property developer

 
 

11MP mid-term review neutral to property

KUCHING: The 11th Malaysia Plan (11MP) mid-term review last week proved to be ‘neutral’ to the property sector, analysts note, given the lack of impact on public listed property developers. According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the 11MP mid-term review is neutral to the property sector as the […]


Chinese electric car makers now look for way out of glut

HANGZHOU, CHINA: Humming away in an industrial estate in the eastern Chinese resort city of Hangzhou, electric vehicle designer Automagic is one of hundreds of companies looking to ride the country’s wave of investment in clean transportation. The company wants to find a niche in a crowded sector that already includes renewable equipment manufacturers, battery makers […]


Exchange 106 – low occupancy ‘worrying’

PETALING JAYA: The committed occupancy of Exchange 106 Tower at TRX has fallen drastically to 10%, which is a concern amidst a subdued office market, said UOB Kay Hian.

“We understand that the Exchange 106 Tower is slated for completion by early 2019 and its first tenant will occupy the space in May 2019. However, we are concerned about its committed occupancy which has fallen drastically to 10% currently, compared to 50% pre-GE 14,” it said in its report today.

“With a persistently subdued office market (evidenced by low occupancy rates for office buildings in Kuala Lumpur), securing tenants will remain a key challenge for the TRX project which also faces competition from newer projects such as the PNB 118 and Bukit Bintang City Centre,” it added.

It noted that other ongoing office tower projects such as the Prudential HQ office is almost completed while two other office towers namely the HSBC Head Office and Affin Bank Head Office are under construction and both expected to be completed by end of 2020.

Meanwhile, the National Housing Policy 2.0, which is expected to be revealed in November or December, will benefit property developers who are focused on building houses below RM500,000.

“The new housing policy presents slight optimism for the sector as it is expected to tackle the high property prices and ease lending requirements – particularly for first-time home buyers,” said UOB Kay Hian.

The Ministry of Housing and Local Government has emphasised that it will address several issues including lowering house prices by reducing compliance cost and implementation of industrialised building systems.

In addition, the federal government is also working closely with state governments on land issues whereby the latter have been asked to submit a list of potential land plots that can be used for affordable housing projects.

“Potential measures that are proposed for the new housing policy include the extension of a maximum loan tenure to up to 40 years and to provide various types of loan structures like flexi loans, flexi interest rates and step-up schemes.

“These hybrid measures provide better flexibility for homeowners to own houses, and allow young homebuyers to own a house once they join the workforce,” said UOB Kay Hian.

At present, the maximum loan tenure is 35 years or until the borrower turns 70 years old, whichever is earlier.

Moving forward, the research house said that affordable housing will remain the key focus of developers. This is reflected by the rise in launches of residential properties priced below RM500,000, which grew from 52% of total launches in 2H17 to 65% in 1H18 as reported by the Real Estate and Housing Developers’ Association Malaysia.

“Separately, the association also outlined a few suggestions to encourage provisions of affordable housing which includes reduction of development charges, lower land conversion premium and exemption of capital contribution,” it said.

The Valuation and Property Services Department recently reported an increase of 18.1% in unsold and completed homes to a new record high of 29,277 units in 1H18, with majority of the overhang units being high-rise residences priced between RM500,000 and RM1 million.

“In view of this, we think that property developers that focus on the affordable housing segment may continue to report decent earnings while developers that focus on the premium market may face risk of slower take-up rates and their margins could be compromised,” said UOB Kay Hian.

It maintained “market weight” on the property sector and maintained “buy” calls on Malaysian Resources Corp Bhd and Gabungan AQRS Bhd. For exposure to the affordable housing theme, it prefers Mah Sing Group Bhd, on which it has a “hold” call and target price of RM1.23.


Exchange 106 – drastic drop in committed occupancy ‘worrying’

PETALING JAYA: The committed occupancy of Exchange 106 Tower at TRX has fallen drastically to 10%, which is a concern amidst a subdued office market, said UOB Kay Hian.

“We understand that the Exchange 106 Tower is slated for completion by early 2019 and its first tenant will occupy the space in May 2019. However, we are concerned about its committed occupancy which has fallen drastically to 10% currently, compared to 50% pre-GE 14,” it said in its report today.

“With a persistently subdued office market (evidenced by low occupancy rates for office buildings in Kuala Lumpur), securing tenants will remain a key challenge for the TRX project which also faces competition from newer projects such as the PNB 118 and Bukit Bintang City Centre,” it added.

It noted that other ongoing office tower projects such as the Prudential HQ office is almost completed while two other office towers namely the HSBC Head Office and Affin Bank Head Office are under construction and both expected to be completed by end of 2020.

Meanwhile, the National Housing Policy 2.0, which is expected to be revealed in November or December, will benefit property developers who are focused on building houses below RM500,000.

“The new housing policy presents slight optimism for the sector as it is expected to tackle the high property prices and ease lending requirements – particularly for first-time home buyers,” said UOB Kay Hian.

The Ministry of Housing and Local Government has emphasised that it will address several issues including lowering house prices by reducing compliance cost and implementation of industrialised building systems.

In addition, the federal government is also working closely with state governments on land issues whereby the latter have been asked to submit a list of potential land plots that can be used for affordable housing projects.

“Potential measures that are proposed for the new housing policy include the extension of a maximum loan tenure to up to 40 years and to provide various types of loan structures like flexi loans, flexi interest rates and step-up schemes.

“These hybrid measures provide better flexibility for homeowners to own houses, and allow young homebuyers to own a house once they join the workforce,” said UOB Kay Hian.

At present, the maximum loan tenure is 35 years or until the borrower turns 70 years old, whichever is earlier.

Moving forward, the research house said that affordable housing will remain the key focus of developers. This is reflected by the rise in launches of residential properties priced below RM500,000, which grew from 52% of total launches in 2H17 to 65% in 1H18 as reported by the Real Estate and Housing Developers’ Association Malaysia.

“Separately, the association also outlined a few suggestions to encourage provisions of affordable housing which includes reduction of development charges, lower land conversion premium and exemption of capital contribution,” it said.

The Valuation and Property Services Department recently reported an increase of 18.1% in unsold and completed homes to a new record high of 29,277 units in 1H18, with majority of the overhang units being high-rise residences priced between RM500,000 and RM1 million.

“In view of this, we think that property developers that focus on the affordable housing segment may continue to report decent earnings while developers that focus on the premium market may face risk of slower take-up rates and their margins could be compromised,” said UOB Kay Hian.

It maintained “market weight” on the property sector and maintained “buy” calls on Malaysian Resources Corp Bhd and Gabungan AQRS Bhd. For exposure to the affordable housing theme, it prefers Mah Sing Group Bhd, on which it has a “hold” call and target price of RM1.23.


Chinese electric car makers, nurtured by state, now look for way out of glut

HANGZHOU, Oct 17 — Humming away in an industrial estate in the eastern Chinese resort city of Hangzhou, electric vehicle designer Automagic is one of hundreds of companies looking to ride the country's wave of investment in clean transportation….


Ideal United Bintang shares rise on news of corporate exercises

PETALING JAYA: Ideal United Bintang International Bhd’s (IUB) share price rose as much as 8 sen this morning after it announced a slew of corporate exercises involving property acquisition and a private placement.

The stock rose as much as 8 sen or 6.56% to trade at a high of RM1.30 from its last adjusted closing price of RM1.22. At 11.36am, it was 6 sen or 4.92% higher at RM1.28 with 708,400 shares done. The stock was one of the top gainers in early trade.

Yesterday, the group announced the acquisition of three property firms for RM353.08 million, a private placement to raise up to RM200.47 million and the subdivision of its existing one share to two shares.

IUB said the proposed acquisition of property firms represents an opportunity for the group to bolster its portfolio of development projects and enhance its profile as a property developer.

The private placement is expected to raise gross proceeds of up to RM200.5 million, which will be used to fund several projects while the share split is expected to improve the liquidity of its shares with a higher share base.


Ideal United Bintang to raise up to RM200.47m, buy three property firms

PETALING JAYA: Ideal United Bintang International Bhd (IUB) yesterday announced a slew of corporate exercises involving the acquisition of three property firms for RM353.08 million, a private placement to raise up to RM200.47 million and the subdivision of its existing one share to two shares.

In a filing with the stock exchange, the group said it had entered into a sale and purchase agreement with executive chairman Tan Sri Ooi Kee Liang and his wife Puan Sri Phor Li Wei, who is also the executive director, in a related party transaction to acquire Modular Platinum Sdn Bhd, Ideal Homes Properties Sdn Bhd and Premium Flame Development Sdn Bhd for RM202.03 million, RM117.91 million and RM33.15 million, respectively.

IUB said the proposed acquisition represents an opportunity for the group to bolster its portfolio of development projects and enhance its profile as a property developer by participating in more projects which are profitable.

The private placement, which entails the issuance of up to 393.08 million new shares representing up to 30% of its issued shares, is conditional upon the proposed acquisition.

Based on an indicative issue price of RM1.02 per placement share, the private placement is expected to raise gross proceeds of up to RM200.5 million, which will be used to fund the Imperial Grande, Amarene and Mori as well as Imperial Ville projects.

The private placement is also aimed at mitigating the non-compliance of the minimum public spread.

Meanwhile, the share split is expected to improve the liquidity of its shares with a higher share base.

Upon completion of the share split, IUB's resultant issued share capital will be RM463.56 million comprising 927.11 million subdivided shares.


The push and pull of housing prices

It has been over a month now since the Sales and Services Tax (SST) was reintroduced in lieu of our former Goods and Services Tax (GST), and all eyes are now on the housing sector as eager Malaysians await for a potential reduction in housing prices. According to the Pakatan Harapan government, the main reason […]


Forget about 2018, developers more optimistic about 2019

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PETALING JAYA (Oct 12): Property developers are more optimistic about the Malaysia property market outlook in the coming year than the current second half of 2018. According to the latest Real Estate and Housing Developers’ Association (Rehda) Property Industry Survey 1H18, only 18% of the 152 Rehda members who took part in the survey were optimistic about the property market in 2H18. However, when asked about 1H19’s outlook, 39% of the respondents believe the market will be better, 44% were neutral while 17% were pessimistic. Meanwhile, 41% respondents were optimisticRead More


Residential property overhang worsens

KAJANG: The overhang status of residential properties in Malaysia worsened in the first half of 2018 (1H 2018), with 29,227 units worth RM17.24 billion, reflecting a year-on-year increase of 18.1% and 10.2% in volume and value respectively.

According to the Property Market Report for First Half 2018 published by the Valuation and Property Services Department (JPPH), the majority of overhang properties were condominiums and apartments priced between RM500,000 and RM1 million.

“Condominiums and apartments contributed the most to the overhang status with 11,602 units representing 39.7% of the total overhang,” said JPPH director-general Nordin Daharom.

Speaking to reporters at the launch of the report today, Nordin said Johor remained the state with the highest number of overhang units with 5,988 units or 20.5% of the total overhang. The overhang in Johor stood at 3,803 units a year ago.

This is followed by Selangor at 4,694 units and Penang at 3,958 units. A year ago, the overhang in these two states stood at 3,664 units and 2,041 units respectively. Kuala Lumpur’s residential overhang stood at 2,350 units compared with 746 units a year ago.

For small office home office (Soho) and serviced apartments, the overhang jumped by 84.4% to 12,771 units from 6,927 units a year ago while industrial properties saw a 2.2% increase in overhang units to 1,021 units from 999 units a year ago.

Shops were the only sub-sector that saw an improvement in overhang status with a 4.4% reduction in overhang to 4,348 units from 4,546 units a year ago.

The residential sub-sector continued to drive the overall market with 62.8% market share and 46.7% in value. However, this sub-sector recorded a 0.8% drop in volume to 94,202 units from 94,969 units a year ago while value fell 3.6% to RM31.66 billion from RM32.48 billion a year ago.

The number of new residential launches declined 7.1% to 37,723 units from 40,615 units a year ago while sales performance was low at 19.2% compared with 22.4% a year ago.

The house price index rose to 189.5 points in the second quarter of 2018 from 186.3 points a year ago, with the average price rising 1.7% to RM408,774 from RM401,905 a year ago.

Overall, the property market recorded a 2.4% drop in volume of transactions to 149,889 units from 153,526 units a year ago, while value of transactions fell 0.1% to RM67.74 billion from RM67.83 billion a year ago.

In terms of loans, applications and approvals for residential properties fell 3.1% and 0.2% respectively year-on-year. However, loan applications and approvals for non-residential properties increased by 14.2% and 6.6% respectively.

Note that commercial and industrial were the only two sub-sectors that bucked the trend, with 3.5% and 3.8% increase in volume of transactions respectively during the period.

Despite the improvement in the commercial sub-sector, Nordin noted that the occupancy rate of the office and retail sectors fell to 82.8% and 79.9% respectively, from 83.3% and 79.9% respectively a year ago.

As at end-June, existing office space stood at 21.62 million sq m from 2,502 buildings while incoming supply stood at 68 buildings with 2.48 million sq m of space.

“I must emphasise that both issues, residential overhang and commercial space vacancy are pertinent issues that must be addressed by all parties, particularly local authorities and property developers. Both must exercise due diligence before arriving at development decision to avoid oversupply situation,” said Nordin.

Based on preliminary data from the third quarter of 2018, he said the property market is expected to stabilise in the second half of the year, with minimal movement of less than 1%.