Week 36 - 2023
BNM KEEPS OPR AT 3%, SEES INFLATION MODERATING IN 2H23
The Edge & The Sun Daily, 07/09/2023
Bank Negara Malaysia (BNM) has decided to keep the overnight policy rate (OPR) at 3%, amid robust domestic demand supported by strong labour market conditions. This is the second time the OPR has been maintained at 3%, after keeping the rate unchanged in July. The central bank had raised the OPR by 25 basis point to 3%, from 2.75%, back in May. Continued employment and wage growth, especially in domestic market-oriented sectors, improved tourist arrivals and spending, investment activity supported by further progress on multi-year infrastructure projects, and the implementation of catalytic initiatives under the recently announced national master plans are factors that will support the economy’s growth momentum in 2024.
TRANSNUSA’S MAIDEN JAKARTA-JOHOR FLIGHT LANDS AT SENAI AIRPORT TODAY
The Edge, 07/09/2023
PT TransNusa Aviation Mandiri (TransNusa), an Indonesian premium carrier, is making headlines again as its inaugural flight from Jakarta land at Senai Airport, Johor. This expansion comes after the airline had just introduced its first international route from Jakarta to Malaysia’s bustling metropolis, Kuala Lumpur less than five months ago. With the introduction of its Kuala Lumpur route on 14 April 2023, TransNusa transitioned from a domestic commercial airline to an international commercial airline. The airline plans to operate one daily flight from Jakarta to Johor.
LION INDUSTRIES SELLS TWO PARCELS OF LAND IN BANTING FOR RM92 MILLION
The Edge, 04/09/2023
Lion Industries Corp Bhd is selling two parcels of land, measuring 26.8 acres in Kawasan Perindustrian Olak Lempit, Banting, for RM92.03 million in cash. The disposal came after the group scrapped its plan to buy 80 acres of agricultural land in Sepang for RM23 million a month earlier. The group had signed two conditional share and purchase agreements with Unichamp Mineral Sdn Bhd, which is engaged in the trading of lime-based products, on 1 September 2023. Lion Industries, via its 99%-owned unit Amsteel Mills Sdn Bhd, is selling 19.8 acres of land to Unichamp Mineral for RM67.96 million, while its wholly owned unit Gelora Berkat Sdn Bhd is disposing of 7.0 acres of land for RM24.07 million. The proposed disposals are expected to be completed by the 1Q26.
IGB REBRANDS THE BOULEVARD MID VALLEY CITY AS ST GILES BOULEVARD
The Edge, 04/09/2023 & NST, 05/09/2023
IGB Group Bhd has rebranded and reopened The Boulevard Mid Valley City as St Giles Boulevard on 31 August 2023. St Giles Boulevard, which is part of the Mid Valley City mixed-use integrated development in Kuala Lumpur, is 28 storeys high and comprises 390 rooms. Meanwhile, Cititel Hotel Management Sdn Bhd, the hotel manager for The Boulevard, will continue to manage St Giles Boulevard. The hotel was closed in 2021 due to the Covid-19 pandemic. During the closure, the hotel undertook a RM18 million refurbishment programme to upgrade its guestrooms and public facilities with a fresh new look, as well as overhaul all plumbing, electrical and air-conditioning systems to meet global efficiency standards.
SINGAPOREAN MEGROUP’S MALAYSIAN UNIT ACQUIRES BALAKONG PROPERTY FOR RM16.2 MILLION
The Edge, 06/09/2023
Singaporean MeGroup’s Malaysian subsidiary Menang Nusantara Sdn Bhd (MNSB) has acquired a property at Lot 16, Jalan 3, Kawasan Perusahaan Cheras Jaya at Balakong, Selangor for RM16.2 million. A sale and purchase agreement (SPA) was entered into between MNSB and the vendor, Ngai Ming Plastic Industries (M) Sdn Bhd. The 99-year leasehold property is on industrial land that measures some 52,399 sq. ft. The lease will expire on 30 December 2098. The buildings on the property include a single storey detached factory with a three-storey office annexed with an estimated built-up area of approximately 39,826 sq. ft. In connection with the entry into the SPA, MNSB has entered into a tenancy agreement with Ngai Ming Plastic Industries, under which MNSB will be granted a tenancy of the property for a period of one year at a rental of RM80,000 per month. The tenancy will end upon completion of the acquisition of the property, following which MNSB will be the property’s legal and beneficial owner. MeGroup says it intends to expand its existing manufacturing facilities at the property. It also intends to relocate some of its management, sales, finance and human resource operations that are currently located at its main manufacturing plant at Balakong, to the new premises.
ECOWORLD BUYS 403.78 ACRES OF LAND IN SENAI FOR OVER RM211 MILLION CASH
The Edge, 06/09/2023
Eco World Development Group Bhd (EcoWorld Malaysia) is acquiring 403.78 acres of land in Mukim Senai, Johor, to develop a business park to be known as Eco Business Park VI, for RM211.07 million cash. The group, via its wholly-owned unit Eco Business Park 6 Sdn Bhd entered into a conditional sale and purchase agreement with IOI Prima Property Sdn Bhd to buy the land. IOI Prima Property is a 99%-owned unit of IOI Properties Bhd. The purchase consideration is calculated at the rate of RM12 per square foot and arrived at on a willing buyer-willing seller basis after considering the prospects of the land, in view of its readily available connectivity to highways and population catchment, as well as development potential into an industrial development. The original land area is approximately 406.86 acres. A portion of the land, about 3.07 acres has been reserved by the relevant authorities ROW (road reserve) straightening. The group plans to develop the land into a business park to be known as Eco Business Park VI catering to medium and light industrial businesses. With the addition of the new land, the group’s total industrial landbank increased to 2,416 acres, of which 1,647 acres is situated in Iskandar Malaysia. EcoWorld Malaysia will have five sizable industrial parks, comprising four in Iskandar Malaysia and one in Selangor. The group said it is set to benefit from the positive news flow surrounding Iskandar Malaysia given that it has numerous township projects there, namely Eco Botanic, Eco Botanic 2, Eco Spring and Eco Summer as well as Eco Tropics.
PARAMOUNT CORP PLANS TO LAUNCH PROPERTY PROJECTS WORTH RM700M IN 2H23
The Edge, 06/09/2023
Paramount Corp Bhd said it expects to report stronger earnings for the second half ending 31 December 2023 (2H23), driven by new launches and ongoing efforts to improve its return on assets. The group, which recorded property sales of RM617 million in 1H23, has planned property launches worth RM700 million in gross development value for 2H23. The Klang Valley make up 76% of unbilled sales, with the remaining 24% coming from Kedah and Penang. Projects in the pipeline include The Ashwood, a high-rise residential property in Kuala Lumpur with 312 condominium units and duplexes, and 12 units of low-rise villas, on 3.59 acres of freehold land. Other projects include the Greenwoods Amaria, Salak Perdana. In the northern region of Sungai Petani, the property player is set to launch the Bukit Banyan landed residential, and affordable landed homes.
YTL HOSPITALITY REIT BUYS STRIPES HOTEL FOR RM138M CASH IN RELATED PARTY DEAL
The Edge, 06/09/2023
YTL Hospitality Real Estate Investment Trust (YTL Hospitality REIT) is acquiring Hotel Stripes Kuala Lumpur, Autograph Collection for RM138 million cash. Maybank Trustees Bhd, as the trustee for the REIT, inked a conditional sale and purchase agreement with the vendor, Hotel 25 Sdn Bhd to buy the property for RM138 million. Hotel Stripes Kuala Lumpur, Autograph Collection is a five-star hotel, located along Jalan Kamunting in Kuala Lumpur. Hotel 25 (formerly known as Dynamic Property Management Sdn Bhd), which is principally engaged as a hotel operator, is an indirect wholly owned unit of YTL Corp Bhd. The hotel will be leased back to Hotel 25 for an initial term of 15 years, with an option to renew the lease for another 15 years. On the rationale of the proposed acquisition, YTL Hospitality REIT said the exercise is in line with the group’s investment objective to continuously acquire and invest in high-quality hospitality properties in Malaysia and internationally. The lease agreement will provide the REIT with fixed rental payments from the lessee, with a step-up provision of 5% for every five years. As such, the proposed lease is expected to contribute positively to future distributable income and distribution per unit of the REIT after taking into consideration, among others, the additional income received from the lease arrangement and estimated borrowing costs.
FIAMMA PAID RM109M FOR APPROVAL TO DEVELOP LAND ALONG JALAN YAP KWAN SENG
The Edge & NST, 07/09/2023
Fiamma Holdings Bhd said it has paid RM109.65 million for an alienation land approval to develop a 1.88 acre land along Jalan Yap Kwan Seng. The leasehold land, which is located near to Fiamma’s existing 1.4 acre land along the same road, will be used for mixed development split between residential (20%) and commercial (80%), it added. The group’s existing 1.4-acre land is proposed for the development of residential properties. It also has a 2.6-acre land along Jalan Sungai Besi.
SOUTH KOREA’S NX3 GAMES PLANS TO OPEN REGIONAL HEADQUARTERS IN KL
The Edge, 07/09/2023
South Korean video game company NX3 Games intends to expand its wings in Malaysia and is expected to open its regional headquarters in Kuala Lumpur by next year. NX3 Games in Malaysia will focus on three units: game publishing, research and development, and content design.
MAH SING TO FORM JV COMPANY TO VENTURE INTO INDUSTRIAL REAL ESTATE DEVELOPMENT
The Edge, The Star & NST, 07/09/2023
Mah Sing Group Bhd’s units have signed a shareholders’ agreement with The South Sea Capital Sdn Bhd (TSSC) to form a joint venture (JV) to venture into industrial real estate properties development. Mah Sing’s wholly owned subsidiaries Nova Legend Development Sdn Bhd (MS1) and Jastamax Sdn Bhd (MS2) signed the agreement with TSSC, to jointly carry out the business relating to industrial real estate property development, land acquisition, ownership, operation, management, and leasing through a JV arrangement. MS1 and MS2 will hold 50% and 20% equity interest respectively in the JV company, named Mah Sing South Sea Industrial Development Sdn Bhd. TSSC, which is principally engaged in activities of holding companies, will hold a 30% stake. To date, Mah Sing has completed the development of five industrial parks. These are Mah Sing Integrated Industrial Park in Mutiara Subang, iParc in Bukit Jelutong, iParc 2 in Shah Alam, iParc 3 in Bukit Jelutong, and the Mah Sing iParc at the port of Tanjung Pelepas.
IREKA PARTNERS PROPERTY DEVELOPER FOR RM310 MIL GDV MIXED DEVELOPMENT
The Edge, 04/09/2023 & NST, 05/09/2023
Ireka Corp Bhd has joined hands with a property development and construction outfit for a mixed development project in Kajang, with a gross development value of RM310 million. Ireka’s wholly owned subsidiary Regal Variety Sdn Bhd inked a joint venture agreement with Elay Project Sdn Bhd to develop the project, which entails 22 and 23 storey towers that will consist of 661 units of service apartments, 48 units of retail and 114 units of office space. The development is expected to commence end 2023 and be completed in six years. The project is to be developed on a 177,787 sq. ft. freehold vacant land in Bandar Kajang, which is owned by Regal Variety.
WHAT’S WHETTING INVESTORS’ APPETITE FOR MENARA MAYBANK
NST, 05/09/2023
Appetite towards Menara Maybank has increased since Malayan Banking Bhd (Maybank) announced its relocation to Merdeka 118, the world’s second-tallest building, owned by its largest shareholder, Permodalan Nasional Bhd (PNB). Menara Maybank, a 55-storey skyscraper in Pudu, Kuala Lumpur began construction in 1984 on Court Hill, and was completed in 1987. Maybank had entered into a 21-year tenancy arrangement with PNB, which included a three-year initial term and six three-year renewal agreements for Merdeka 118. According to the conditions of the tenancy agreement, the monthly gross rent is RM10.60 per square foot, subject to modification after the first two terms or six years. Maybank will occupy 33 floors of Merdeka 118 and has been granted naming and signage rights to the structure. All current Menara Maybank offices will be relocated to Merdeka 118 in stages, beginning in 1Q25. Also relocating to Merdeka 118 are selected Maybank subsidiaries currently based in Dataran Maybank, including Maybank Islamic, Maybank Investment Bank, and Maybank Asset Management. The total occupancy of 650,000 sq. ft. at Merdeka 118 will be less than its current net lettable area of 1.09 million sq. ft. at Menara Maybank. Before this, Maybank had relocated some 1,500 employees to Mercu Maybank, located at i-City in Shah Alam, Selangor, to improve its business continuity management and resilience planning. Mercu Maybank (formerly known as Menara Sumurwang) was unveiled on 7 April 2022, and the employees began moving in gradually. Meanwhile, Menara Maybank had entered into a 10-year lease deal with PNB to lease the property to PNB on a triple-net basis, which means that PNB will bear all Menara Maybank expenses, including maintenance, insurance, and all taxes.
CLMT TO SELL 3 DAMANSARA OFFICE TOWER TO LAGENDA PROPERTIES FOR RM52MIL
The Edge, 05/09/2023
CapitaLand M Trust (CLMT) will see the disposal of 3 Damansara Office Tower, which it acquired in 2015, to Lagenda Properties Bhd for RM52 million. Net proceeds of RM50.5 million from the sale will be used to repay borrowings, which will reduce CLMT’s gearing to 43.5%, from 44.1%. CLMT owns eight other properties, comprising six retail and two logistics properties strategically located across three key urban centres in Penang, Klang Valley and Pahang.
TOURISM MALAYSIA: CHINA A KEY MARKET
The Edge, 04/09/2023
Malaysia is aiming for a total of 16.1 million tourist arrivals and RM49.3 billion in receipts this year, with China as a key market. China remains one of the top market sources for Malaysia with 211,363 arrivals to the country in 2022. Ammar said the resumption and introduction of new international flight routes between Malaysia and China had enhanced connectivity, with 203 flights per week currently operating between the two countries.
DOUBLETREE BY HILTON IN PUTRAJAYA TO REVIEW PRICES
NST, 05/09/2023
The DoubleTree by Hilton Putrajaya Lakeside may review its pricing strategy in reaction to rising operating costs. The 290 room hotel’s current room rates begin at RM330. The hotel is experiencing a good increase in MICE business, which is being driven mostly by team-building-related events from Klang Valley region corporate companies and training series. Domestic and international travellers from Southeast Asian countries, China, Japan, South Korea, northern Europe, and North America remain their target market. DoubleTree by Hilton Putrajaya Lakeside, which is owned by Idaman Putrajaya Sdn Bhd, is a four-block hotel that was launched in 2021. Only two blocks were built due to lengthy construction delays caused by the Covid-19 outbreak. The hotel initiated a soft opening for the first two blocks in October 2021 and the construction of the remaining two blocks is currently underway. However, the hotel has completed its refurbishments of the rooms, the main restaurant (Makan Kitchen), the Koffee Lounge, the Executive Lounge, and the meeting rooms. Additional features were added, including the new splash water park, kids club, games room, and arcade room.
GOVERNMENT APPROVES RM500 MILLION FOR FIRST PHASE OF SULTANAH AMINAH HOSPITAL INFRASTRUCTURE PROJECT
The Edge, 04/09/2023
The allocation of RM500 million for the first phase of the infrastructure development project at Sultanah Aminah Hospital (HSA) has been approved. The project included the construction of a multi-storey car park, as well as several new high-rise blocks in HSA. The multi-storey car park will be built soon, with the construction process to begin this year.
STRONG DEMAND FOR FIRST PHASE OF IDEAL CAPITAL’S PTP PROJECT
The Edge, 04/09/2023
Ideal Capital Bhd has signed sales and purchase agreements (SPAs) with 23 local and foreign companies to occupy about 35% of the first phase of the Penang Technology Park (PTP) in Bertam. Based on the current market price of RM65 and RM90 per sq. ft. for industrial properties in North Seberang Prai, the sales will generate about RM500 million or 12% of PTP’s gross development value (GDV). Some 20 other companies will be signing SPAs with the group over the next two months. PTP’s occupancy would reach over 40% when these companies signed. The signed investors hailed from countries such as China, Germany and Japan. They are involved in electronics assembly, component manufacturing, metal fabrication, medical devices, trading, and the warehouse and logistics business. Ideal Capital will explore more vacant land in Seberang Prai to launch more industrial park projects.