Impiana to invest RM200m in new Malaysian, Thai hotels
 Hotelier Impiana Hotels & Resorts will invest some RM200 million over the next three years for new hotels in Malaysia and Thailand. The hotels will be within the Klang Valley, in Tioman, Pahang, and in Phuket, Thailand. Chairman Datuk Seri Farouk Abdullah, in a recent interview with Business Times, said it is now building 12 luxury private villas with individual pools, in Kata Noi, Phuket at a cost of RM40 million. To be ready by end-2009, the Kata Noi hotel is expected to garner between RM3,700 per night for a 1,200 sq ft villa to RM5,500 per night for a 2,500 sq ft suite. In Malaysia, Impiana group is keen to run a four-star or five-star hotel in Petaling Jaya, Selangor or in Bangsar, Kuala Lumpur and it has budgeted RM100 million for this. "We are in talks with a few people, but it is still preliminary," he said. And if it cannot find a suitable property, it will look at building a hotel at one of the two locations it has identified. He expects to fund the purchase of building with internal funds and borrowings. "We are working towards raising the funds," he said. Meanwhile, Farouk said Impiana may also develop up-market villas in Tioman island. "We are looking at Tioman. We have 10 ha of land there. We are looking at 30 to 40 units of luxury villas," Farouk said, adding that this could cost between RM50 million and RM60 million, excluding land. Hotels under the group with the Impiana brand are Impiana Resort Cherating, Impiana KLCC Hotel & Spa, Impiana Koh Samui and Impiana Phuket Cabana Resort. Impiana is also buying the Impiana Casuarina Ipoh, which it has been managing for two years, for RM44 million from Perak Corp Bhd. The hotel, now rated as a three-star, will undergo a RM5 million makeover to be upgraded to a four-star property and help garner a higher room rate of RM230 and occupancy of 75 per cent. Meanwhile, Farouk said that is still in talks to buy between 20 per cent and 25 per cent stake in Impiana KLCC from its owners Heritage Lane Sdn Bhd. By Business Times (by Vasantha Ganesan)
Impiana aims to have 20 hotels under its wings by 2015
MALAYSIAN owned and operated Impiana Hotels & Resorts hopes to have 20 hotels under its ambit by 2015, says its top official. It plans to either own, manage or do a combination of both for these hotels that could be in Malaysia or abroad. The group, with a hotel presence in Malaysia and Thailand, hopes to make inroads into the Middle East market by end-2010. "We hope that in the next two to three years we are able to sign 10 management contracts," chairman Datuk Seri Farouk Abdullah said. "Businessmen from the Middle East have approached us, we should be there (in the Middle East) next year to manage hotels," he told Business Times. There are five hotels under the Impiana brand now, and a sixth - Impiana Kota Noi will open in December 2009. On where else it would like to see the Impiana hotel brand, Farouk said that it would also like to be in Krabi and Bangkok in Thailand. The group's hotel operation now enjoys a gross operating profit (GOP) of 30 per cent with its hotels in Thailand enjoying between 43 per cent and 45 per cent in GOP. GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus the cost of operations. The five hotels contributed some RM80 million in revenue last year. Given the current economic environment and the Influenza A (H1N1) flu, Impiana projects that its performance in 2009 will be the same as in 2008. In 2010, revenue from hotel operations is expected to improve by a tenth. The Impiana group is part of the KAB Group. Hotel operations and property development each contribute 40 per cent to total group revenue. By Business Times
SunCity sees strong recovery
 Artist’s impression of Sunway Opus Grand in HyderabadPETALING JAYA: Sunway City Bhd (SunCity) is looking at a strong recovery from the dampened sales inflicted by the global financial crisis and plans to move on with its planned property projects both locally and abroad. According to SunCity managing director for property development Ngian Siew Siong, the local property market had not been too badly impacted by the global crisis and it should recover quite fast.  Ngian Siew Siong ... ‘With the country’s economy expected to bounce back next year, property demand should also move in tandem.’
“Demand for property is a function of economic growth and, with the country’s economy expected to bounce back next year, property demand should also move in tandem with the higher market confidence,” he said.
For the fourth quarter ended June 30, SunCity’s property sales showed a strong rebound of 120% to RM88mil from RM40mil in the previous quarter.
The stronger sales were mainly due to improving consumer sentiment and the launch of the “Triple Z Series” promotion in April.
Sunway SPK Villa Manja’s semi-detached residences showed a stronger take-up with RM57mil sales during the quarter compared with RM8mil in the preceding quarter.
However, year-to-date revenue was down 16.8% to RM1.09bil compared with the previous corresponding period while earnings before interest and tax dropped 7.8% to RM331.1mil.
Property development earnings, which dropped 39.6% year-on-year due to lower sales and construction progress, were the main culprit. For the current financial year, SunCity will be changing its financial year-end from June 30 to Dec 31.
To further boost its RM743mil unbilled sales, which will provide more than a year’s earnings visibility for the company, SunCity is planning over RM1bil in new launches next year.
The projects include Sunway Velocity in Jalan Peel, Sunway-SPK townhouses, South Quay condominiums, and Sunway Damansara zero-lot bungalows.
Ngian said the company would be using its cash reserve of close to RM450mil to expand its land bank in the Klang Valley as well as in China and India. “Land prices have come off from their previous highs and we are actively looking to make some value buy.”
SunCity would also be launching its India and China projects next year.
“We have already done our homework and feasibility studies on both countries and we like what we saw there. There is a growing middle-class population and the higher purchasing power is translating into greater demand for housing,” Ngian said.
With a population of 1.3 billion in China and 1.2 billion in India, the two countries make up 40% of the world population. The sheer size and growth prospects were very attractive, he added.
For its maiden project in China, SunCity has partnered with Sunway Holdings Bhd’s subsidiary, SunwayMas Sdn Bhd, and Shanghai Guanghao Real Estate Development Group Co Ltd for a mixed high-rise development in the central business district of Jiangyin New Harbour City in Jiangsu Province.
The 39:26:35 joint venture to develop the RM492mil project will be launched in mid-2010. The Sunway Guanghou Jiangyin project will have 1,172 medium-end condominiums and some specialty shops on about 17 acres.
“We believe our maiden project in China will be our platform to secure other future property projects in this high growth country, especially in tier-two cities,” Ngian said.
In India, SunCity’s maiden project, Sunway Opus Grand in Hyderabad with a gross development value of RM1.17bil, is also targeted for launch next year.
The 35-acre project will comprise 2,423 medium-range condominiums priced from RM193 per sq ft.
Ngian said India was still a very young country as far as progress in property development was concerned, and SunCity’s expertise in project design, quality and management capability had opened up immense opportunities to play a bigger role in its property market.
Its preferred cities include Hyderabad, Bangalore and Pune. Hyderabad tops the list as its growth is fuelled by the information technology and biotech industries.
Besides a huge demand for quality housing, Grade-A commercial properties are also in short supply in India.
By The Star (by Angie Ng)
Positive Q4 outlook for construction
KUALA LUMPUR: The outlook for the domestic construction sector looks positive in the fourth quarter, but the roll-out of major projects will likely only happen next year, analysts and industry players said.
 Ng Kee Leen ... 'Developers must be market driven'.
Master Builders Association Malaysia (MBAM) president Ng Kee Leen said there was certainly greater optimism of a revival in the construction sector, thanks mainly to the Government’s stimulus packages and overall improvement in the global economy.
“We are definitely seeing more tenders and small public works jobs being dished out in recent months, but most of the bigger or mega projects are likely to be rolled out next year,” he told StarBiz recently.
The construction sector grew 1.1% in the first quarter but contracted 2.8% in the second.
“We expect the third and fourth quarter results to be positive,” he said, adding that the construction sector’s growth for the whole of 2009 could be 3%.
For 2010, Ng said “barring unforeseen circumstances, the construction sector’s gross domestic product should be better than this year’s 3% forecast, but definitely well below the highs seen in early 2000 when it was hovering around 6% to 7%.”
The construction sector remains attractive, especially since material costs such as sand, steel and cement prices have stablised, he said.
However, Ng advised construction players, especially developers in the sector, to not just build “more of the same” and expect the market to mop up whatever they build.
“Developers must be market driven to build projects that are wanted by the community,” he said, adding that there was now more interest in energy-saving buildings that embraced the green concept.
According to Ng, the construction sector’s yearly turnover was around RM60bil.
“About 50% of this turnover are from government projects and the balance from private initiated investments,” he said, adding that much of the government spending was for infrastructure development, including road works.
Ng noted that developers were also more confident of the property sector’s growth, with some unlisted ones like GSB Sentral Sdn Bhd, a member of the diversified Gapurna Group, having already started groundworks on its 348 Sentral development – a green property project with a gross development value RM1.1bil to be completed 2012.
GSB Sentral director Imran Salim said the company was very confident of the project’s success going by the 60% uptake of floor space of the building by its main tenant – Shell Malaysia.
Datuk Osman Abu Bakar, the secretary-general of the Malay Contractors Association which represents some 7,000 bumiputra contractors, said many of the projects dished out so far by the Government were for smaller projects.
“There are more tenders and small construction projects out these days and our members have benefited from these projects as our members are mostly Class F contractors,” he said.
A member of the Indian Contractors’ Association said he had benefited from the Government’s simulus packages.
“Most of the contracts we’ve secured are small roadworks projects. However, our company has not derived any benefits or jobs from mega projects,” he said.
A construction analyst with OSK Research concurred that the construction sector was on the road to recovery and that players in the market, from developers and contractors to real estate agents, were definitely more optimistic of the sector’s growth going forward.
“There are more property launches by developers and more tenders this third and fourth quarters. This is a good sign. But many contractors are waiting for more mega projects to be rolled out, which we suspect will occur next year,” he said.
The billion-ringgit projects that are likely to be rolled out or have been confirmed include the RM9bil Pahang-Selangor interstate raw water transfer project, the RM7bil Kelana Jaya and Ampang light rail transit line extension works and the construction of the low-cost terminal, according to the OSK analyst.
A construction analyst from another brokerage said that while there were early signs that the construction sector was recovering, the rollout pace of major projects remained slow.
“Also, now that the global economy appears to be on the mend, we wonder if the mega projects proposed when the economy was in a downturn will be implemented,” the analyst said.
“Granted mega projects implemented can help boost significantly the construction sector, but government funds on smaller infrastructure projects such as those in east Malaysia can also have significant impact on the overall health and resilience of the Malaysian economy, besides the construction sector, over a longer term.”
By The Star (by Danny Yap)
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