Key takeaways from The Edge Investment Forum on Real Estate 2016

Think City injects new life into Kuala Lumpur with curated events and performances

A meeting with a banker would probably be all about the numbers. This also seems to ring true for former bankers, like Paramount Corp Bhd group CEO Jeffrey Chew. During his interview with City & Country recently, he started off with a presentation of the company’s financial performance, before going on to highlight numbers from the National Property Information Centre.

Growth in average prices was more significant among the more affordable properties. The top performer by relative average price growth was Kelana Impian, with prices up 21.8% to reach RM341 psf in the 12 months to 1Q2015.

MRCB-Quill REIT’s first quarter of financial year 2016 (1QFY16) gross revenue of RM32.7 million, up by 75.5% year-on-year (y-o-y), was translated into a normalised net profit of RM15.24 million (84.1% higher y-o-y), accounting for 26.2% and 26.8% of Hong Leong Investment Bank Research and consensus full-year forecasts respectively. There were no dividends in the quarter as its dividends are usually declared semi-annually.

S P Setia Bhd has announced its acquisition of a 1.02-acre (0.414ha) piece of freehold land for a purchase consideration of A$101 million (RM302 million). The land was secured via a competitive bidding exercise from Telstra Corp Ltd, Australia’s leading telecommunications company. The land cost makes up 16% of the project’s gross development value (GDV) of A$640 million, which seems higher compared with S P Setia’s previous transactions of Parque Melbourne in St Kilda Road and Fulton Lane in 2010 and 2011 at around 10% of GDV.

Construction firm-turned-property developer Johawaki Development Sdn Bhd will launch Phase 3 of its landed development, Avanti Residences, on May 7. The final phase will offer 38 semi-detached homes with built-ups of 3,090 sq ft, on a 3,200 sq ft plot. The semidees are priced from RM1.49 million onwards.

Today, we continue our focus on Kelana Jaya by looking at average prices on a per square foot (psf) basis. Based on transactions analysed by TheEdgeProperty.com, the average price of non-landed homes in the area has remained steady at RM431 psf in 1Q2015.

Assuming the same placement price of RM1.30 for all tranches, EcoWorld is expected to raise up to RM768.4 million. Out of this, RM468 million (61% of gross proceeds) is targeted for the subscription of EcoWorld International Bhd’s (EWI) initial public offering (IPO). This is followed by RM297.7 million (or 39%) for future land acquisitions.

Pavilion REIT’s core asset is the 1.3 million-sq ft net-lettable-area (NLA) Pavilion Kuala Lumpur mall, located strategically in the heart of the Bukit Bintang shopping district in Kuala Lumpur. The premium profiling and location have led to a strong average rental rate of above RM20 per sq ft, as well as justified its premium valuation over other large-cap Malaysian REITs.