By STUART MICHAEL
metro@thestar.com.my
Photo by AZLINA ABDULLAH
A hillslope housing project overlooking the Kenanga Apartment in Bandar Baru Selayang is causing fear among the apartment dwellers.
The residents said the project’s proximity to a hillslope with gradient between 50 and 60 degrees could result in a landslide in case of heavy rain.
According to a resident Azman Ahmad, who has been living there for three years, there was a landslide last year — just metres away from where he was staying.
The landslide buried three vehicles.
“We protested against the development last year but no action was taken to stop the development. A notice was given last year to owners of the apartment units about the development,” he said.
He added that the Selayang Municipal Council (MPS) had deemed the project safe but the residents were not convinced.
“The hill is very steep and the contractor must build a retaining wall to block the soil erosion as a safety precaution,’’ said Azman, who’s apartment is closer to the hillslope.
Another resident Umi Mansor, 35, said she was worried for her family’s safety and planned to sell off the unit because of the landslide last year.
“Many residents here fear of a recurrence. When there is a downpour, muddy waters could be seen flowing down to our apartment area.
“This development is just too close to our apartments and the hillslope is just too steep,’’ she said.
When contacted, MPS public relations director Mohd Zin Masoad said the project was approved in 1992 for a four-storey superlink house costing about RM1.3mil.
“The project follows all the procedures specified by the council and respective government departments. However, I believe the contractors should construct a retaining wall,’’ he said.
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/18549/0/0 dated 26-January, 2012.)
Wednesday, January 25, 2012
Tuesday, January 17, 2012
High rise building under construction near KL Sentral catches fire
KUALA LUMPUR: The Lot 348 building under construction near KL Sentral caught fire about 3.50am Wednesday, forcing the closure of roads leading to KL Sentral and Jalan Brickfields and resulting in a massive traffic jam in the area.
Kuala Lumpur Fire and Rescue Department deputy director Azizan Ismail said they received a distress call at 3.53am that the building was on fire and arrived at the scene five minutes later.
"The fire started on the 30th floor of the 33-floor building, which was expected to be completed at the end of this year.
"We encountered some problems fighting the blaze as the fire-fighting system installed was not fully functional.
Pic by MARTIN JOSEPH IGNATIUS
"Due to this this we had to set up a pump on the 25th floor to fight the blaze and this caused some delay in bringing the fire under control," he added.
A total of 10 fire engines and 72 personnel fought the blaze.
Police were also at the scene to control the ensuing traffic jam in the vicinity following the closure of roads leading to KL Sentral and the Brickfields area.
After the blaze was brought under control, only Jalan Tun Sambathan was closed to traffic. A police source said that the road was likely to remain closed until at least noon.
Earlier, Twitter was abuzz with news of 'a building under construction near KL Sentral catching fire'.
Pic by MARTIN JOSEPH IGNATIUS
"Building on fire near KL Sentral causing massive traffic jams everywhere. Fire is uncontrollable cuz its too high up. Best to stay home," tweeted Aimi Abdullah Aimi Abdullah @dorkscotch.
"Roads leading to Sentral KL are closed off as one of the construction site is on fire," tweeted Jonathan Mah @jonmah
"I can see a building on fire at KL Sentral from my house," said another tweet from @angelinebabyy.
"There's a fire in KL Sentral, and I can see the smoke from Jalan Loke Yew looking at KL. Gonna be late for work... don't matter," tweeted Victor Tan @vicjamm.
"Fetched boyfriend to kl sentral, we caught a fire happening at a building nearby kl sentral," said @ATM2U.
Pic by Priscilla Lim
"348 Sentral, the under construction building that is beside KL Sentral is now on fire, Jln Brickfields closed," said a tweet at KL Traffic Update @kltrafficupdate.
Priscilla Lim, said in an e-mail to The Star Online: "We live opposite the fire site. It's the new Shell building. The fire started early in the morning.
"We were jolted awake by the noise, somewhat like minor explosions around 6.40am. By then, the fire was very rapid.
"When we called 112 (emergency number), we were told that the fire brigade was already there. Around 7.10am, people were trying to put out the fire - hose was directed at the site from the top floor of our residence."
Meanwhile, Rapid KL said in a tweet that LRT and bus services at KL Sentral were not affected by the fire.
"LRT operations normal, KL Sentral stn open," it added.
(Source: http://thestar.com.my/news/story.asp?file=/2012/1/18/nation/20120118070604&sec=nation#13268421862161&if_height=308 dated 18-January, 2012.)
Sunday, January 15, 2012
Oversupply of Klang Valley office space
By ELVIN FERNANDEZ
starbiz@thestar.com.my
KLANG Valley’s office space may be heading towards a state of oversupply. The total existing supply of office space is 94.4 million sq ft; 73.07 million sq ft of this were occupied in 3Q 2011. This leaves 21.33 million sq ft or 22.6% of the total space, within the various office buildings, vacant.
While a 5% to 10% vacancy is normal for most buildings, the aggregate 22.6% across the office market is high. Apart from this, there are 18.59 million sq ft of incoming space (under various stages of construction) and a further 18.74 million sq ft of planned supply.
This is space that has been approved for development, but for which construction has not commenced as yet, as tallied by the National Property Information Centre or NAPIC.
There is also the possibility that the 18.74 million sq ft could balloon substantially if all the office space being contemplated now and in the near future, especially the Economic Transformation Plan (ETP) are taken into account.
Demand-supply dynamics
In the years to come, the challenge for developers of office space is to make extraordinary efforts to adjust supply to conditions in the market when their projects are due to come on-stream and to do as much of pre-letting as possible.
For owners of existing buildings, hang onto to your tenants! For regulators and lenders, watch this with greater interest.
Much hope hinges on the roll out of the ETP and how it will create new office space demand, and of the order required, to balance demand and supply.
Nevertheless, the office market cannot be looked at, solely, through the lens of total numbers. The market exists in various sub-markets, depending on location and product type.
Each segment has its own demand-supply dynamics. Rents drive the market and post-Global Financial Crisis (GFC), rental levels have dropped to about RM7 to RM8 per sq ft per month for average prime space.
At this level, the office market for average prime space for office buildings sold en bloc can sustain at RM700 to RM900 per sq ft based on its historical yield expectation of about 7% to 7.5%, but this figure is not carved in stone.
For the market to slip below this level, it will take a severe economic downturn. In short, office values are bouncing along around the bottom. Post-Asian Financial Crisis, values did dip below the replacement cost (as it was then), for a number of years.
In terms of office space, the Klang Valley, with an existing supply of more than 90 million sq ft, dominates, compared to Penang’s 9.43 million sq ft and Johor Baru’s 7.7 million sq ft.
Klang Valley’s retail segment, comprising modern shopping centres, is relatively stronger than the office market segment because consumer spending has continued unabated.
But there are shadows of looming oversupply even in this segment. If inflation accelerates, or household spending is crimped, will there be consumer support?
But a well-managed retail centre by its inherent higher sophistication (than an office building), has better strength to tide over temporary downturns. Once a shopping centre has clientele loyalty, usually through a prolonged period of astute mall management, it is extremely difficult for new comers to dislodge it.
Real estate investment trusts or REITs have a heightened presence after the listing of Sunway REIT and CMMT are anchored with retail properties. The latest addition, the Pavilion REIT is also essentially a retail REIT.
REITs are generally defensive investments and are ideal for lowering volatility in a portfolio of stock and bond investments.
Role of a REIT
They are also particularly attractive during difficult economic periods such as, since 2008. They are more convenient proxies for physical property. For that reason, special tax benefits are showered on them.
But, as was seen during the last GFC, to perform true to form they should also display all their other attributes, i.e. a high degree of transparency, low borrowings, professional property management and the comfort that comes from a high degree of regulatory oversight.
REITs have also to display their ability as a sector, and as individual REITs, to ameliorate its greatest weakness i.e. its dependency on short term financing due to the requirement for it to distribute almost all its earnings, yearly.
During the days of easy money before the GFC, cheap financing was not a major issue, but it now is.
As a quid pro quo for favourable tax incentives, REITs are obliged to promote retail investors, apart from institutional investors, to participate in the REIT.
This will meet the regulators objective of deepening and broadening the capital market, and set the foundation for sophisticated products in the future such as the establishment of a property derivatives market.
Retail investors would also have tenancies that come with considerable visibility. REIT managers should provide information as this is the key driver of REIT proposition and not hide behind the guise of protectionism against competition.
The residential sector of the market, viewed from the perspective of the country as a whole, is fundamentally sound.
Losing balance
In the Klang Valley, where residential properties are generally 4 to 5 times annual household income, certain hotspots have elevated this ratio in recent years. Household income in the Klang Valley is about RM6,000 a month.
While house prices have increased, household income has not. Set against property prices, rental yield has dropped over the years, slipping below the critical 3% benchmark.
This is a cause for concern as yield should range between 3% and 6% (all risks net return) depending on house type and whether landed or strata.
Over the past six months, with the onset of greater volatility in global markets stemming mainly from the European sovereign debt crisis, sentiment has filtered down to the residential market in Kuala Lumpur.
Coupled with tightening measures by Bank Negara for loans, the market has slowed and demand has become subdued. It is hoped that this has taken some heat out of the speculative end of the market.
Keeping a look out
Going forward, into 2012, the issues that bear watching for the property market in Malaysia, are the continuing European debt crisis and the sluggish US economy and its effects on the global economy and the possible slowing of the Asian behemoths, China and India (which have regional implications).
There is also the possible General Elections in Malaysia (and its ramifications), the possible introduction of the Goods and Services Tax (affecting in particular house prices, developers and service apartments) and the possible unprecedented legislative introduction of a new, single mode of housing delivery by way of the “build then sell” system (humungous down-the-line implications).
There is a possibility of further tweaking of rules for housing loans (to possibly also contain household debt) and other possible monetary and fiscal measures (may be negative or uplifting for the property market) that may be put in place should the global economy weaken further.
·Elvin Fernandez is the MD of property consultancy firm Khong & Jaafar Sdn Bhd.
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/18292/0/0 dated 16-January, 2012.)
starbiz@thestar.com.my
KLANG Valley’s office space may be heading towards a state of oversupply. The total existing supply of office space is 94.4 million sq ft; 73.07 million sq ft of this were occupied in 3Q 2011. This leaves 21.33 million sq ft or 22.6% of the total space, within the various office buildings, vacant.
While a 5% to 10% vacancy is normal for most buildings, the aggregate 22.6% across the office market is high. Apart from this, there are 18.59 million sq ft of incoming space (under various stages of construction) and a further 18.74 million sq ft of planned supply.
This is space that has been approved for development, but for which construction has not commenced as yet, as tallied by the National Property Information Centre or NAPIC.
There is also the possibility that the 18.74 million sq ft could balloon substantially if all the office space being contemplated now and in the near future, especially the Economic Transformation Plan (ETP) are taken into account.
Demand-supply dynamics
In the years to come, the challenge for developers of office space is to make extraordinary efforts to adjust supply to conditions in the market when their projects are due to come on-stream and to do as much of pre-letting as possible.
For owners of existing buildings, hang onto to your tenants! For regulators and lenders, watch this with greater interest.
Much hope hinges on the roll out of the ETP and how it will create new office space demand, and of the order required, to balance demand and supply.
Nevertheless, the office market cannot be looked at, solely, through the lens of total numbers. The market exists in various sub-markets, depending on location and product type.
Each segment has its own demand-supply dynamics. Rents drive the market and post-Global Financial Crisis (GFC), rental levels have dropped to about RM7 to RM8 per sq ft per month for average prime space.
At this level, the office market for average prime space for office buildings sold en bloc can sustain at RM700 to RM900 per sq ft based on its historical yield expectation of about 7% to 7.5%, but this figure is not carved in stone.
For the market to slip below this level, it will take a severe economic downturn. In short, office values are bouncing along around the bottom. Post-Asian Financial Crisis, values did dip below the replacement cost (as it was then), for a number of years.
In terms of office space, the Klang Valley, with an existing supply of more than 90 million sq ft, dominates, compared to Penang’s 9.43 million sq ft and Johor Baru’s 7.7 million sq ft.
Klang Valley’s retail segment, comprising modern shopping centres, is relatively stronger than the office market segment because consumer spending has continued unabated.
But there are shadows of looming oversupply even in this segment. If inflation accelerates, or household spending is crimped, will there be consumer support?
But a well-managed retail centre by its inherent higher sophistication (than an office building), has better strength to tide over temporary downturns. Once a shopping centre has clientele loyalty, usually through a prolonged period of astute mall management, it is extremely difficult for new comers to dislodge it.
Real estate investment trusts or REITs have a heightened presence after the listing of Sunway REIT and CMMT are anchored with retail properties. The latest addition, the Pavilion REIT is also essentially a retail REIT.
REITs are generally defensive investments and are ideal for lowering volatility in a portfolio of stock and bond investments.
Role of a REIT
They are also particularly attractive during difficult economic periods such as, since 2008. They are more convenient proxies for physical property. For that reason, special tax benefits are showered on them.
But, as was seen during the last GFC, to perform true to form they should also display all their other attributes, i.e. a high degree of transparency, low borrowings, professional property management and the comfort that comes from a high degree of regulatory oversight.
REITs have also to display their ability as a sector, and as individual REITs, to ameliorate its greatest weakness i.e. its dependency on short term financing due to the requirement for it to distribute almost all its earnings, yearly.
During the days of easy money before the GFC, cheap financing was not a major issue, but it now is.
As a quid pro quo for favourable tax incentives, REITs are obliged to promote retail investors, apart from institutional investors, to participate in the REIT.
This will meet the regulators objective of deepening and broadening the capital market, and set the foundation for sophisticated products in the future such as the establishment of a property derivatives market.
Retail investors would also have tenancies that come with considerable visibility. REIT managers should provide information as this is the key driver of REIT proposition and not hide behind the guise of protectionism against competition.
The residential sector of the market, viewed from the perspective of the country as a whole, is fundamentally sound.
Losing balance
In the Klang Valley, where residential properties are generally 4 to 5 times annual household income, certain hotspots have elevated this ratio in recent years. Household income in the Klang Valley is about RM6,000 a month.
While house prices have increased, household income has not. Set against property prices, rental yield has dropped over the years, slipping below the critical 3% benchmark.
This is a cause for concern as yield should range between 3% and 6% (all risks net return) depending on house type and whether landed or strata.
Over the past six months, with the onset of greater volatility in global markets stemming mainly from the European sovereign debt crisis, sentiment has filtered down to the residential market in Kuala Lumpur.
Coupled with tightening measures by Bank Negara for loans, the market has slowed and demand has become subdued. It is hoped that this has taken some heat out of the speculative end of the market.
Keeping a look out
Going forward, into 2012, the issues that bear watching for the property market in Malaysia, are the continuing European debt crisis and the sluggish US economy and its effects on the global economy and the possible slowing of the Asian behemoths, China and India (which have regional implications).
There is also the possible General Elections in Malaysia (and its ramifications), the possible introduction of the Goods and Services Tax (affecting in particular house prices, developers and service apartments) and the possible unprecedented legislative introduction of a new, single mode of housing delivery by way of the “build then sell” system (humungous down-the-line implications).
There is a possibility of further tweaking of rules for housing loans (to possibly also contain household debt) and other possible monetary and fiscal measures (may be negative or uplifting for the property market) that may be put in place should the global economy weaken further.
·Elvin Fernandez is the MD of property consultancy firm Khong & Jaafar Sdn Bhd.
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/18292/0/0 dated 16-January, 2012.)
Thursday, January 12, 2012
Residents can seek compensation for damage caused by public property
By EDWARD R. HENRY
edward@thestar.com.my
People can initiate insurance claims for any damage or injury caused by public property or in public premises in Petaling Jaya, said Petaling Jaya mayor Datuk Mohamad Roslan Sakiman.
Street trees that fall in a thunderstorm causing damage to property, motorists suffering injuries after driving into potholes, children getting hurt due to defective playground equipment could be the factor to initiate an insurance claim for compensation.
Petaling Jaya City Council (MBPJ) has awarded RM148,245 to claimants from 2009 to 2011, for various cases involving damage to vehicles going into potholes, trees falling on private property in a storm and children hurt at playgrounds.
Roslan said the Public Liability Insurance Policy was unique in that it covered, in addition to physical damage, theft of personal items from the city council’s premises as well as any accident that might occur while ratepayers use the facilities on the council’s premises.
“For example if a person visits the PJ Library and personal items go missing from the lockers then they can claim compensation. Our insurance under PNSB Insurance Brokers Sdn Bhd is hassle free, provided the claimant gives all the required documents, including a police report,” he said.
Roslan added that in 2009, only one claim of RM1,500 was made for damage to a car that had gone into a pothole.
In 2010, some 20 people sought compensation totalling RM144,117 and the insurance firm has awarded RM76,681 while another RM67,435 in claims are waiting for documentation.
Last year, the claims doubled, where 48 people sought compensation totalling RM171,220 and the insurance firm paid out RM70,064 and another RM101,156 is still waiting for required papers and photos of the incidents.
Roslan said the insurance had specific compensation that the claimant would receive in the event of structural damage, damage to vehicles or injury.
“Compensation could be reimbursement for vehicle repairs or medical bills due to injury suffered,” he said.
“In the case of a tree planted by the PJ City Council falling on a house, the owner can initiate an insurance claim,” he said.
“In some countries people can be charged for planting trees outside their houses and insurance has to be taken on the tree. Here it is free,” he said.
He said for those wanting to make an insurance claim could go to the General Administration Division Service Management Department on the second floor at the MBPJ headquarters in Jalan Yong Shook Lin in PJ New Town.
Senior assistant director Azizah Kosni (03-7956 3544 ext: 327) or senior clerk Ibrahim Abdullah (03-7956 3544 ext 310) are well versed with the claims process and would give advice to people.
(Source: http://www.starproperty.my/PropertyScene/PropertyScene/18235/0/0 dated 13-January, 2012.)
edward@thestar.com.my
People can initiate insurance claims for any damage or injury caused by public property or in public premises in Petaling Jaya, said Petaling Jaya mayor Datuk Mohamad Roslan Sakiman.
Street trees that fall in a thunderstorm causing damage to property, motorists suffering injuries after driving into potholes, children getting hurt due to defective playground equipment could be the factor to initiate an insurance claim for compensation.
Petaling Jaya City Council (MBPJ) has awarded RM148,245 to claimants from 2009 to 2011, for various cases involving damage to vehicles going into potholes, trees falling on private property in a storm and children hurt at playgrounds.
Roslan said the Public Liability Insurance Policy was unique in that it covered, in addition to physical damage, theft of personal items from the city council’s premises as well as any accident that might occur while ratepayers use the facilities on the council’s premises.
“For example if a person visits the PJ Library and personal items go missing from the lockers then they can claim compensation. Our insurance under PNSB Insurance Brokers Sdn Bhd is hassle free, provided the claimant gives all the required documents, including a police report,” he said.
Roslan added that in 2009, only one claim of RM1,500 was made for damage to a car that had gone into a pothole.
In 2010, some 20 people sought compensation totalling RM144,117 and the insurance firm has awarded RM76,681 while another RM67,435 in claims are waiting for documentation.
Last year, the claims doubled, where 48 people sought compensation totalling RM171,220 and the insurance firm paid out RM70,064 and another RM101,156 is still waiting for required papers and photos of the incidents.
Roslan said the insurance had specific compensation that the claimant would receive in the event of structural damage, damage to vehicles or injury.
“Compensation could be reimbursement for vehicle repairs or medical bills due to injury suffered,” he said.
“In the case of a tree planted by the PJ City Council falling on a house, the owner can initiate an insurance claim,” he said.
“In some countries people can be charged for planting trees outside their houses and insurance has to be taken on the tree. Here it is free,” he said.
He said for those wanting to make an insurance claim could go to the General Administration Division Service Management Department on the second floor at the MBPJ headquarters in Jalan Yong Shook Lin in PJ New Town.
Senior assistant director Azizah Kosni (03-7956 3544 ext: 327) or senior clerk Ibrahim Abdullah (03-7956 3544 ext 310) are well versed with the claims process and would give advice to people.
(Source: http://www.starproperty.my/PropertyScene/PropertyScene/18235/0/0 dated 13-January, 2012.)
China bubble concerns spread
BEIJING: Concerns over a bubble in China’s residential property market are spreading to the commercial real-estate sector at a time when developers are upping their exposure, and the country’s insurance industry is poised to invest huge sums into the space.
While commercial prices are steady and insurance companies are watching and waiting, residential property developers have increased investments in the office sector after Chinese government measures were instituted to cool home prices.
Shimao Property, Country Garden, China Resources Land and Poly have been increasing their investments in commercial property. Smaller developers such as SinoOcean Land and Gemdale are increasing commercial exposure, too.
Commercial real-estate investment in China will exceed one trillion yuan (US$157bil) this year, up from 740 billion yuan in 2010, as developers have shifted away from the housing market, the target of nearly two years of government measures to cool the sector.
The investment frenzy into commercial property has also been fuelled by expectations of a potentially huge demand from China’s insurers, which won approval late last year to invest up to 10% of their assets in real estate, most of which was aimed at commercial properties.
But even before any major investment from insurance companies, prices of office space and shopping malls have jumped and rental yields have slipped due to speculative buying, fuelling concerns of a bubble forming across the industry.
“The low investment yield does give us some concern that prices probably have gone up a lot and we need to see the income growth before we can see values going higher,” said Michael Klibaner, head of China research for property consultancy Jones Lang LaSalle.
Insurers, including China Life, Ping An, China Pacific and Goldman Sachs backed Taikang Life, have 500 billion yuan available to invest in property, based on the industry’s total assets of about five trillion yuan.
That’s enough to buy all top-grade office buildings in Beijing, Shanghai, Guangzhou and Shenzhen, analysts say.
But only a fraction of the 500 billion yuan has been invested so far, as insurers keep a tight grasp on their money, given the concerns surrounding the sector.
Annual gross rental yields on commercial properties in major cities such as Beijing and Shanghai have fallen to 46% from around 10% several years ago.
Commercial properties in major cities such as Beijing and Shanghai are now generating annual gross rental returns that are below China’s official one-year lending rate of 6.56%. That means if investors borrow and plough that money into commercial property, they stand to lose because the returns won’t even cover the borrowing cost.
Last month, China’s banking regulator urged banks to strictly monitor risks when they provide loans to commercial property projects and set a higher criteria for approving such loans than for home mortgages.
The China Insurance Regulatory Commission (CIRC) currently requires insurers to submit all property transactions for its approval as it works on more detailed investment rules.
“The risk is a bit high if insurers invest in the real-estate market now. There are good reasons for CIRC to hold back the issuance of its final guidelines,” said Chen Hongxia, an analyst at Oriental Securities in Shanghai.
Faced with mounting pressure to meet their long-term liabilities amid a rapidly ageing population, insurers had spent years lobbying Beijing to lift the property investment ban.
Domestic investors are largely restricted from buying properties abroad due to China’s closed capital account, forcing them to look for investment opportunities within the country.
Investment in commercial property is encouraged by China’s vow to boost domestic consumption as part of its economic rebalancing.
Shirley Xiao, senior vice-president of top Chinese developer China Vanke, described the commercial property rush as irrational.
Many developers lacked the financial backing and human resources needed to run office properties and malls, and China’s urbanisation was far from over, boding well for the residential sector over the long term, she said. “We don’t think there is logic behind this.”
A glut of commercial property was already plaguing cities such as Chengdu, Shenyang and Tianjin, analysts said. — Reuters
Shopping malls are being built across the country, with some boasting floor areas of more than several hundred thousand sq m.
The rationale behind building more malls: China has much less retail space per capita than Europe and the United States. Retail space per capita in China is less than 0.5 sq m, compared with about one sq m in Europe and 23 sq m in the United States.
But some analysts say this comparison is misleading, given the sheer size of China’s population.
In some major Chinese cities such as Beijing and Shanghai, retail space per capita is already nearing or surpassing the European and US levels.
Only large developers with easy access to bank credit and strong state parent backing, such as China Resources Land, would be successful in running large malls when there was a glut, analysts said.
It is more risky for smaller developers such as SinoOcean Land and Gemdale to expand aggressively in commercial property, which requires more expertise and is more capital intensive and time consuming.
And as more people shop online, it is getting increasingly challenging to run a shopping mall and make it appealing to merchants, consumers and investors.
“I think it will be a golden decade for the consumer… Whether it will be a golden decade for developers remains to be seen,” said James Hawkey, executive director of retail services at Cushman & Wakefield in China. — Reuters
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/15602/0/0 dated 13-January, 2012.)
Wednesday, January 11, 2012
South Korea airport plans $3 billion casino resort
Copyright AFP, 2012 | Jan 12, 2012
The operator of South Korea's main airport plans to build a $3 billion casino resort to woo increasingly wealthy travellers from China and elsewhere in Asia, its spokeswoman said Wednesday.
The Incheon International Airport Corp. is also mulling a bid for Edinburgh Airport as part of efforts to boost sources of income abroad, she told AFP.
The new resort, to be built near the airport 50 kilometres (31 miles) west of Seoul, would feature facilities such as a hotel, casinos, convention centres, shopping malls and hospitals, she said.
"We plan to develop the property like the resorts in Las Vegas or Macau," she said, adding negotiations to select a developer are underway.
The airport already earns 65 percent of its revenue from hotels, duty-free sales and other services not directly linked to flying. Spending by Chinese and Japanese account for more than a quarter of duty-free sales.
The airport earned $1.26 billion in duty-free sales from January to October last year, and says it beat Dubai International Airport to become the world's top airport in such sales during the period.
South Korea's biggest hub handled about 35 million passengers last year and has been several times been rated the world's best airport by the Airports Council International.
Incheon is also considering a bid for Edinburgh Airport, whose operator was ordered by antitrust regulators to hive off Scotland's largest gateway.
"We are internally reviewing whether or not to join the bid as part of our overseas business drive," the spokeswoman said.
The conservative government announced a plan in 2008 to sell up to a 49 percent stake in Incheon airport as part of a privatisation drive.
But a parliamentary bill has been stalled in the face of opposition from lawmakers and civic groups.
(Source: http://www.starproperty.my/PropertyScene/AgencyNews/18193/0/0, dated 12-January, 2012.)
Skyscrapers have 'unhealthy' link to financial crises: bank
Copyright AFP, 2012 | Jan 12, 2012
The construction of enormous skyscrapers has an "unhealthy" link with looming financial crises and investors should therefore keep a close eye on China and India, Barclays Capital said on Wednesday.
China is currently the biggest builder of skyscrapers, while booming India is constructing the second largest tower in the world, the investment bank said in its latest annual 'Skyscraper Index' survey.
"Our Skyscraper Index continues to show an unhealthy correlation between construction of the next world's tallest building and an impending financial crisis -- New York 1930; Chicago 1974; Kuala Lumpur 1997 and Dubai 2010," Barclays Capital said in a report.
"Yet often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction.
"Investors should therefore pay particular attention to China, today's biggest builder... and India, which with just two completed skyscrapers, now has 14 skyscrapers under construction.
"Barclays Capital warned of a "bubble" in China, whose property boom has been powered by cheap liquidity."Looking forward, using skyscrapers under construction, it is evident that the skyscraper boom in China continues to grow," it said.
"China will complete 53 percent of the 124 skyscrapers under construction over the next six years, expanding the number in Chinese cities by a staggering 87 percent.
"China's skyscrapers are not only increasing in number -- it now has 75 completed skyscrapers above 240 metres in height -- but the average height of the skyscrapers that it is building is also increasing as past liquidity fuels the construction boom.
"Barclays Capital meanwhile added that India was set to experience its largest boom in skyscraper construction.
"China is not alone in the growth of its building bubble ... India it seems is playing catchup," said Barclays Capital, the investment arm of major British bank Barclays.
"Today India has only two of the world's 276 skyscrapers over 240 metres (788 feet) in height, yet over the next five years it intends to complete 14 new skyscrapers, in what will prove to be its largest skyscraper building boom.
"Worryingly as well, India is also constructing the second tallest building in the world, the Tower of India, which should complete by 2016.
"The writing, so to speak, would seem to be already on the glass curtain walling. "For if history proves to be right, this building boom in China and India could simply be a reflection of a misallocation of capital, which may result in an economic correction for two of Asia's largest economies in the next five years," Barclays Capital concluded in its report.
In London meanwhile, work on The Shard -- a 310-metre skyscraper that will become the highest tower in western Europe -- is set for completion this year.
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/18217/0/0, dd 12-Janaury, 2012.)
The construction of enormous skyscrapers has an "unhealthy" link with looming financial crises and investors should therefore keep a close eye on China and India, Barclays Capital said on Wednesday.
China is currently the biggest builder of skyscrapers, while booming India is constructing the second largest tower in the world, the investment bank said in its latest annual 'Skyscraper Index' survey.
"Our Skyscraper Index continues to show an unhealthy correlation between construction of the next world's tallest building and an impending financial crisis -- New York 1930; Chicago 1974; Kuala Lumpur 1997 and Dubai 2010," Barclays Capital said in a report.
"Yet often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction.
"Investors should therefore pay particular attention to China, today's biggest builder... and India, which with just two completed skyscrapers, now has 14 skyscrapers under construction.
"Barclays Capital warned of a "bubble" in China, whose property boom has been powered by cheap liquidity."Looking forward, using skyscrapers under construction, it is evident that the skyscraper boom in China continues to grow," it said.
"China will complete 53 percent of the 124 skyscrapers under construction over the next six years, expanding the number in Chinese cities by a staggering 87 percent.
"China's skyscrapers are not only increasing in number -- it now has 75 completed skyscrapers above 240 metres in height -- but the average height of the skyscrapers that it is building is also increasing as past liquidity fuels the construction boom.
"Barclays Capital meanwhile added that India was set to experience its largest boom in skyscraper construction.
"China is not alone in the growth of its building bubble ... India it seems is playing catchup," said Barclays Capital, the investment arm of major British bank Barclays.
"Today India has only two of the world's 276 skyscrapers over 240 metres (788 feet) in height, yet over the next five years it intends to complete 14 new skyscrapers, in what will prove to be its largest skyscraper building boom.
"Worryingly as well, India is also constructing the second tallest building in the world, the Tower of India, which should complete by 2016.
"The writing, so to speak, would seem to be already on the glass curtain walling. "For if history proves to be right, this building boom in China and India could simply be a reflection of a misallocation of capital, which may result in an economic correction for two of Asia's largest economies in the next five years," Barclays Capital concluded in its report.
In London meanwhile, work on The Shard -- a 310-metre skyscraper that will become the highest tower in western Europe -- is set for completion this year.
(Source: http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/18217/0/0, dd 12-Janaury, 2012.)
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