The mission identified potential business in the construction of resorts, residential, commercial buildings, highways, maintenance and repair services and, tiling works.

MATRADE Chief Executive Officer Datuk Noharuddin Nordin said, " We are very confident that many of the identified construction projects will be translated into actual deals although the global construction sector is experiencing significant slowdown.

"But Vietnam remains a significant beacon of opportunity for Malaysian construction companies".

Private sector participants in the mission included those from the construction and professional services sector such as civil engineering, formwork designs and systems, structural enhancement, maintenance and waterproofing services, architectural services, interior design, construction and legal consultancy and, wall and floor tiles installation services.
Currently, Malaysian contractors are already actively involved in the several construction projects in Vietnam including the Quang Tri Airport, My Thuy Deep Sea Port, Dong Ha Railway, Hanoi Yen So Park and the Hanoi Waste Water Treatment plant.

MATRADE mounted the specialised marketing mission to Danang City and Hanoi, Vietnam, between Aug 17 and Aug 21, to provide an effective platform for the Vietnamese business community to know more about the capabilities and international track record of Malaysian companies.

Members of the mission had direct business discussions with their Vietnamese counterparts through 73 one-on-one business meetings.

BERNAMA

President K. Soma Sundram said the 2,213sq ft office space located on the fifth floor of a building at the 3 Two Square commercial hub in section 19 of Petaling Jaya, Selangor, was bought for RM695,000 with savings and contributions from its members and well wishers.

These include RM125,000 raised from the Malaysian real estate convention last year, RM218,000 from members, contributions of RM100,000 from OCBC Bank (M) Bhd and RM50,000 from American International Assurance Bhd, and donations of RM18,000 by David Ong of Reapfield Properties Sdn Bhd, RM15,000 from O&L Real Estate, and many others.

He said the office premises, which incurred renovation costs of RM120,000, is currently estimated to be worth close to RM1 million.

According to him, MIEA had the idea of having its own premises since the eighties but it was aborted due to recession and the fact it had just a little over RM60,000 then until 1991, when Datuk Leslie Lee Kim Guan of New Bob Realty Sdn Bhd initiated a building fund with an initial contribution of RM500.

And the rest, like they say, is history.

With its own premises, he said MIEA can now conduct training sessions for real estate negotiators as well as carry out research and development and other activities in a more conducive environment.

He added MIEA plans to introduce an examination programme for negotiators who want to enter the real estate selling profession, in a move to reduce the number of illegal ones.

It also intends to have a “black book for bad tenants” to weed out those who abuse the law by not paying rent as well as.

Property News

Chief executive officer Wan Azman Wan Salleh said: “If all goes well, we can embark on these projects with our strategic partners.”

Wan Azman declined to comment further on the revamp plan. The group has not made money in seven years and could possibly have its shares taken off the stock exchange. The group recorded a loss of RM9.2 million on revenue of RM1.5 million for the financial period ended 31 May 2008.

Putera Capital has closed its loss-making textile division and has decided to focus on the construction and infrastructure business. It currently holds a 20 per cent stake in West Coast Expressway, a multi-billion ringgit project which has not begun.

The group is also engaged in a partnership with Melewar Industrial Group Bhd to construct a proposed RM2.2 billion monorail system in George Town, Penang. Wan Azman said the group remains hopeful of the project, for which it is still waiting for response from the state government.

Putera Capital bids for RM9b jobs despite financial troubles

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The development, due for completion in 2012, comprises two 38-storey residential towers known as Iskandar Residences and a 28-storey serviced apartment known as Oakwood Residence Johor operated by Oakwood Asia Pacific Ltd.

The project was unveiled by IIB through its subsidiary Kota Selat Tebrau Sdn Bhd, in a joint venture with Danga Bay Sdn Bhd.

Oakwood Residence Johor is positioned to cater to short and extended stays for execu­tives from multinational corporations and expatriates relocating to Johor Baru due to its strate­gic location and luxury branding.

“As the catalytic developer for Iskandar Malaysia, we hope the unveiling of this development will attract international property investors, expatriates and young and trendy professionals in the locality.

“It is a great achievement and we hope to provide our prospective investors with more investment opportunities in the coming months,” IIB managing director Arlida Ariff said during the second Iskandar Malaysia Information Day here recently,

When completed, the project will be an icon in Iskandar Malaysia offering residents and tourists with convenient modern city living, an urban waterfront resort lifestyle and expand the variety of accommodation available for holidaymakers to Johor.

“We are happy to showcase this project and are confident it will help bring an international community to Iskandar Malaysia and build the region as Asia’s first world city,” Kota Selat Tebrau chief executive officer Datuk Lim Kang Hoo said.

To date, IIB has attracted RM4.2bil in investments from Middle Eastern partners for the development of Medini, its integrated hub in Iskandar Malaysia.

To date, Iskandar Malaysia has garnered RM40.25bil in investments

Waterfront developments in Danga Bay unveiled

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The key issue in the design was the relationship to the waterfront. The buildings on the boulevard reinforce the alignment of the boulevard but to enhance the visual corridors and links between the boulevard and the lakefront the architects broke the massing into smaller components of varying heights. The buildings are unified by tropical roof gardens.

Transparent and light layered buildings along the waterfront will create a sense of place that is uniquely tropical and reinforces Putrajaya as the garden city.

Sustainable strategies like terraces, sunshades, natural ventilation and integrated green space, between the buildings, are included in the design.
A light brise-soleil skin connected to the vertical pillars protects each unit and controls the amount of daylight coming in without compromising the expansive lake views.

To bring life to the area, public activities such as cafés, restaurants, fashion boutique will be located at ground and mezzanine levels. Offices, boutique hotels, and apartments will also help create a lively and vibrant environment.

Expected completion: 2010

Manfredi Nicoletti
Studio Nicoletti + Hijjas Kasturi Associates
Studio Nicoletti
Coordination: Manfredi Nicoletti, Luca Nicoletti
Architect in charge: Luca Maugeri
Design team: Pasquale Onorato, Daniele Altana
Energy consultant: Thomas Lefevre – Hoare Lea
Hijjas Kasturi Associates
Architect in charge: Amir Hamzah
Project: Serina Hijjas

arcspace.com

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• HIJJAS KASTURI PUTRAJAYA

“In view of the slowing economy, we reposition our development to suit the market demands,” Lim told StarBiz. “We (downsized) the development because we anticipated that the retail mall business would be tough going forward.”

Lim said the decision would also “lighten up” the company’s cash position, adding that the project’s profit margin could be maintained at 25% to 30% of sales value.

“Magna Prima is able to retain a healthy profit margin because we may not keep any of the assets in the amended RM600mil (project),” he said, revealing that the company had planned to retain 45% to 55% of the original project.

As of end of October, the group had RM230mil in unbilled sales.

The Magna City will have over 1.6mil square feet of net floor area while the construction is targeted to commence in the middle of 2009.

It sits on 10.23 acres of freehold land comprising 67 units of lifestyle shop offices, two levels of retail lots, two levels of corporate offices and 800 units of service apartments.

Magna City project to be downsized

EU ambassador Vincent Piket said the Forest Law Enforcement Gover- nance and Trade Voluntary Part- nership Agreement (VPA) would essentially assure EU member countries that Malaysian timber products were sourced legally.

He said Malaysia was set to become the first country in Asia to work such a trade deal that would give the country a comparative advantage.

“Plantation Industries and Commodities Minister Datuk Peter Chin realises the benefits of the VPA for the Malaysian timber sector,” said Piket after meeting timber industry officials here yesterday.

Malaysia’s timber exports to the EU amount to some RM2.5bil annually and Sabah’s share is about 20% to 25%.

Piket said negotiations were now focused on Malaysia’s legality assessment on how its timber is produced.

“The system is good but there are still improvements to be made,” he said.

Citing an example, he said that when a forest plantation licence was granted, environmental issues needed to be addressed such as the need for an environmental impact assessment.

“Transparency is the key word in such matters,” Piket said.

Malaysian timber set to get easy access into EU

Works Minister Datuk Mohd Zin Mohamed said his ministry had so far paid out RM44.2mil as part of the permitted variation of price (VOP) for 270 projects with calculations being made for the remaining 1,041 projects.

He also said that the ministry has expanded the VOP to a total of 15 construction materials from the current five.

“We have also allowed mechanical and electrical work for VOP if the work scope includes civil engineering and building construction,” he told reporters Wednesday after attending a briefing for contractors during his working visit here.

Besides Johor, he noted the ministry had also approved VOPs for its projects in Malacca and had since paid out RM7mil to contractors here.

Meanwhile, Mohd Zin said that a total of 406 projects totalling RM9.4bil would adopt the Industrial Building System (IBS) with 189 of the projects having been tendered out.

He said that a total of 121 projects under the IBS would be tendered out between 2009 and 2010.

He added that the Government would continue adopting IBS in a move to reduce dependency on foreign labour while improving the efficiency of the nation’s construction industry.

“Our dependence on foreign labour is extremely high at present with some estimated 2.2 million being employed with only 315,000 of them registered,” he said, adding that the workers sent at estimated RM780mil per month or RM18bil per year back to their respective countries.

With the IBS blueprint in place, he said the country hopes to reduce foreign labour in the construction industry to 250,000 by 2015.

Contractors allowed to revise project costs

On Tuesday, Perwaja Holdings Bhd and Choo Bee Metal Industries Bhd announced they had provisions of RM120.2mil and RM22.3mil respectively in the third quarter for impairment in the value of their inventories.

Other steel companies are likely to announce a similar provision when releasing their results.

An analyst at a bank-backed brokerage said it would be inevitable for steel makers to make that kind of provision as global steel prices had fallen significantly.

The plunge, which started in July, was sparked by weakening demand for steel products during a global economic crisis. Reduced material costs also mean lower selling prices of steel products.

China, which produces a third of the world steel supplies, saw output declining by 17% in October. Steel prices in India have plunged by about one third since July and halved from the beginning of this year.

Aseambankers said data from WorldSteel showed a 12.4% year-on-year and 7% month-on-month fall in global steel production in October due to falling demand. China’s economic stimulus package, although positive, may face a lag before implementation.

Additionally, it was still uncertain if the pump-priming efforts would generate sufficient demand, especially in the first half of next year, it said.

The analyst said, while the inventory issue would impact profitability in the short term, the greater concern currently was demand.

The global credit crisis has resulted in tighter lending, and infrastructure projects, in particular, are bearing the brunt.

“Stockists are throwing stocks at bargain prices but even buyers with deep pockets will be careful in spending in the current environment,” he said, adding that some buyers were willing to pay a penalty for cancelling earlier orders rather than collecting stocks with a diminishing value.

He said the catalyst for price recovery was to spur demand via fiscal stimulus, of which a number of governments had already announced.

OSK Investment Bank, in a report, said Malaysia Steel Works (KL) Bhd (Masteel) was able to liquidate stocks easier than its peers because of its small size and ability to keep inventory cycle short.

“While Masteel did not provide for diminution in inventory value, some of the losses are already reflected in the lower EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 9.9% against 17.1% in the preceding quarter,” it said.

Steel companies make provisions

However, as the economy faces tough challenges in view of the current global financial crisis, the local property market has also experienced a general slowdown. The consensus among property developers is that times would be “bad” next year, although few would admit it openly.

Some developers who joined the office market craze in Petaling Jaya in the past few years may be lucky as they have managed to complete their projects and sold or tenanted out most of their office and retail spaces.

These are the new generation strata office developments where some of them have retail components. They are mainly found along the Federal Highway (mostly purpose-built integrated offices like PJ City, PJ8) and in Section 13, 14 and 19 like Jaya 33, Jaya One, The Quill 9 and 3 Two Square.

Affluent townships like Bandar Utama and Taman Tun Dr Ismail (TTDI) are also seeing several new office projects (Menara Surian next to Ikano Power Centre and three in Bandar Utama City Centre viz Plaza IBM, KPMG Tower and 1, First Avenue. With Bandar Utama being awarded the MSC Cybercentre status in October, it would enhance the value of properties there).

Ken Group is also planning to build an office block in TTDI.

Coming up in the Kampung Kayu Area is 10 Boulevard and nearby, just after the Damansara toll plaza is the new Merchant Square.

There are many more being planned or under construction.

Those that have just been launched or just completed may face an uncertain future. This may be partly due to a softening market that is expected to get worse next year.

Although oil prices have dipped recently, there are still fears that it might jump next year, causing another round of fears and uncertainty. The global financial “tsunami” may hit our shores hard next year.

Meanwhile, a rough poll shows that generally the office market in Petaling Jaya, especially for the new developments, are holding up fairly well.

Businesses today want to be seen as progressive and not holed up in some old shop houses. They do not mind paying a premium to own or rent offices that are well located and have lots of amenities.

S K Brothers Realty Sdn Bhd general manager Chan Ai Cheng points out that employees are also choosy in not only who they are working for, but also where they work, as in location.

“An interesting thing while marketing 3 Two Square is that we noticed that businesses were moving out of the older shop offices and shop houses to new developments as their former image had made it difficult for them to hire staff, much less retain them. Young graduates today are looking at working in fine offices, and places with a nice address plus extra perks. It reflects the changing times,” she says, adding that many companies who had their roots in Petaling Jaya were also reluctant to relocate elsewhere.

SK Brothers, she says, is one such company that had bought office space in 3 Two Square which is very near its former office in Paramount Garden that it had been operating since 1979.

“When we bought our office space in 3 Two Square, prices were around RM260 psf to RM280 psf but it has since gone up. We transacted a unit at 3 Two Square early this year for RM315 psf. Recently, we transacted another office space just above our unit at RM380 psf. Office rental rates there are in the region of RM2.30 to RM2.70 psf,” says the daughter of SK Brothers founder Charlie Chan.

Chan says she has a friend who bought a unit at 3 Two Square a few months before completion and managed to almost immediately rent out her unit to a pharmaceutical company; for a year now, she has been enjoying rental returns of close to 10% per annum.

Chan says her company’s decision to buy a unit in 3 Two Square was based on factors such as accessibility, matured neighbourhood, track record of the developer, ample car park bays and unique features including its wide frontage lots with a minimum of 28ft for high advertising exposures.

She said Quill 9 at Jalan Semangat which is due for completion soon has BMW as its ground floor tenant. Developed by the Quill Group, it has big floor plates of 20,000 sq ft to 50,000 sq ft with rentals from RM4.30 psf.

“All these new developments are a welcoming change for residents of Petaling Jaya. I have lived in PJ all my life and in the early days there was only Jaya Supermarket and the Right Angle in Section 14,” she adds.

“Today with Jaya One, Jaya 33 and others, residents have more choices in terms of dining and shopping, As more companies relocate their offices here, it has also enabled PJ residents to find jobs nearer their homes. PJ people can now work in PJ and this has helped to reduce traffic jams and improve people’s life,” she adds.

Instead of developing traditional type shop houses, developers have differentiated themselves with new products and concepts.

For example, Jaya 33 has a hyper office concept, VSQ (pronounced as V Square) has corporate offices with serviced apartments, 3 Two Square is marketed as hybrid shop offices while Jaya One in Section 13 (along Jalan Universiti) has a mix of stand alone office block, and restaurants designed in courtyard styles.

The new projects along the Federal Highway include the newly completed PJ8, PJ City and fairly new Menara LYL.

A 6-storey office block with two basement car parks is under construction two lots from Menara LYL. These, along with Menara Axis, Crystal Plaza and the row of motor showrooms (Mercedes-Benz, Chevrolet, Mazda, Ssyangyong, VW, Naza World, Subaru and Ford on the opposite of the highway) are transforming this part of Petaling Jaya into a vibrant office cum retail hub.

BizWeek