Titijaya acquires Penang land to develop RM2.6 bil development

May 29th, 2015 No comments

Titijaya Land Bhd obtained shareholders’ approval to acquire about 23 acres of leasehold land in Batu Maung, Penang to build a mixed-use development after its extraordinary general meeting (EGM) here today. The land is located within 1.5km from the Sultan Abdul Halim Mua’dzam Shah Bridge (the Second Penang Bridge).

The mixed-use development will be built by Titijaya Land’s wholly-owned subsidiary, City Meridian Development Sdn Bhd and is the group’s first development outside of the Klang Valley.

“The property market in Penang is highly competitive, but we believe that the demand for residential and commercial properties in Penang is expected to remain favourable among local and foreign buyers,” deputy group managing director Lim Poh Yit (pictured, right) told reporters after the EGM.

The land acquisition will be satisfied via a cash consideration of RM126 million in bank borrowings and internal funds.

The newly acquired landbank will be used to develop a proposed mixed-use development with a gross development value (GDV) of about RM2.6 billion. The proposed development, which is yet to be named, will offer about 1,700 small office, home office units across four blocks, retail components and four office towers.

According to GDP Architects Sdn Bhd’s associated partner Hairul Afzahizan Osmayati (pictured, below), the development will be built in three phases.

“We phased out the developments into three [phases]. The first phase will have two residential blocks with retail and shops; Phase 2 will be the remaining retail and two residential blocks. The last phase will be [all four] office [towers],” said Hairul. GDP Architects is the appointed master architect for the whole project.

Lim said: “We plan to launch Phase 1 this year. It will be either year-end or early next year, which is our launching schedule.” He added that the first phase will have an estimated GDV of RM600 million.

Lim is aiming to obtain approval from the authorities to develop the project by early next year.

After the land acquisition, Titijaya Land has 432.47 acres of landbank throughout Malaysia.

“We believe that this acquisition will expand our development activities in the future, which will contribute positively to the group’s future financial performance,” Lim added.

Source: TheEdgeProperty.com

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Eco World to launch first Penang project next month

May 28th, 2015 9 comments

Eco World Development Group Bhd (EcoWorld) is expected to launch its first project in Penang, Eco Terraces condominium, in mid-June.

“Apart from being the first project for the group in the northern region, we believe Eco Terraces will also set new standards in high-rise living here,” EcoWorld president and CEO Datuk Chang Kim Wah said in a statement.

Eco Terraces will be located on Jalan Paya Terubong. The project should be about a 25-minute drive from Georgetown and approximately 15 minutes’ drive from the First Penang Bridge and Queensbay Mall. Eco Terraces is scheduled for completion in the second quarter of 2019 (2Q2019).

“For Eco Terraces, we have already started improving the infrastructure by upgrading part of Jalan Paya Terubong leading into the development,” said Chang.

The 12.79-acre freehold project offers 333 units in a 33-storey block. The units have a built-up area ranging from 1,095 sq ft to 2,008 sq ft. They come in layouts of 3-bedroom and 2-bathroom units and 4-bedroom and 3-bathroom units. Indicative prices are RM846 psf. Maintenance fee is estimated at 36 sen psf.

The gated condominium offers facilities such as a multipurpose hall, karaoke room, golf simulation room, indoor badminton or tennis courts, barbeque area, swimming and wading pool, gym, aqua gym, jogging and cycling tracks.

Chang added that the developer’s show gallery — EcoWorld Gallery @ Macalister along Jalan Anson — has a “3D walkthrough” experience of Eco Terraces to help visitors to understand what the condominium has to offer. The 3D walkthrough will run for a month from May 22.

Eco World said it has accumulated 5,245 acres of landbank, with RM65 billion worth of gross development value remaining.

Through the group’s associates, there are developments lined up for launch this year in Leamouth Peninsula, London (London City Island, GDV: £617 million [RM3.45 million]) and Parramatta, Sydney (Weat Village, GDV: A$285 million [RM802,641]). The former will be launched in Malaysia this weekend while the latter will be launched in 2H2015.

Source: TheEdgeProperty.com

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Penang Island vs Mainland (Part 4) – Population

May 28th, 2015 9 comments


Population growth comprises two basic components – the natural population growth (birth and death), and the non-natural population growth (relocation), which by contrast may occurs quickly and unexpectedly.

With natural population growth, developers can react accordingly to the market demands. They are able offset anticipatable demand by providing more supply. On the other hand, a non-natural population growth may be unpredictable. Underreacting to that unexpected demand will drive up house prices.

So what does this mean for the property market in Penang?

Penang overall population has been growing steadily at around 2 percent per year for the past two decades and will continue to do so as the state has been going through a notable transformation. The figure below shows the population distribution between island and mainland for the year of 1991 and 2012 (latest available data).


FIGURE 1: Penang population distribution 1991 vs 2012


Clearly, the share of population living in the island has shrunk moderately over the years. By 2012, only 45.8 percent of the population lived in the island, compared to 48.7 percent in 1991. This is mainly attributed to the relocation of people from island to the mainland for cheaper houses and employment opportunities.

While the 2.9 percent population shift may seem insignificant, the dramatic change in growth patterns between 2008 and 2012 should not be overlooked (Figure 2). Most notably, the 4.9 percent average annual growth in southern part of Seberang Perai was the highest annual growth recorded among all districts since 2000. The trend is likely to sustain as the rapid economic development in Batu Kawan continues bringing enormous opportunities into the region.


FIGURE 2: Average annual population growth rate


With the extensive population growth channeling into the southern part of Seberang Perai, the quick demographic change will strongly influence the nature of demand for housing in the coming decades.

Perhaps the most debated question at present – Will Mainland ever be at the same level as the Island in terms of branding and property value? I don’t think anyone has a definite answer to this question. Instead, one should ask in response, “Why is it necessary to be the same?”

Market Price [to be covered in Penang Island vs Mainland (Part 5)]

Penang Island vs Mainland (Part 1) – Location branding
Penang Island vs Mainland (Part 2) – Land scarcity or abundant?
Penang Island vs Mainland (Part 3) – Connectivity & accessibility

- Ken Lim
(Founder and Principal Reviewer, PenangPropertyTalk.com)

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Avenue Garden @ Pearl City

May 27th, 2015 No comments

Avenue Garden Serviced Apartment, the upcoming high-rise development by Tambun Indah in Simpang Ampat, Penang. It is strategically located in the heart of Pearl City township development, just a stone’s throw away from the GEMS International School.

This development comprises a 17-storey service apartment (312 units) with 5 level of multi-storey car park.

More details to be available upon project launch.

Property Project : Avenue Garden
Location : Pearl City, Simpang Ampat, Penang
Property Type : Service apartment
Total Units: 312
Tenure : Freehold
Indicative Price : (open for registration only)
Developer : Tambun Indah

Location Map:

Street View

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Slow quarter for E&O

May 27th, 2015 No comments

Maintain “hold” with revised target price of RM2. Excluding exceptional items of RM103 million, E&O’s fourth quarter financial year 2015 (4QFY15) core earnings came in at only RM3.4 million.

This takes FY15 core profit to RM43 million, which is significantly below consensus’ and our projection as we had earlier expected a much stronger quarterly profit.

E&O completed two blocks of the Andaman Condominiums project in Seri Tanjung Pinang (STP) during the quarter, which saw a 38% year-on-year (y-o-y) drop in revenue to RM143 million.

A first and final dividend per share in the form of one treasury share for every 50 E&O shares has also been proposed, resulting in 3.7 sen per share.

Meanwhile, net gearing rose to 60% due to the acquisition of Landmark House and Thames Tower in London for £57 million (RM310 million).

On outlook, E&O has achieved RM940 million sales in FY15 driven by its projects in Johor, the Klang Valley, Penang and the United Kingdom. Launches in the pipeline in financial year 2016 (FY16) include those of Avira Garden Terraces Phase 2 and 3, Tamarind Executive Apartments@STP Phase 2, as well as the Conlay project.

The tender for the STP2 reclamation was completed on May 11, 2015 and a tender interview will be conducted on May 29 for the four bids which will be followed by the reclamation contract award. E&O is expected to finalise its long-term strategic partner for its STP2A’s 253 acres (102.38ha) within six months, given the high capital requirement for the massive reclamation works.

E&O has announced that its UK property arm will pursue a listing on the AIM of the London Stock Exchange this year to grow its franchise via a local platform.

It is expected to reduce its holdings in E&O UK to below 50%, though it will remain the single-largest shareholder of E&O UK. This is estimated to reduce E&O’s net gearing to 30% after the de-consolidation.

We have now imputed slower property sales in view of the cautious sentiment. We note that E&O’s inventory has increased to RM208 million in FY15 from RM75 million in FY14. This could be attributed to the completed units at Andaman Condominiums.

The risks include the STP2 reclamation requiring heavy capital spending, given the huge area involved. Future phases will likely need joint-venture partners or rights issue.

With the Penang and Johor state governments imposing additional restrictions on top of Budget 2014, this could discourage foreign buyers to whom E&O has a large exposure. — AllianceDBS Research, May 26

Source: TheEdgeProperty.com

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