Phase 1 of US$1.54b Thai mega project launched

BANGKOK: Three Thai developers, Siam Piwat Co Ltd, Magnolia Quality Development Corp Co Ltd and Charoen Pokphand Group Co Ltd have launched the first phase of their joint venture mega mixed development project, Iconsiam. This project is said to be the largest integrated development when fully completed.

Iconsiam’s first phase sits on 20 acres (8.09ha) of land by the Chao Phraya River in Bangkok, which is about 40 minutes from the Suvarnabhumi International Airport. The US$1.54 billion (RM4.93 billion) first phase has a total gross floor area (GFA) of 750,000 sq m. It will comprise two malls, two high-end condominiums and an event park. It will also feature seven precedent-setting attractions called The Seven Wonders at Iconsiam.

“The reason for this development is to enable Thailand to compete with other mega projects in the global arena that will bring recognition to Thailand,” said Siam Piwat chief executive officer Chadatip Chutrakul during the launch of Iconsiam on Tuesday.

“The planning of this mega development was not easy. We have been planning this project for two years with the government, and public and private industries to ensure its smooth progress and success.”

The land area for the development of Iconsiam was originally 16 acres but was increased to 20 acres through acquisitions of surrounding properties. Chadatip said they are looking to acquire more land for further phases of the mega integrated development.

The two retail complexes for Iconsiam’s first phase will comprise one luxury retail experience. Covering 525,000 sq m, the 10-storey retail complexes are situated back-to-back.

“Once the malls are completed, there will be more than 500 shops, 100 restaurants from 30 countries, and many services and products that are going to be available for the first time in Thailand. There are also venues capable of hosting world-class performances and gatherings,” said Chadatip.

The malls are set to be launched in the third week of July and will be ready for lease in October.

The two high-end residential towers at Iconsiam will be 70 and 40 storeys high and they are dubbed as The Magnolias Waterfront Residences at Iconsiam.

The 70-storey condo will contain 379 units with built-ups from 60 sq m to 346 sq m. The 40-storey condo will have 140 units consisting of sky villa and duplex sky villa.

“We have not finalised the built-ups for the 40-storey tower,” said Magnolias Quality Development chief executive officer Tipaporn Chearavanont. No selling price was disclosed and will be revealed at a later date. The Magnolia Waterfront Residences will be launched at end-July, Tipaporn added.

The construction stage for the project started in March 2014 and it is set to be completed in 2017.

Iconsiam will also be accessible via river transportation. The project will have three piers linked to the mall and residential towers and a pier for private yachts.

An artist’s impression of Iconsiam by the Chao Phraya River in Bangkok.

 

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Bangkok luxury apartments offer 6% annual return over two years

KUALA LUMPUR: Than Living Sathorn-Charoenrat, a luxury condominium development by Siralai Co Ltd in Bangkok’s new central business district, is offering 6% returns per annum for two years. A preview of the project by Knight Frank Malaysia will be held this weekend for interested Malaysian buyers.

According to Siralai chief executive officer Thanyaporn Chansakulporn, the project chalked up sales of RM8 million in May when it was launched in Singapore.

“The positive response to the Than Living launch in Singapore is a direct indication that Thailand still remains a popular property investment hub for foreign buyers despite the country’s political situation,” she said in a statement.

Than Living Sathorn-Charoenrat is located near its namesake main road as well as Chan Road and Rama III Road, Surasak BTS Station, and Charoenrat BRT Station. The condos overlook the Chao Phraya River, and are close to amenities such as Central Plaza Rama III, Asiatique The Riverfront, popular retail outlets, international schools and hospitals.

The RM200 million project will consist of a 36-storey tower comprising 523 units of apartments with built-ups from 312 sq ft to 1,604 sq ft, excluding penthouse units which have built-ups of 2,852 sq ft to 3,057 sq ft.

Apartment types include 1-, 2- and 3-room duplexes, executive 2- and 3-bedroom apartments. Prices start from RM301,700.

Some of its amenities include a private library, gymnasium, multipurpose room for aerobics or yoga classes, parking, and 24-hour security.

Frank Khan, Knight Frank Thailand executive director and head of residential, noted that the current political unrest in Thailand has not permanently affected the property market.

“In the first four to five months the market may have been a little soft but it has vastly improved and is only continuing to do so. Despite the political turmoil, the private sector is still strong and going well. As a matter of fact, cooling measures were introduced as a result of the political unrest to ensure that oversupply does not occur.”

This article first appeared in The Edge Financial Daily, on July 4, 2014.

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Taylor Wimpey launches Paddington Exchange in Kuala Lumpur

KUALA LUMPUR: UK property developer Taylor Wimpey Central London announced the launch of their new scheme Paddington Exchange in Kuala Lumpur in a statement yesterday. The developer is part of Taylor Wimpey plc, one of the UK’s largest residential housebuilders.

“We are delighted to confirm the addition of this fantastic scheme to the Taylor Wimpey Central London portfolio and very much look forward to getting started,” said managing director Ingrid Skinner. “With unparalleled transport connections across London and beyond, the numerous amenities right on the doorstep, this development has so much to offer.”

The development is set to be located in Zone 1, Central London location of Paddington Basin. Paddington Exchange will be in close proximity to Paddington Station and gives easy access to Circle Line, Hammersmith & City Line, Bakerloo and District Lines via Paddington and Edgware Road.

The project will consist of 123 1-, 2- and 3-bedroom apartments. The developers remained tight-lipped about the details of the gross development value and built-up of the units. However, each unit comes with a dedicated external space via a terrace or balcony.

It will also offer facilities such as underground parking, a fully-equipped gym, along with community, retail and business space. An added feature of the development is its modern glass façade that will enable natural sunlight into the property.

Residents can enjoy the surrounding Paddington area, which is home to a number of stylish restaurants and exclusive shopping areas such as Bond Street. Moreover, they can enjoy the nearby recreational spots such as Hyde Park and Regents Park. Other nearby amenities include The Grey Coat Hospital and King Solomon Academy.

To exclusively market Paddington Exchange in Malaysia, C H Williams Talhar & Wong has been appointed the exclusive sales agent .

“We are pleased to announce the sale of this prestigious project in Malaysia” said deputy managing director Danny S K Yeo. “Paddington Exchange presents overseas investors with an exceptional opportunity to purchase within high quality development in an established, Central London Zone 1 location.”

An exhibition of the development will be held at the Westin Hotel Kuala Lumpur over the weekend.

An artist’s impression of Paddington Exchange, which will be in close proximity to Paddington Station.

 

This article first appeared in The Edge Financial Daily, on July 4, 2014.

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Sekitar26 Business has achieved 51% take-up since October 2013

PETALING JAYA: The Sekitar26 Business commercial hub in section 26, Shah Alam by Paramount Property (Shah Alam), a division of Paramount Corp Bhd, has seen a 51% take-up rate since its launch in October last year.

Sekitar26 Business has a gross development value (GDV) of RM211 million. It comprises 38 units of 3-storey semi-detached industrial units and a 3-storey detached industrial unit, on 13.2 acres (5.34ha) of freehold land. This commercial hub is the first phase of a wider development called Sekitar26.

“Sekitar26 Business has received positive feedback since its launch of 38-units of 3-storey semi-detached industrial units in October last year with 20 units being sold,” said Beh Chun Chong, deputy chief executive officer, Paramount Property Development.

Built up of units range from 8,689 sq ft to 8,704 sq ft while land dimensions for the units range from 65ft by 155ft to 88ft by 155ft. Prices per unit start from RM5,732,000 or RM570 psf. Paramount is banking on the ready catchment available in section 26 and sees it as a thriving place for business and a vibrant destination for leisure.

“The buyer mix consists of end-users and investors, with the majority of them being end-users who currently have businesses in nearby areas such as Puchong, USJ, Shah Alam and Kota Kemuning. These end-user buyers cited the strategic location with freehold status, easy accessibility, practical designs and soundness of Paramount’s reputation as reasons for choosing the development.

“The buyers will be bringing their current businesses to Sekitar26 Business. The business mix consists of trading businesses, agricultural trading, car showrooms, and furniture showrooms,” he said. “With buyers’ profiles consisting of serious buyers who purchase for their own business use, we are not relying so much on an investor market.”

These industrial units have a full glass frontage ideal for branded signature offices, showrooms and warehouses, according to Beh. Sekitar26 Business is scheduled for completion in the fourth quarter of 2016.

This article first appeared in The Edge Financial Daily, on July 4, 2014.
  
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De Centrum Unipark enjoys take-up rate of more than 50%

KAJANG: De Centrum Unipark Condominium, a freehold residential development in Kajang by Protasco Bhd, achieved a take-up rate of more than 50% in pre-sales since it started selling on June 28, according to group managing director Datuk Seri Chong Ket Pen at the unveiling of the condominium on Monday.


“Most of the buyers were first and second home-buyers,” he said. “We are contemplating to keep one block for ourselves to rent out just to students, but the demand for it is incredibly high and buyers are pressuring us to release it for sale.”  

The RM225 million De Centrum Unipark Condominium will comprise two 20-storey towers with a total of 240 single, 4-bedroom units and 80 duplex, 8-bedroom units. The built-ups are 1,297 sq ft and 2, 594 sq ft respectively.

The price of the single units starts from RM575,400 while that of the duplex units begins at RM1,064,950. “We geared it more towards students and families who wish to stay in this area, which explains our competitive pricing,” said Chong.

De Centrum Unipark will be located a short distance from the Infrastructure University of Kuala Lumpur (IUKL), where more than 4,000 students are enrolled, and is surrounded by three universities within the area with over 15,000 students.

“If you were to rent out to students, you could easily get about RM700 per room. The rooms are large enough to fit two beds so you could opt to charge RM500 per person, making it a total of RM1,000 per room,” said Luis Pazos, project communication consultant of the property development division.

Located at the intersection of the North-South Highway, South Klang Valley Expressway and Silk Highway, it allows for easy accessibility through an upcoming MRT station approximately 500 metres from De Centrum, as well as proposed walkways within the master plan itself.

Every bedroom in the condominium will be ensuite and each unit will be equipped with one designated parking bay. Duplex units have two car park bays, but residents will have the option to purchase an additional one at a cost of RM15,000. There will be a total of 500 parking bays.

Safety measures have been thoroughly taken into consideration with a new three-tier security system. Facilities will include a gym, swimming pool, and tennis and badminton courts.

The condominium will be a five-minute walk to De Centrum City Mall, a three-storey retail mall with a net lettable area of 150,000 sq ft.

The De Centrum Unipark Condominium is part of Phase 2 of Protasco’s 100-acre (40.5ha) De Centrum City in Kajang, which also includes a hotel, sports complex and stadium, and offices. The condominium is expected to be completed in December 2016.

“In 2013, our profit growth was about 23%,” said Chong. “So we hope that contribution from property to the overall group profit growth will grow from our 5% last year to 10% this year. By the time De Centrum City is completed, we hope property would’ve contributed to at least 25% of the overall profit, as we consider property and construction to be the main drivers of the profit growth.”

Chong (left), with his son Kenny, has the condo units priced competitively to interest their target market of students and families who wish to stay in Kajang.

This article first appeared in The Edge Financial Daily, on July 4, 2014.

Landmarks ready for the limelight

KUALA LUMPUR: Having kept a low profile since the acquisition of 338ha of resort development land on Bintan Island, Indonesia for RM769.12 million in 2008, Landmarks Bhd is now ready to step back into the limelight with the unveiling of Phase 1 of the integrated resort development known as Treasure Bay Bintan, which has a gross development value of US$650 million (RM2.08 billion).

Landmarks chief operating officer (COO) Fong Chee Khuen told The Edge Financial Daily that the initial facilities within Phase 1 of the development called Chill Cove include a RM65 million clearwater lagoon and a hotel featuring 40 chalet-like tents. These two facilities will be open for operations in the last quarter of this year.

By 2016, Landmarks will have fully developed the 90ha piece of land that has been allocated for Phase 1 which will include a wellness resort operated by well-known US spa operator Canyon Ranch, entertainment areas, bars, restaurants, aquatic sports facilities, retail areas, and at least eight hotels.

It has taken years for the Treasure Bay Bintan development to take shape.

Asked why, Fong said: “We do not want to be (just) another developer who builds the hardware. We actually spent a lot of time to study the market.”

Paul JH Leong, COO of the Treasure Bay Bintan, concurred.

“It has taken us a bit of time to analyse and then to react to make sure that Bintan has the right offering in terms of new products, features, games, food and beverage, and retail,” he said.

For one, instead of rolling out another typical property development and anchoring itself on property sales, Landmarks had opted to differentiate itself by offering health and wellness themed resorts to travellers by establishing joint ventures with international brands to drive visitor arrivals.

However, Leong said the group will now be more forthcoming about its Treasure Bay Bintan venture now that the development plans are “a bit more firm” and investors can expect future announcements on “who the hotel operators” and “joint venture (JV) partners” are.

To drive this development, Leong said there is no need for Landmarks, which is in net cash position, to raise additional funds as the group’s balance sheet has been managed carefully.  As at Dec 31, 2013, the group’s cash stood at RM115.4 million, while its borrowings stood at RM88.5 million.

Fong said Landmarks has to date secured hotel management contracts with international hotel brands such as Ibis Budget and Mercure and is now in advanced discussion with several five-star international hotel brands for management contracts.

Fong says completion of Phase 1 will add an additional 1,500 rooms to Bintan island

Fong said the completion of Phase 1 of Treasure Bay Bintan will add an additional 1,500 rooms to Bintan island’s existing 1,375 which will help solve the current shortage in hotel room supply. This bodes well for Landmarks as Bintan island now commands room rates from as low as S$160 (RM410) to S$1,000 a night and enjoys a healthy average occupancy rate of 65%.

“We need to compete with the likes of Bali, Phuket and to a certain extent Langkawi. For us to compete, Bintan has to offer enough rooms and enough scale for it to hold a major convention … We reckon that 5,000 rooms are at least a (good) starting number for the island to have to become a premier tourist destination,” Fong added.

Meanwhile, in a filing with Bursa Malaysia yesterday, Landmarks announced that its unit PT Treasure Development Services (PT TDS) has teamed up with Indonesia’s PT Ekasurya Mandiri (PT EM) to set up a concrete batching plant on Bintan island to supply concrete for the development of Treasure Bay Bintan, or to such other places in Indonesia as may be efficacious.

Under the deal, a joint venture entity named PT Pesona Lagoi Mandiri (PT PLM) will be formed to undertake the business of producing and supplying ready mix and dry mix concrete and mortar for use in construction works. PT TDS will have a 51% stake in the JV firm, while PT EM will hold the remaining 49%.

“The intended paid-up capital of PT PLM is 10 billion rupiah (RM2.68 million),” said Landmarks.

“The construction of the resort destination will require large amounts of concrete and the JV will ensure that the group will have adequate, timely and cost effective access to the construction material, tapping on the experience and expertise of a proven supplier,” it added.

Shares in Landmarks closed two sen or 1.82% at RM1.12 yesterday, giving it a market capitalisation of RM538.5 million.


This article first appeared in The Edge Financial Daily, on July 4, 2014.

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Sime Darby unlocking asset value through land sale

Sime Darby Bhd
(July 7, RM9.66)
Upgrade to outperform with target price of RM10.50: Sime Darby has announced that it is selling its freehold land in Sungai Buloh, Selangor for RM239.8 million to Eastern & Oriental Bhd (E&O). The 135-acre (54.6ha) tract will be carved out from the current 843 acres land owned by Sime Darby Elmina Development Sdn Bhd.

Currently, the land is meant for plantation purposes but Sime Darby will procure the relevant approval to convert its status to residential and commercial.

We gather that the land price of RM239.8 million includes RM192.8 million as cost of the land and RM47 million as cost of the major infrastructure.

Note that Sime Darby needs to construct the infrastructure (drains, main roads, incoming water and sewerage reticulation pipes, electricity and telecommunications cables) within 36 months.

The agreement between Sime Darby and E&O also states that the baseline gross development value (GDV) for the project is RM1.54 billion. If the actual GDV exceeds RM1.54 billion, Sime Darby is still entitled to 20% profit sharing on any GDV above the baseline GDV.

The deal is only expected to be completed in the first quarter of calendar year 2019 as it will take time for Sime Darby to get the land title converted and construct the infrastructure.

The deal is justified because it will enhance the combined branding and value of Sime Darby’s City of Elmina project, also located in Sungai Buloh.

Separately, The Wall Street Journal reported, quoting “people familiar with the process”, that Sime Darby had invited banks to pitch for a mandate to advise it on an initial public offering (IPO) of its automobile business, which is likely to raise about US$500 million (RM1.6 billion).

The Sungai Buloh land valuation works out to RM33 per sq ft (psf). We think this pricing fair as it is close to the current asking price of RM35 psf for nearby tracts of land. We are positive on this sale as it enables Sime Darby to unlock the value of its land bank while keeping the option to enjoy the upside of the project should the GDV exceed RM1.54 billion. Additionally, Sime Darby can still benefit through its 22% associate stake in E&O.

We believe that the sale of the land is targeted at realising the value of its property assets. In the mid term, we expect more corporate exercises involving Sime Darby’s property division and this could include a reverse takeover, merger and acquisition or even acquiring a real estate investment trust (REIT). There was speculation by the media that Sime Darby is looking to acquire a REIT into which it injects its commercial properties. Regardless of the eventual method Sime Darby chooses to realise the hidden value in its property division, we believe the group is now in the stage of unlocking the hidden value of most of its non-plantation divisions which we believe has caused its valuation to stay low against its peers.

In the past three months, Sime Darby has proposed four deals, all of which were related to the sale or reduction of its stake in its non-plantation divisions. If market talk of the motor division’s IPO materialises, it may be the fifth such deal.

We are positive about this direction as it should allow Sime Darby to emerge from the current value trap of being a conglomerate which usually commands lower price-earnings valuation (against pure plantation companies). — Kenanga Research, July 7


This article first appeared in The Edge Financial Daily, on July 8, 2014.

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