Klang Valley office rental under pressure for next 2 years
According to Knight Frank Malaysia, office rental growth in the Klang Valley is expected to be under pressure due to new supply of 10 million sq ft of space incoming over the next two years. Existing landlords of office buildings may have to put more effort to undertake asset enhancement measures via renovation, conversion or redevelopment to optimise returns from their properties. The Kuala Lumpur office market is expected to remain subdued this year and the tenant favoured market will continue into 2016 and beyond. As new supply comes into the market, existing landlords will need to listen to their tenants’ needs, and offer better facilities and maintenance services to maintain or improve occupancy levels. According to Knight Frank’s report, there is currently 92.5 million sq ft of office space in the Klang Valley. KL city rental rates averaged RM6.17psf; KL fringe area RM5.70psf and beyond KL the average rental was RM4.19psf. (The Malaysian Insider)
Encorp chosen as master developer for RM3.2bil Felda township
Encorp Bhd has entered an agreement with the Federal Land Development Authority (Felda) to nominate its unit Encorp Bukit Katil Sdn Bhd as the master developer for Felda’s integrated township in Bukit Katil, Melaka which has a GDV of RM3.2 billion. The 640.98-acre township will be launched in phases beginning early 2017, and expected to complete within 14 years. The project will comprise residential, commercial projects and public amenities. Felda had acquired a majority stake in Encorp in 2014, and used it as a property development vehicle to develop Felda’s vast landbank. (The Edge Markets)
Hap Seng to launch RM1.9bil projects in 2016
Hap Seng Land Sdn Bhd is planning to launch projects worth GDV RM1.9 billion in 2016, despite the weaker overall property market. The launches slated for the year include Aria (RM1.1bil), a high-rise residential project in Jalan Tun Razak, and another mixed development in Balakong (RM800mil). Aria will comprise 598 units of serviced apartments while the Balakong project will be 60% residential and 40% commercial. In spite of the weak local market, Hap Seng Land CEO David Khor said there had been more interest from foreign investors. (The Edge Markets)
E&O gets 3-year extension for Penang reclamation works
Eastern & Oriental Bhd (E&O) has been given three additional years to complete the reclamation works for phase 2 of the RM25bil Seri Tanjung Pinang development. Its indirect subsidiary Tanjung Pinang Development Sdn Bhd (TPD) and the Penang state government had inked a supplemental agreement, which stipulated the works be completed by Dec 31, 2022 instead of the original expiry of 2019. TPD had completed the reclamation of 240 acres under phase 1 in 2005 and is now working on reclaiming 760 acres under phase 2. (The Star Online)
Fututech targets at least RM500mil-RM600mil worth of jobs in FY16
Construction firm Fututech Bhd is tendering RM1.17 billion worth of jobs for FY16, and aims to secure a minimum of RM500mil to RM600mil. 80% of the tenders were from its three main clients – Eastern & Oriental Bhd (E&O), Eco World Group Development Bhd and SP Setia Bhd. The bulk of its current RM2.7bil order book is derived from the combined contracts off Kerjaya Prospek (M) Sdn Bhd and Permatang Bakti Sdn Bhd. Fututech had obtained the green light from its shareholders for the acquisitions of the entire equity interest in the two companies for a total of RM458 million. (The Star Online)
Regal International enters major land development deal in Sarawak
East Malaysian property developer Regal International Group has entered a project management and construction agreement with an independent third party to develop a 21.64-acre land in Bintulu, Sarawak, which has estimated GDV of over RM100 million. The project, Kemena Heights, will comprise residential units – 64 units of four-storey apartments and 32 units of four-storey apartment flats – along with retail and commercial units. Regal’s wholly owned subsidiary, Harbour Venture, will be the project manager and contractor, while the third party will be the project developer. (The Edge Markets SG)
Ecofirst Q2 profit jumps to RM11.74mil
Property developer Ecofirst Consolidated Bhd reported its net profit jumped to RM11.74 million in the second quarter (Q2), compared to RM150,000 previously. The group recorded a huge increase of RM9.5mil pre-tax profit for the current quarter at RM12.9mil compared to RM3.4mil in the previous quarter. The increase was due to reversal of over provision of tax penalties and interests. Its revenue for the second quarter rose to RM23.62mil against RM5.35mil in the same period a year ago. (The Star Online)
LTKM acquires 1.94-acre freehold land in KL for RM27.44mil
Poultry farming company LTKM Bhd is acquiring a parcel of freehold land measuring approximately 1.94 acres in Kuala Lumpur for RM27.44 million cash. Its subsidiary LTK (Melaka) Sdn Bhd has entered into a SPA with the vendors to acquire the land located in Mukim Petaling, Kuala Lumpur. LTKM said the purchase was part of its strategy to find investment opportunities and acquire landbank in order to unlock the value of the properties over the long term. (The Edge Markets)
F&N reviewing plan for PJ Land
Fraser & Neave Holdings Bhd (F&N) is reviewing the redevelopment plan of its land in Section 13, Petaling Jaya. It had allocated over RM300 million in capital expenditure (capex) for FY16 and FY17. CEO Lim Yew Hoe said the review of the development scheme is to maximise the value of the land and to suit current property market conditions. F&N will invest RM45 million in a new polyethylene terephthalate (PET) manufacturing line at its Shah Alam to meet growing demand, especially during peak festive seasons. It’s new Rojana plant in Thailand is also part of the RM300mil capex. (The Sun Daily)
