ARCHIVE DATE EXTRACTS SOURCE Investors regain taste for Asia's spicier offerings On Vietnam's housing market: On Malaysia's office market: Aseana records gross loss of USD4.14m in first half Aseana Properties, a property developer investing in Malaysia and Vietnam, made a gross loss of USD4.14m in the first six months of 2010, compared with a gross profit of USD2.81m in 2009. Aseana Sees Foreign Interest In Vietnam Project JVs Asian real estate developer Aseana Properties Ltd. is seeing interest from foreign firms looking to enter the Vietnamese property market, Chief Executive Lai Voon Hon said Friday, as new entrants to the fast-growing market look to partner up on developments with a local firm with strong ground presence. Aseana 1H Pretax Loss Widens; Signs Of Improving Market Asian real estate developer Aseana Properties Ltd. posted a wider first-half pretax loss as property sales fell on year and it was hit with foreign exchange charges, but reported improvements in some areas of the property market in Malaysia and Vietnam. 22 July 2010 Aseana sells office tower and retail mall in Kuala Lumpur Aseana Properties, a property developer investing in Malaysia and Vietnam, has entered into conditional sale and purchase agreements with wholly owned subsidiaries of ARA Asia Dragon Fund to realise its investments in a 20-storey office tower block and a five-storey retail mall at a total consideration of RM333m (USD104m). Property Funds World (Web) 22 July 2010 Aseana ponders distribution to shareholders Asia-focused residential and commercial property developer Aseana Properties Ltd has raised Rm333m ($104m) from the sale of an office block and a retail mall in Kuala Lumpur and may consider returning some cash to shareholders. Aseana decided that it was best to take advantage of the offer from the ARA Asia Dragon Fund because of the depressed office market in the city. It also means that Aseana will not have to renegotiate its loans in early 2011. Aseana believes that Vietnam has better prospects than Malaysia. Aseana is considering returning some of the cash to shareholders through dividends or share buybacks. The availability of attractive reinvestment opportunities will have a bearing on any distribution to shareholders. ShareCast (Web) 21 July 2010 Aseana Properties is selling an office tower and retail mall in Kuala Lumpur for RM333m. Aseana Properties is selling an office tower and retail mall in Kuala Lumpur for RM333m.
Aseana said it had entered into conditional sale and purchase agreements with wholly owned subsidiaries of ARA Asia Dragon Fund. The properties - a 20-storey office tower block and a five-storey retail mall - are two of three components in 1 Mont' Kiara, an integrated mixed development located in the heart of Mont' Kiara, a sought-after residential and commercial address in Kuala Lumpur. Business Financial Newswire 21 July 2010 DJ Aseana Properties Malaysian Properties For MYR333M, At Net Loss Dow Jones Newswires 7 July 2010 DJ Aseana Properties Buys 4 Star Hotel In Kuala Lumpur For $66M Aseana Properties Ltd., a property developer investing in Malaysia and Vietnam, listed on the official list of the London Stock Exchange, said Wednesday it has entered into an agreement through a wholly-owned subsidiary, to acquire a four-star business hotel in Kuala Lumpur for MYR217 million, or $66 million. Dow Jones Newswires 7 July 2010 Aseana Properties Enters Sale And Purchase Deal To Acquire Four-star Business Hotel In Kuala Lumpur From Excellent Bonanza - Quick Facts Aseana Properties Limited (ASPL.L) announced that it has entered into a Sale and Purchase Agreement or "SPA" through a wholly-owned subsidiary, to acquire a four-star business hotel in Kuala Lumpur, from Excellent Bonanza Sdn. Bhd. or "EBSB", at a consideration of 112.5% of the total development cost. RTTNews (Web) 17 June 2010 Aseana Properties NAV Slips To $201.49M Due To $2M For Exchange Loss Aseana Properties Ltd., a property developer in Malaysia and Vietnam, said the net asset value at March 31, slipped to $201.49 million, from $205.07 million at Dec. 31, 2009 mainly due to an unrealized foreign exchange loss of $2.0 million. Dow Jones Newswire 13 May 2010 Small Cap Focus: Aseana developments Asian property markets have held up relatively well and residential and commercial property developer Aseana Properties Ltd believes that Malaysia and Vietnam still offer excellent growth prospects. Aseana’s strategy is to acquire projects at the pre-construction stage, although it will consider later stage projects. The focus is on capital growth but dividends may be considered in the medium-term. Digital Look ( web) 23 April 2010 Aseana makes profit before tax of USD 4.3 m Aseana Properties, a property developer in Malaysia and Vietnam, made a net profit before taxation of USD 4.3 m in 2009, compared with a net loss of USD27.4 m the previous year. Group revenue increased by 200 per cent to USD115.25 m in 2009, which is mainly attributed to the sale of properties in i-ZEN@Kiara I (USD3.9 m), Tiffani by i-ZEN (USD91.9 m) and Sandakan Harbour Square Phase 2 (USD18.7 m), all located in Malaysia. Propertyfundsworld.com 22 April 2010 Aseana Properties revenues up 200% Aseana Properties revenue increased by 200% in the year to the end of December to $115.25m (2008: $38.37m). Business Financial Newswire 22 April 2010 DJ Aseana Properties Swings To 2009 Pretax Profit On Sales Asian real estate developer Aseana Properties Ltd. (ASPL.LN) Thursday swung to a full-year pretax profit after it sold a raft of properties in Malaysia and benefited from favorable foreign exchange rates. Dow Jones Newswire January 2010 Aseana to Develop $25m Kuala Lumpur Site Malaysian developer Aseana Properties plans to acquire a 70% stake in a central Kuala Lumpur development site worth over MYR87 million ($25 million). Overseas Property Professional
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1 December 2010
Asia Property
31 August 2010
During the first half the company completed the acquisition of a 70 per cent stake in upmarket residential development at Jalan Kia Peng, Kuala Lumpur.
A sale and purchase agreement was signed to acquire a four-star hotel (under construction and due for completion in 2012) in Kuala Lumpur Sentral.
A sale and purchase agreement was also signed with a wholly owned subsidiary of Ara Asia Dragon Fund to dispose of the office tower and retail mall of the 1 Mont Kiara development.
The company partnered with Prupim Vietnam Property Fund to develop the Tan Thuan Dong residential project together with Nam Long Investment.
Property Funds World (Web)
27 August 2010
Earlier this week Aseana said it has agreed to sell a 49% stake in one of its property development vehicles to the PRUPIM Vietnam Property Fund, part of U.K. insurer Prudential PLC.
Dow Jones
27 August 2010
Aseana said it will focus on its current strategy of getting cash from its projects and repositioning its property portfolio to capture what it called the "impending recovery and growth" of the property markets in Malaysia and Vietnam.
Dow Jones
The completion of the sale and purchase agreements is expected towards the end of 2010 and is conditional upon approval from the relevant authorities and the issuance of a certificate of occupation for the development. The third component of 1 Mont Kiara is a 34-storey building consisting of 186 office suites, 185 of which have already been sold to individual buyers. The total gross development value of this component is estimated to be RM196m (approximately USD61m).
Following the sale of the properties, the overall gross development value of the 1 Mont Kiara development (inclusive of office suites) is estimated to be RM529m (USD165m). The transaction is expected to result in net losses of approximately USD4m for Aseana, with the 25 per cent income tax charge for early disposal accounting for the majority of it. Aseana believes that the soft market for new office space in Kuala Lumpur also contributed to the lower selling price.
Dato Mohammed Azlan bin Hashim, chairman of Aseana Properties, says: The board believes that, given the generally depressed office market in Kuala Lumpur, RM333m is a respectable price. It decided that to sell the two properties at this stage and return capital to the company, rather than retaining them as investment assets, was in the best interests of Aseana’s shareholders. This strategy also has the additional advantage of avoiding the requirement to refinance loans due for renewal in early 2011.
The completion of the SPAs is expected towards the end of 2010 and is conditional upon approval from the relevant authorities and the issuance of a certificate of occupation for the development.
MAIN FACTS:
The consideration is expected to be in the region of RM217 million or about US$66 million, with a RM9 million deposit payable on signing the SPA, while the balance is payable upon issuance of certification of completion for the hotel by the relevant authorities.
Aseana noted that it is currently in advance negotiations with Starwood Hotel and Resorts Worldwide, Inc. to manage the hotel under its 'aloft' brand.
MAIN FACTS:
Aseana is unusual in that it is has been set up by property developer rather than a fund manager. The development manager Ireka Development is a subsidiary of the Ireka group of companies, which is listed in Malaysia. Ireka reversed five of its developments into Aseana at the time of its London flotation in April 2007. The current portfolio is 62% invested in Malaysia and 38% in Vietnam. Aseana believes that both markets have good prospects but that Vietnam has the greater growth potential. It took a 17.2% stake in a local development company, Nam Long, and the two firms are about to start their first development together.
The Vietnam economy has continued to grow at more than 5% a year but Aseana and its local partners have found land at realistic prices. Initial construction of a residential, office and retail development near to the business district of Ho Chin Minh City should start soon. Foreign investment in Vietnam peaked in 2008 but it is still significant. The economy continues to grow and commercial banks are reducing their interest rates by up to 1% until the end of the year. The Malaysian economy declined in 2009 but it is expected to bounce back in 2010.
Ireka Development gets an annual fee of 2% of NAV and a performance fee of 20% of the excess over a 10% hurdle rate. The performance fee is paid on realisation.
The Aseana share price slumped over 2008 and early 2009. Worries about property markets had an effect on the price but the reason for the later fall to around 10 cents a share was the sale of large stake by a US hedge fund. This hedge fund was forced to sell and it had a negative effect on the share price that it took a while to recover from.
The share price has been steadier so far this year. Even so, at 42 cents a share, the discount to NAV is 56%. If the net asset value which reflects the market values of properties is used then the discount to this figure of 125 cents a share is 66%. Aseana offers exposure to higher growth Asian markets at an attractive price.
The group’s current portfolio of investments includes 13 projects in Kuala Lumpur, Kota Kinabalu and Sandakan in Malaysia, and Ho Chi Minh City in Vietnam.
During the year the company acquired the remaining stake in the Sandakan Harbour Square development for USD4.2 m. It also completed Tiffani by i-ZEN, a luxury condominium project in Mont’ Kiara, with a total gross development value of USD110 m). Aseana acquired the remaining stake in the SENI Mont’ Kiara development for USD3.5 m in September 2009. It also sold Tower 2 of the Kuala Lumpur Sentral project, an office tower with approximately 500,000 square feet floor area, to an international real estate fund for USD133 m in September 2009. Aseana owns a 40 per cent stake in this project, which is due for completion in 2012.
In November, the company signed a joint venture agreement with Nam Long Investment to develop an upscale residential development in Tan Thuan Dong area, District 7, Ho Chi Minh City. It also signed a share subscription agreement and joint venture agreement with Ireka Corporation Berhad in December 2009 to develop an upmarket residential development in Kuala Lumpur City Centre. This project is expected to be launched by the first half of 2011, subject to development approvals from the authorities and market conditions at the time.
Dato’ Mohammed Azlan bin Hashim, chairman of Aseana Properties, says: “The board anticipates 2010 to be another busy and promising year for the group, as we work towards completing several key projects in Malaysia as well as the start of new projects in Vietnam.”
It said this was mainly due to the sale of properties in i-ZEN@Kiara I ($3.9m), Tiffani by i-ZEN ($91.9m) and Sandakan Harbour Square (Phase 2) ($18.7m), all in Malaysia.
Net profit before taxation was $4.3m (2008: net loss of $27.4m).
The group's current portfolio of investments includes 13 projects in Kuala Lumpur, Kota Kinabalu and Sandakan in Malaysia, and Ho Chi Minh City in Vietnam.
For 2009 Aseana, which is developing residential and commercial properties in Malaysia and Vietnam, posted a pretax profit of $4.3 million compared with a loss of $27.4 million a year earlier.
Revenue increased to $115.3 million from $38.4 million.
Its net asset value, or NAV, per share increased to 96 dollar cents from 84 dollar cents.
Chairman Dato' Mohammed Azlan bin Hashim said 2010 will see the completion of several key projects in Malaysia and the start of new projects in Vietnam such as the first phase of the International Hi-Tech Healthcare Park in Ho Chi Minh City due to begin construction in the second quarter.
The company, which bought back over 37.4 million shares in 2009, said it will continue to try to narrow the gap between the share price and the underlying NAV.
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The company and its investment manager, Ireka Development Management, intend to build an upmarket residential development on 44,000sqft site, to be sold to both Malaysians and foreign expats.
The site is located in Jalan Kia Peng, close to the Petronas Twin Tower and the unfinished Grand Hyatt Hotel.
“Kuala Lumpur City Centre (KLCC) is a proven and sought-after location for high-end residences in Malaysia and we are excited with this opportunity of being able to expand our portfolio of projects in thus prime area,” said Aseana’s chairman, Dato’ Mohammed Azlan bin Hashim.
“With the Malaysian and global economies showing signs of improvement and recent renewed interest in KLCC properties, we believe that the proposed development on the site will be well received when it is launched.”
