UEML-Khazanah JV for RM5b project

UEML-Khazanah JV for RM5b project

Cindy Yeap of theedgeproperty.com

Khazanah spearheading development of Desaru as tourist destination


KUALA LUMPUR (June 12): UEM Land Holdings Bhd (UEML) is taking a 51% stake in a proposed high-end residential resort development in Desaru, Johor, with an estimated gross development value (GDV) of RM5.4 billion. The project is in collaboration with Khazanah Nasional Bhd's subsidiary Desaru Development Corp Sdn Bhd (DDC), which will own 49% of the venture.

UEM Land said in a statement on Monday that the land for the proposed 20-year development — 25 parcels totalling about 678.7 acres — will be acquired from DDC for a total of RM485.3 million. The acquisition and development of the land will be undertaken by three joint-venture entities that are 51:49 owned by UEM Land and DDC.

"The proposal is in line with UEM Land Group's continuous effort in sourcing new landbank and property development opportunities to improve and sustain its long-term earnings growth," the statement read.

The price tag for those land parcels is just a shade under the market valuation of RM485.7 million by independent valuer Asettz Sdn Bhd (formerly known as Colliers Jordan Lee & Jaafar Sdn Bhd), UEM Land said in the statement.

A payment of RM48.6 million, being 10% of the price tag, is to be paid immediately to the vendor, with another 10% due within 12 months. The remaining 80% will be paid in instalments, staggered bi-annually over 4½ years from the second year onwards.

Subject to the necessary approvals, the proposed development, which surrounds two golf courses, is targeted to commence by 2013. To be positioned as an exclusive high-end residential resort development, it will comprise bungalows, semi-detached houses, link homes, townhouses and serviced apartments or condominiums as well as a beach club.

UEM Land will provide RM97.1 million in shareholder advance to the JV entities, at 0.5% above the prevailing base lending rate, to cover the first 20% of the purchase consideration. The remaining capital requirements, future development costs and working capital will be funded by a mix of bank borrowings, internal funds, further shareholder advances or an issuance of redeemable preference shares.

UEM Land will also provide project and development management services to the JV entities at a rate of 2.5% of the total development costs, and provide marketing and sales services for 1.5% share of the sales revenue.

Khazanah, through DDC, is spearheading the development of Desaru as an international tourist destination. The completion of the 27km Senai-Desaru Expressway in June 2011, which cuts travel time between Johor Baru and Desaru, is expected to be a catalyst for the area's development, the group said.

This story appeared in The Edge Financial Daily on June 12, 2012.
















Nagamas gets PDP role for RM1b project

Syarina Hyzah Zakaria of theedgeproperty.com


KUALA LUMPUR (June 12): Nagamas International Bhd's wholly-owned subsidiary Nagamas Venture Sdn Bhd has secured a project delivery agreement to develop a new township in Perak with an estimated gross development value (GDV) of RM1 billion.

In a filing with Bursa Malaysia on Monday, the group said it was appointed the project delivery partner (PDP) by Xtreme New Sdn Bhd, the project owner and the counter party to the agreement, to develop a 204.6ha township comprising commercial and residential properties in Kinta, Perak.

Xtreme New had earlier entered into a joint venture agreement with the land owner, Syarikat Majuperak Bhd, a subsidiary of Majuperak Holdings Bhd, to develop the township.

Nagamas Venture will be responsible for both construction and non-construction aspects of the project. "The agreement is expected to enhance the earnings of the group for FY12 ending Dec 31 as the proposed development is expected to commence in 4Q12," it said in a statement.

As the PDP, Nagamas will develop the conceptual plans and designs as well as arrange for funding and financing, management and administration of sales and marketing, on top of constructing the development.

In return, Nagamas will be entitled to 80% of the total GDV of the project while both parties — Xtreme New and the group — have agreed to ensure that a minimum gross development cost of RM200 million is achieved.

For 1Q ended March 31, Nagamas posted a net loss of RM824,000, almost four times the loss of RM215,000 a year ago. Revenue fell 42.14% to RM2.65 million from RM4.58 million.

This story appeared in The Edge Financial Daily on June 12, 2012.













Gamuda's 9M results to meet our forecast, trail consensus

theedgeproperty.com

Gamuda Bhd (June 11, RM3.45) — Maintain market perform with fair value RM3.78


Gamuda Bhd (June 11, RM3.45)

Maintain market perform with fair value RM3.78: We expect Gamuda's 9MFY12 core net profit to come in at RM355 million to RM365 million, which will meet our forecast but trail market expectations.

At RM355 million to RM365 million, 9M core net profit will have grown 19% to 22% y-o-y, underpinned largely by: (i) stronger construction profit on improved margins driven by more stable input costs; and (ii) stronger property profits underpinned by recorded property sales over the last one to two years on the back of a property upcycle.

We do not expect Gamuda's 3Q construction margins to substantially deviate from the normalised level of 10% to 15% at the earnings before interest and tax (Ebit) level, taking a cue from the continued normalisation in margins of peer IJM Land Bhd in its just released January to March 2012 results, thanks to the comparatively stable input cost environment.

We maintain our forecasts. Risks to our view include: (i) The Klang Valley MRT project being delayed or scrapped; (ii) Gamuda getting a smaller role in the Klang Valley MRT project; and (iii) rising input costs.

We are less enthusiastic on construction stocks as we believe their share price performance is likely to be capped over the next 6 to 12 months as the market begins to price in a higher risk premium for construction stocks ahead of the general election that will have to be held by March 2013.

Indicative sum-of-parts fair value for Gamuda is RM3.78, valuing its construction business at 14 times 1-year forward earnings, in line with our 1-year forward target price earnings ratio for the construction sector of 10 to 14 times, and its operations in Vietnam on a discounted cash flow basis. — RHB Research Institute, June 11

This story appeared in The Edge Financial Daily on June 12, 2012.



















Off to paradise

Joanne Nayagam of theedgemalaysia.com


THERE is something to be said about that first getaway as husband and wife. Each couple will have a specific preference for the type of getaway they would like, with romance a high priority. There are plenty of options available around the world, but it's always an added treat when a honeymoon vacation is not only private and luxurious, but also unique.

On that note, luxury hotel and restaurant group Relais & Châteaux is now offering romantic hideaway options for newlyweds in China and Bali, from the Himalayan foothills of Yunnan to Indonesia's "Island of the Gods". The retreats encompass what seems to be the complete package, with a chance to customise each experience and the promise of unique lifetime memories.

These four destinations are some of the 518 unique holiday retreats made available by Relais & Châteaux, which prides itself on offering some of the most special places to travel to worldwide.

More details on the various packages made available by Relais & Châteaux as well as their prices can be found on the group's website www.relaischateaux.com.

Jingmai Brilliant Resort & Spa, Yunnan
The Jingmai Brilliant Resort & Spa is set amid the largest tea garden in the world. Honeymooners can explore the surrounding villages and historic tea plantations and gardens. Couples can even pick their own tea and create a special commemorative blend, as well as visit tea workshops and attend a "teaism" show. Then comes the pampering session which is both unique and invigorating. The resort's spa offers exclusive signature treatments such as tea garden relaxation therapy and Tea Fazenda Therapy.

There is also a romantic dining experience included in this package. Couples can choose between a tea menu and a barbeque at the poolside. The latter seems like the ideal way to spend the evening: underneath a blanket of stars with an amorous setting that is complete with candlelight and champagne.

If all of these items don't already seem like the total honeymoon package, the hotel even offers a Buddhist marriage blessing ceremony.

JE Mansion, Beijing
Another Chinese getaway from Relais & Châteaux, JE Mansion offers the option of a wedding ceremony. A wedding can be held at the mansion's Chinese style banquet hall, which seats up to 500 guests, or the party can be taken outside, where there is a romantic outdoor lawn suitable for ceremonies of various styles and sizes. Contrasting the Yunan retreat, this honeymoon destination is located in the pulse of Beijing's commercial and business district. Chinese culture is evident throughout the hotel. The spaces are decorated in classical style, featuring carvings in wood, brick and stone as well as calligraphy and a warm colour palette.

Villa Mathis, Bali
If you opt to travel to Bali, try Villa Mathis, encompassing four villas set in a 1.2ha estate that is surrounded by rice plantations.

The retreat has a very intimate setting, given the purpose of its construction. Its French-speaking owners, Bruno and Lilka, initially built the villa for their close friends, but eventually decided to open their doors to guests, who are now welcomed like old friends.

There are 17 rooms here, with four swimming pools, a restaurant and a spa to spend time at.

There are also a number of activities to do during the stay. The "Romantic & Honeymoon" packages available include activities such as a two-hour horse ride through rice fields and on beaches at sunset, a two hour Balinese Boreh treatment and a whole day trip to Ubud, complete with a personal driver and tour guide in tow. For a little bit more excitement, the management can organise a whole day elephant safari and rafting expedition along the Ayung River. Otherwise there are mountain bikes available to explore the surrounding areas.

Pavilions Bali, Bali
The Pavilions Bali retreat is another option, located near picturesque Sanur Beach. This is one of Bali's oldest fishing villages, and here couples will have the best seats to beautiful sunsets. The villas offer plenty of privacy as each villa comes with a pool and walled garden, where they may choose to have a traditional Balinese blessing ceremony and exchange vows in front of a small gathering of family and friends. Packages can be customised for each couple and include a romantic candlelit dinner, a three-hour joint pampering session and two excursions of the couple's choice.

This story appeared in The Edge Financial Daily on June 12, 2012.