Mohamed Khaled Nordin said the move would address fears among locals of foreigners snapping up all available properties in the economic growth region.

He said Tebrau Bay overlooking Singapore is now designated as the international zone and it would be promoted globally to attract more investors into the area.

“The state authorities will be meeting stakeholders in the first week of next month to get their input and the plans would be showcased to the public for two weeks,’’ he said.

Khaled was speaking at a groundbreaking ceremony for the multi-billion ringgit waterfront development project by Iskandar Waterfront Holdings Sdn Bhd and China-based Greenland Group on Monday.

Also present at the event were Iskandar Waterfront group executive chairman Tan Sri Lim Kang Hoo and Greenland Group executive vice-president Xu Jing.

The high-end mixed development project – Greenland Tebrau with a gross development value of RM30bil on 51.79ha site in Tebrau Bay would be developed in five phases over the next 10 years.

Khaled said although the state government had identified the locations of the zones, it still needed feedback from the stakeholders.

He said among the stakeholders were members of the Johor branch Real Estate Housing Developers Association, Iskandar Regional Development Authority, local authorities and non-governmental organisations.

“The international zones will help to increase competitiveness of the Johor property market and protect local buyers,’’ he added.

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Home in the heart of embassy row

Posted on July 28, 2015  | 908 views |  Topic : Featured, Featured Dev, Property News.

An artists impression of the 18 Madge development.

KSL Holdings Bhd says the discerning individual looking for an exclusive residence in the city centre need look no further, as the last prime real estate in Kuala Lumpur’s embassy enclave is now set to offer comfort, convenience and elegance.

The company’s development, 18 Madge, is a luxury development located at one of the most prestigious addresses in Kuala Lumpur.

The low-density development offers just 50 units in eight designs.

The project’s site is surrounded by embassies and other diplomatic installations.

Just a stone’s throw away from the Petronas Twin Towers, KLCC and leading restaurants and hotels along Jalan Sultan Ismail and Jalan Ampang, 18 Madge is well connected to the city’s most exciting destinations. There are also plenty of amenities nearby from international school, medical facilities, recreation facilities and leisure spots.

The company says the project, which is being designed around Zen principles to impart a sense of freshness and purity, will feature units from 204sq m to 14,800sq ft.

There are two 1,374sq m penthouses on the upper floor of the 10-storey block that can be divided into two separate living spaces for two families.

A sky lounge on the roof deck also offers a tranquil setting, infinity pool and wading pool, garden and a fully equipped gym and sauna.

Each standard condo unit comes with three parking bays and a comprehensive three-tiered security system including round-the-clock security guard services, CCTV surveillance and panic button and an intercom.

The project by GoodPark Development Sdn Bhd, a wholly-owned subsidiary of award-winning property developer KSL Holdings, is designed by Veritas Architects Sdn Bhd, one of South-East Asia’s leading architecture firms renowned for its commitment to design quality and excellent service.

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DPM to launch RM145mil school

The campus houses the Matrix International Pre-School, Matrix International School and Matrix Private School. It has the capacity to accommodate up to 2,500 students.

THE Matrix Global Schools (MGS) to be officially launched by Deputy Prime Minister Tan Sri Muhyiddin Yassin on Tuesday has been modelled after the 130-year-old Ellesmere College, a prestigious British residential school.

MGS, which comprises the Matrix International Pre-School, Matrix International School and Matrix Private School, opened its doors last September in Bandar Sri Sendayan near Seremban and already has an enrolment of 426 students.

Matrix Concepts Holdings Bhd (MCHB) chairman Datuk Mohamad Haslah Mohamad Amin said the MGS campus had full-fledged facilities equivalent to most universities including auditoriums, lecture theatres, music rooms, recording studios and a performing arts centre.

“Although we have an international and a private school, we shall always adhere to our ethos of one campus, one vision and one mission.

“With the East meets West and West meets East approach, we want to create a seamless brand of education between the schools,” he said.

MCHB-owned MGS, which cost RM145mil to build and sits on a 8ha piece of land, has a capacity to enrol up to 2,500 students.

The Matrix International School offers the IGCSE University of Cambridge O and A Levels programmes while the Matrix Private School will follow the national KSSR and KSSM curriculum.

Mohamad Haslah said MGS was also unique as its methodology offered a holistic approach to learning and one which empowered creativity and critical thinking while enhancing leadership skills and character.

“We have created a seamless brand of education where our national school is also the international school and vice versa,” he said, adding that almost all the teaching staff at the international school were expatriates.

Apart from having a block of 428 hostel apartments, MGS also has a multipurpose hall with a 1,000 seating capacity, indoor badminton courts, a sports complex, stadium as well as other features for outdoor games and activities such as rugby, football, wall climbing and kayaking.

Mohamad Haslah expressed confidence that the MGS would have a full enrolment by 2020.

“In fact, we are confident that we will have at least 1,000 students by the end of next year,” he said.

The target in the next five years is to have 1,000 students enrolled in the international school and 1,500 in its national private school.

He said despite having top facilities and teaching staff for a conducive teaching and learning process, MGS was also a better option as its fee structure was cheaper than that offered by others.

“Compared to international schools in Kuala Lumpur, for example, we offer double the facilities at half the price,” he said.

Haslah said to mark its official opening, MGS would also launch the Earth Pyramid Incubation Centre (EPIC), a global project for the advancement of education.

EPIC is now spearheaded by MGS and has the support of authorities from 20 nations.

The aim of the Earth Pyramid project is among others, to help educate and give people a chance to connect on a global scale.

“It is also to enable students to interact with their peers or anyone anywhere and to constructively discuss any global issue, allow a greater understanding of their cultures and to tackle challenges together,” he said.

Mohamad Haslah said an Earth Pyramid monument would be built near MGS and would become a tourist attraction upon its completion.

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Developer unveils new gallery

Property developer Tropicana Corporation Bhd has launched a new 1,114sq m property gallery to showcase its Tropicana Aman development.

Situated within Tropicana Aman’s 349ha self-contained mixed township development, the gallery also functions as the developer’s satellite office next to the growing neighbourhood of Kota Kemuning, Shah Alam.

Tropicana non-executive deputy chairman Datuk Seri Mohamad Norza said Tropicana Aman was the company’s biggest township development in Malaysia and its first large development in Shah Alam.

“We are very pleased to expand our brand in the growing region of Shah Alam. We hope our presence here will provide greater convenience and easier access for purchasers of Tropicana’s exclusive properties,” said Mohamad Norza.

Not only does Tropicana Aman offer an array of facilities, the area also features an 34ha central linear park and lake and a 7km long vehicle-free trail which is designed for walking, jogging and biking.

“This development is set to be an idyllic place where you can find the balance in life, where the yellow bicycle, our development’s icon, serves to remind us to slow down, breathe in the fresh air and live in a walk and bike-friendly environment,” said Mohamad Norza.

Mohamad Norza (left) and Tropicana Corporation group managing director Datuk Edmund Kong at the official opening of the company’s gallery. Photos: RAY MOND OOI

Tropicana Aman marks Tropicana Group’s fifth township development in the Klang Valley.

“We’ve received great response for Tropicana Aman’s first phase, Arahsia Residences, with an impressive 100% take-up rate since its launch two months ago.

“We hope it will be the same when we launch the second phase,” added Mohamad Norza.

Tropicana is set to launch the second phase of Tropicana Aman in August.

The developer will also be hosting its second Fun Ride event on Aug 1, from 5pm to 9pm to provide its potential residents and the public a snapshot of the up and coming walk and bike-friendly environment.

For a registration fee of RM15, participants will be given a T-shirt, water bottle, towel and a medal and will be treated to a buffet dinner, DJ performance and lucky draws.

The ride is open for registration to adults and children aged 12 years and above until July 28.

There will be 20 lucky draw prizes and four yellow bicycles to be given away.

For more information,visit www.tropicanaaman.com.my

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Property company KIP eyes Bursa listing next year

Latest offering: Ong (left) and KIP senior general manager Siew Fook Wah with a model of 8escape@Iskandar Malaysia.

JOHOR BARU: Plans are already in the pipeline for Kuala Lumpur-based property company KIP Group to be listed on Bursa Malaysia next year.

Executive director Datuk Eric Ong said the company was currently undertaking the necessary steps to prepare itself to become a public-listed entity.

He said although there was no exact date when it would be listed in 2016, the exercise would definitely take place as the company had planned it a “long time ago”.

“We are building up our assets now for listing purposes and looking at the real estate investment trust segment as our core activity,” Ong told StarBiz.

He said this at the groundbreaking ceremony of the company’s freehold high-rise condominium project 8scape@Iskandar Malaysia near Taman Sutera here.

The project on a 3.72ha site comprises four tower blocks of 25-storeys each, offering 1,255 units of condominiums with built-up area ranging from 808 sq ft to 1,654 sq ft.

The average selling price for each condominium unit for the first two blocks is between RM450 and RM500 per sq ft and the indicative prices for the last two blocks from RM550 per sq ft onwards.

The project, with a gross development value (GDV) of RM700mil, is expected to be completed in the first quarter of 2018.

Ong said the company was confident the project would do well despite negative reports of a property oversupply in Iskandar Malaysia, especially in the high-rise residential property segment.

He said that 60% of the units for the first two blocks had already been sold and the company would soon submit its application for the bumiputra released units for the non-bumi buyers.

“Iskandar Malaysia will be the main factor to continue driving property demand in south Johor.

“The property outlook here has evolved over the years,” said Ong.

He said the company had made its foray into the Johor Baru market during the 1997/1998 Asian financial crisis with Tampoi Indah long before the launch of Iskandar Malaysia on Nov 4, 2006.

Ong said it would open its community mall KIP Mart in Sepang, Selangor, in the first quarter of 2016, to be followed by Sungai Buloh, Selangor, and Sungai Petani, Kedah, in the third quarter, and Kuantan, Pahang, and Kulim, Kedah, in the first quarter of 2017.

He said the company was looking for suitable land in Batu Pahat, Kluang, Muar and Gelang Patah in Johor to open more KIP Mart outlets within the next two years.

“We are looking at a land size of between 4.04ha and 7.28ha for the mall, and the GDV for the mall plus land price should be in the region of RM40mil each,” he added.

He said its first 200-room boutique hotel – KIP Hotel in Jalan Ipoh, Kuala Lumpur – would open for business in September this year before expanding to Sepang, Selangor, and Bachang, Malacca, in 2017.

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MKH strategy pays off

New landmark: An artist’s impression of Kajang 2. MKH’s property crown jewel is the 220-acre Kajang 2 flagship development, where more projects would be rolled out closer to the completion of the MRT in 2017.

PETALING JAYA: MKH Bhd’s focus on developing affordable homes will help the company continue to generate steady earnings despite the slowdown in the local property market.

AllianceDBS Research said in a report yesterday the company’s strong orderbook was testament that there was robust demand for affordable homes.

“Unbilled property sales had reached a record high of RM843mil as at March 2015, representing 1.6 times its 2015 (ending Sept 30) property revenue. We understand property sales had reached RM600mil as at June, and is on track to meet its 2015 target of RM850mil.

“This is largely driven by its focus on affordable homes, which remain popular with buy-to-stay homebuyers.”

The research house said MKH’s property crown jewel is the 220-acre Kajang 2 flagship development, where more projects would be rolled out closer to the completion of the Mass Rapid Transit (MRT) in 2017.

“We conservatively estimate the land alone to be worth over RM300mil,” it said.

AllianceDBS Research added that MKH’s property sales had been resilient over the past two years despite the slower market, thanks to its focus on affordable homes, in which the group has a good track record.

“MKH never employed the Developer Interest-Bearing Scheme when its peers introduced the incentive package in the past few years to attract buyers. This suggests the focus on affordable homes has helped to boost its sales.”

According to the research house, MKH still has about 1,400 acres of land bank, about half of which is located in the booming Kajang-Semenyih growth corridor and spurred by the development of the MRT connectivity.

“The land bank has generated more than RM10bil in gross development value and has underpinned earnings visibility for more than 10 years. However, MKH continues to actively scout for strategic land bank,” it said.

Separately, the research house said the company’s plantation business was already self-sustaining, adding that MKH had started servicing its US$85mil (RM323mil) borrowings since March.

“Thanks to the young tree profile, first-half 2015 fresh fruit bunch volume grew 41% year-on-year and helped to offset the impact of the low crude palm oil (CPO) price.

“A sustainable recovery of CPO prices will be a major catalyst for MKH because of the naturally high operating leverage for the plantation business,” it said.

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MRCB-Quill Reit Q2 profit jumps 59%

PETALING JAYA: MRCB-Quill Real Estate Investment Trust (MQReit) (formerly Quill Capita Trust) has recorded a net profit of RM13.632mil for the second quarter (Q2) ended June 30, 2015, a 59.2% jump from a year earlier due to recognition of the full-quarter income contribution from Platinum Sentral.

This was achieved on an 85.4% growth in revenue to RM32.175mil, attributed mainly to additional revenue arising from the RM740mil acquisition of Platinum Sentral in Kuala Lumpur in March, higher revenue from Plaza Mont’Kiara as well as rental rate increases for some properties.

Net property income soared 81.4% year-on-year to RM24.313mil for the quarter under review.

However, total expenditure more than doubled, resulting in a lower realised net income growth of 59.2%.

Finance costs of RM8.19mil and manager’s fee of RM2.1mil were incurred during the quarter, compared with RM3.57mil and RM1.35mil, respectively, in Q2 last year.

MRCB Quill Management Sdn Bhd, the manager of MQReit, attributed the larger finance costs mainly to interest on additional borrowings drawndown on March 30.

It also noted that property operating expenses were higher by 98.9% due to the purchase of Platinum Sentral and higher repair and maintenance expenses for Plaza Mont’Kiara.

MQReit has an income distribution policy of at least 90% of its distributable income at least semi-annually but the percentage and interval are at the discretion of the manager.

MQReit is proposing an interim income distribution of RM14.683mil or 2.22 sen per unit.

This is 95.33% of the realised income for the period from March 24 to June 30, 2015.

It is payable on Aug 28.

Combined with the interim dividend per unit of 1.88 sen for the Jan 1 to March 23 period, it is delivering a distribution per unit (DPU) of 4.10 sen for the first half-year – the same DPU as the corresponding period last year.

MQReit owns 11 buildings, comprising five in Cyberjaya, three in Kuala Lumpur, one each in Shah Alam and Petaling Jaya, and one in Penang, valued at RM1.588bil as at March 31.

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