JLL Malaysia Real Estate Newsflash - 16/08/2017

1. JLL Malaysia Real Estate Newsflash
Tuesday, 15 August 2017 – Wednesday, 16 August 2017
Economy
Ringgit to rebound by year end
The ringgit remains one of the most undervalued currencies among emerging markets, thus making Malaysian assets
attractive to foreign investors, said Standard Chartered Bank, who sees the local currency rebounding to a fair value of 4.10
against the US dollar by year end, adding that there is still a lot of scope for investors to increase their holdings. Meanwhile,
the Malaysian economy is likely to see a 5.4% growth in second quarter GDP, which will be announced this Friday.
Source: The Edge Financial Daily
Alliance DBS raises Q2 GDP forecast to 5.5%
Stronger-than-expected private consumption and manufactured exports have led Alliance DBS Research to upgrade its
gross domestic product (GDP) forecast for the second quarter (Q2) of 2017 to 5.5% from 5.2% previously. As a result, the
research house said its full-year GDP forecast has also been lifted to 5.2% from 5% previously. It noted that the services
sector index may have grown stronger by 7% year-on-year in Q2 2017, representing the fastest pace of growth since Q1
2015.
Source: The Star
Malaysia's economy seen on uptrend for next three to five years
Malaysia’s economy is expected to be on an uptrend for the next three to five years, supported by strong local and foreign
investments, increase in exports as well as consistent government support for the companies. This, according to a report,
will help the country’s gross domestic product to touch US$1.3tril by 2030 and overtake its neighbor, Singapore. Chief
economist at IQI Global said thanks to the China’s Belt and Road Initiative (BRI), massive investments would continue to
come to Malaysia. The BRI is a development strategy proposed by Chinese President Xi Jinping that focuses on connectivity
and cooperation between Eurasian countries.
Source: The Star
Banks no longer rely on customer deposits for lending activities
Banks no longer rely on customer deposits for lending activities, as they have broadened their sources of funding to other
areas such as bonds. According to a top banker, this is a reason why the loan-to-deposit ratio (LDR) is no longer a
benchmark to determine the health of the financial system or a bank. Modern benchmarks weighed heavily on risk
management, and diversified sources and indicators such as liquidity, capital base and credit risk were more important when
assessing the health of the loan book of banks. The LDR was a simplistic way of looking at a situation a bank was in, and
did not account for the profile of the tenures of loans and deposits within a bank.
Source: The Star

2. FGV eyes East Coast Rail logistics job
Felda Global Ventures Holdings Bhd (FGV) is eyeing logistics job opportunities in the multi-billion infrastructure East Coast
Rail Link (ECRL) project. FGV officer-in-charge Datuk Khairil Anuar Aziz said as ECRL’s construction would be based in
Kuantan before expanding to Kelantan and Selangor, FGV had the advantage to provide logistics services for the project
as its facilities are either in or close to Kuantan Port and would be targeting for jobs such as providing transportation services
to carry equipment and building materials along the entire stretch of the ECRL project.
Source: The Star
Property
Hap Seng to dispose of land in Tawau for RM175.28mil
Hap Seng Consolidated Bhd is disposing of 10.06 acres (4.07ha) of leasehold land in Tawau, Sabah for RM175.28mil to a
related party, Hong Kong-based Lei Shing Hong Ltd (LSH) said. The disposal consideration of about RM400 per sq ft was
arrived at on a willing-buyer willing-seller basis based on a valuation by independent valuer VPC Alliance (Sabah) Sdn Bhd,
Hap Seng said. The net book value of the land, on which no business activity had been carried out, totaled RM27.89mil as
at Dec 31, 2016. The total cost of investment between Jan 31, 1986 and Aug 8, 2017 was RM26.12mil.
Source: TheEdgeProperty.com
YFG bags RM235 mil apartment job but loses RM245mil PR1MA project
Practice Note 17 (PN17) company YFG Bhd has bagged a RM235mil contract to build apartments in Kajang, Selangor but
lost the RM245mill subcontract for PR1MA homes in Pedas, Rembau, Negeri Sembilan. The PR1MA project, which was
awarded to YFG on Feb 16, was terminated by Wearegold Sdn Bhd (WRG) as the latter is not able to take part in its
proposed regularisation plan due to unforeseen reasons. If the project had taken off, it would have involved the construction
of 1,572 single- and double-storey link houses and contributed positively to the loss-making mechanical and electrical
service provider’s FY17. Meanwhile, the Kajang apartment project, is expected to contribute positively to its revenue and
earnings for FY18 and beyond.
Source: TheEdgeProperty.com
No stopping Merdeka PNB 118, says PNB
The construction of Merdeka PNB 118 – which will be Malaysia’s tallest building and the world’s fifth tallest on completion
– will not be stopped, PNB group chairman said, even though it will worsen the oversupply of office space in the capital city.
He also said about 60 floors of Merdeka PNB 118 have been earmarked for offices of PNB and its group of companies, and
another 20 floors for a hotel, leaving about 20% of total space or 500,000 sq ft open for leasing. The project has an estimated
GDV of RM6bil and is expected to be completed by 2019.
Source: The Edge Financial Daily
MRCB wins RM369mil DASH job
MRCB announced that it had secured a contract in relation to the construction of the Damansara-Shah Alam Elevated
Expressway (DASH) for RM369mil. System Engineering Construction Sdn Bhd, which won the contract for the Damansara
Perdana-Penchala Link portion of the DASH project for RM340mil last year, had pulled out from the job, with industry
veterans claiming that the contracted sum of the job was now too low amid mounting cost pressures; the contract now has
been won by MRCB under a retender.
Source: The Edge Financial Daily

3. AISB acquires Parkwood with plans to develop residential project
Amalgamated Industrial Steel Bhd (AISB) is acquiring Parkwood Sdn Bhd for RM709,435 cash and settle its debt of
RM17.75mil, as part of its strategic plan to venture into property development. In addition, there will also be a settlement of
the amount owing by Parkwood to LGB upon the completion of the proposed acquisition. Parkwood owns two parcels of
leasehold land in Kampung Sungai Kayu Ara, Petaling Jaya, with a total combined land area of 1.82 acres. AISB, plans to
undertake a residential development on the land upon completion of the proposed acquisition. The audited net book value
of the land as at Dec 31, 2016 is RM17.84mil while the market value as appraised by the valuer as of Aug 7, 2017 is
RM18.60mil.
Source: The Star
Cyberview Sdn Bhd appoints Gadang Engineering (M) Sdn Bhd to build RM475mil Cyberjaya Hospital
Cyberview Sdn Bhd has confirmed the appointment of Gadang Engineering (M) Sdn Bhd, a subsidiary of Gadang Holdings
Bhd as the principal contractor for the Cyberjaya Hospital. The appointment concludes a comprehensive tender process.
The hospital will span over 12 acres with a total contract value of RM475mil, located in the vicinity of Gem In Mall and is
expected to serve not only the residents of Cyberjaya but also those in Puchong, Dengkil, and Sepang. The 9 storey hospital
will be served by an 8 storey multi-level car park (with a total of 965 parking bays). In addition to that, the hospital is also
designed in compliance with the Green Building Index certification standards for sustainability.
Source: The Sun Daily
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