Friday 10 January 2014

IKEA to open outlet at Batu Kawan Penang

Popular Swedish home furnishing store Ikea Store will be opening its first outlet in Penang with groundwork expected to commence by end of the year or early next year.

In announcing this, Penang Chief Minister, Lim Guan Eng said the Ikano Pte Ltd, the franchisee for Ikea in Malaysia, Singapore and Thailand, formed a joint venture with local company, Aspen Vision Land Sdn Bhd (in which Ivory Properties Group Berhad has 49% stake), to develop the integrated shopping mall in Batu Kawan.

The joint venture company, Aspen-Ikano bought the land from state agency, Penang Development Corporation, for 483.95 million ringgit.(RM45.35psf) The cost of the land is about RM484 million and payment is to be made 60 months from the agreement date. A RM5 million non-refundable deposit has already been paid.

“Aspen-Ikana has bought 245 acres (100 hectares) of land in Batu Kawan at RM483 million to develop an integrated shopping mall and mixed development of offices and residences,” Lim said.

The 245 acres will include 30 acres (12 hectares) for the first Ikea Store in the northern region of Malaysia and the first phase of the shopping mall.

Another 45 acres (18 hectares) is to be set aside for phase two of the shopping mall and 170 acres (69 hectares) for mixed development purposes.

Lim added that the entire commercial and mixed developments on the 245 acres of land are expected to be completed within 10 years from the date of Agreement.

“The time frame that all parties are targeting at is about 5 years or sooner, depending on various surrounding, economic and demand factors.”

Also present was Penang Development Corporation (PDC) Datuk Rosli Jaafar, Aspen Group CEO Datuk M. Murly and chairman Datuk Seri Nazir Ariff.

Tuesday 7 January 2014

Dynamic Limit by Bursa Malaysia

Just learnt today that besides limit up/down, Bursa has introduced dynamic limit recently whereby the limit of share price fluctuation from the last done price is kept at +/-8% or +/- 8sen for stock with share price below RM1.

One still can key in order but it will be automatically cancelled by Bursa.

You will see something like this under order properties

So we won't see again something like the 30% limit down that happened on several stocks such BKAWAN, TDM, HSPLANT, CBIP that happend during the closing on 21 June 2013.

Saturday 4 January 2014

Hektar REIT

First Retail focused REIT in Malaysia

Assets worth RM1b. Aim is to double its asset size to RM2b by 2020.

Should the company acquire another mall, it will most likely raise funds from the equity market.

Currently, it has 5 malls:

Latest valuation:
Latest market valuation (30 November 2013)
Subang Parade
Mahkota Parade
Wetex Parade
Central Square
Landmark Central

The income of neighbourhood mall is always steady. When times are good, neighbourhood malls will not be enjoying stellar income growth as compared to the big malls in major cities. However, when times are bad, they won't be adversely affected as well.

assets enhancement initiatives (AEIs) include renovationo and refurbishment works, negotiating new leasing or rental terms, finding ways to increase net lettable area and others.

AEIs for Central Square (16 to 17 years old) are expected to be completed by middle 2014. Once that is done, the company will be looking at AEIs for Landmark Central (2-3 years old).

The ground floor of Landmark Central is made up of parking lots. If it can be converted into net lettable areas, it would certainly be a boost to the income. Having said that, HEKTAR would need to sort out the parking issue.

For the malls in Kedah, it expect to double the rental collection by a combination of increasing net lettable areas, bringing in international retail brands into the malls, higher turnover rents and others.

Mohkota Parade is upgrading its cinema from 4 to 10 screens. Works are expected to complete by end of 2014.

HEKTAR has a commitment to at least maintain or increase its dividend yoy.

Interest rate hike (some floating rate borrowings)
Hike in electricity tariff
Reducing purchasing power of consumers