Beijing to offer electric, hybrid car subsidy

Beijing will promote the use of 30,000 electric and hybrid cars, build 100 recharging stations and provide 36,000 rechargers by the end of 2012, People's Daily reported Monday, citing the Beijing Municipal Science and Technology Commission.

Hyundai Motor begins to build third China plant

South Korean auto maker Hyundai Motor on Sunday started building its third China plant in Beijing, intended to meet rising demand after the firm's two existing Beijing plants exceeded their production capacity this year.

“To continue growing rapidly, China needs to make the next transition, from sweatshop economy to innovation economy. This transition is the one that has often proved difficult elsewhere. Once a country has turned itself into an export factory, it cannot keep growing by repeating the exercise. It can’t move a worker from an inefficient farm to a modern factory more than once. It cannot even retain its industrial might forever. As a country industrializes, workers will demand their share of the bounty, as has started happening in China, and some factories will start moving to poorer countries. Eventually, a rising economy needs to take two crucial steps: manufacture goods that aren’t just cheaper than the competition, but better; and create a thriving domestic market, so that its own consumers can pick up the slack when exports inevitably slow. These steps go hand in hand. Big consumer markets become laboratories where companies know that innovations will be tested and the successful ones richly rewarded. Those products can then expand into countries with less mature consumer markets. Look at the telephone, the personal computer and the iPhone and iPad, all of which were designed in the United States and are now sold around the world.”


--David Leonhardt

Govt rolls out more land for record number of homes

The government will roll out a bumper supply of land for new residential projects next year.

According to the Straits Times, 31 sites have been lined up for development of private homes, with 17 on the confirmed list.

This means two sites are expected to be released every month in the first half of next year.

The new sites on the confirmed list are mostly in suburban areas such as Punggol, Woodlands and Pasir Ris.
The Ministry of National Development said at least 14,310 new homes could be built, if all plots of land are taken up by developers.
The Straits Times also reported that prime land in the Marina Bay area may be released only in 2013.

Fri, Nov 26, 2010
AsiaOne

Meiban Group and i3 Lab Announce World’s Most Efficient LED Technology available for Car Headlamps

PRESS RELEASE

- IALED technology allows car manufacturers to integrate headlamps with lowest power
consumption and fewest LEDs

Singapore, 16 September 2010 – Mainboard-listed Meiban Group and its associate company
i3 Lab today announced a breakthrough technology that allows cars to incorporate headlamps
that offer higher performance, lower power consumption and other benefits.

Known as Intelligent Automotive Light-Emitting Diode (IALED), the revolutionary technology was
developed by i3Lab. IALED is currently believed to be the world’s most efficient LED headlamp
module with the lowest power consumption and the fewest light-emitting diodes (LEDs).

Currently, car headlamps that incorporate existing LED technology uses minimum of 7 LEDs
(Source: Just-auto Global Market Review of Automotive Lighting - Forecasts to 2015. (2009
Edition) whereas IALED technology uses 1 LED in energy-saving mode (low beam).

Due to the reduction of emitter count, headlamps designed using IALED will have a maximum
power consumption of 10 watts (low beam). This represents a savings of 35W of energy
compared to existing 45W halogen car headlamp (low beam) – with no loss of lamp brightness.
Internal tests conducted by i3 Lab show that an IALED-based prototype headlamp offers better
illuminance than halogen headlamps, which are the most commonly used headlamp. For
example, a 10W IALED-based prototype provides better illuminance than a 45W halogen bulb
because LED colour temperature (5600K) is closer to daylight.

These product characteristics of IALED give Meiban Group and i3 Lab a significant edge in
terms of developing state-of-the-art LED technologies for car headlamps. According to a 2009
global market review of automotive lighting by just-auto.com (the leading online resource for the
automotive industry), by 2015 high-performance LED headlamps will typically incorporate one
emitter count, down from the current figure of seven. Yet, IALED allows car manufacturers to
incorporate headlamps with as few as one LED (low beam) – not in five years, but today!

Using IALED, car manufacturers will be able to incorporate headlamps that offer better visibility,
higher brightness and reduced glare with lower power usage. Car headlamps that integrate
IALED will also have a longer lifespan and provide better fuel efficiency. This will indirectly lead
to reducing carbon emission.

“Today i3 Lab is proud to bring to the world a revolutionary technology IALED, allowing LEDs to
be affordable and available to all car makers, elevating the standard of car lighting system
globally. LEDs will no longer be only the privilege of luxury cars,” says Ms Carol Goh, Executive
Vice President of Meiban Group.

“Through clever innovation of LED headlamp technology, we are able to optimize the design of
IALED to achieve equivalent or better performance than existing products at an affordable cost.
We believe this will have huge potential and drive market adoption for LED lighting especially in
Electric Vehicles (EV), motorcycles and other similar applications. Our future innovations will
include more intelligent lighting system like AFL (Adaptive Front Lighting) WITHOUT moving
mechanism, that provides additional sensing and detection of environmental and adverse road
conditions for driving.” says, Mr Sim Lye Hock, Chief Technology Officer of i3 Lab.

To commercialise IALED, Meiban Group and i3 Lab intend to target manufacturers of low to
mid-range cars in Asia, which currently is a growing market.
To undertake further research and development on IALED-based products, we will expand our
Singapore R&D team to 11 man-strong and a new testing lab will also be set up. The R&D
facility will focus on LED automotive lighting such as Adaptive Front lighting that uses no moving
mechanism for directional headlamp. We believe the advancement in R&D efforts can make
driving experience safer and more enjoyable.

Meiban Group and i3 Lab also intend to embark on efforts to market the IALED technology by
attending major international car shows and trade missions organised by IE Singapore.
“IE Singapore assists local enterprises to export their technology to overseas markets and to
leverage on Singapore’s brand image as a hub for technology in Asia. We would like to
encourage traditional Precision Engineering companies to enhance their core product offerings
through innovation, research and product development. The IALED project is an excellent
example achieved through successful collaboration with a technology partner, and IE Singapore
is ready to support the internationalisation efforts with our enhancement schemes in the areas
of Branding, Design as well as IP Acquisition,” said Mr Yew Sung Pei, Assistant Chief Executive
Officer, IE Singapore.

“We are pleased to have home-grown companies like Meiban Group and i3 Lab bringing their
strengths together to innovate in technology, develop and manufacture new products to capture
emerging business opportunities in Asia. This is a good manifestation of the transformation of
our $23b precision engineering industry, extending our strong supplier capabilities into product
and solutions development,” said Mr Chang Chin Nam, Director, Precision Engineering,
Singapore Economic Development Board.

“Meiban Group believes in Innovation and the potential return on investment innovation can
bring. The partnership between Meiban Group and i3 Lab is a fine example of breakthrough
innovation that combines Meiban Group’s strengths in contract manufacturing with i3 Lab’s
expertise in optics engineering. Our IALED technology can revolutionise the car headlamp
market to improve performance, reduce cost for the drivers and help preserve the environment.

We are grateful to our Singapore Government agencies such as EDB and IE Singapore for their
support to local inventions and industry.” said Mr. George Goh, Executive Chairman of Meiban
Group Ltd.

New car numbers surge in Beijing last week

Beijing saw 18,000 new cars, or about 2,571 per day, on roads in the past week, said sources with Beijing Traffic Management Bureau Wednesday.

The increase was nearly 50 percent higher than the daily average of 1,900 new cars on the roads for the first three quarters of the year.

Aside from the sharp rise in cars on the roads, about 10,000 people obtained driving licenses last week, according to the sources.

By Nov. 21, there were 4.67 million cars and 6.197 million people with driving license in Beijing. The bureau predicted that, by the end of this year, the total amount of cars in Beijing would reach 5 million.

"Taxes soon to be increased on large cars and the rumor that Beijing might increase the license fee for cars in 2011 resulted in more new cars purchased," said Guo Yong of Beijing Asian Games Village Auto Market, one of the largest auto sellers in Beijing.

China's top legislature last month released a draft law on vehicle and vessel taxation. The draft law reduces taxes on energy-saving and clean energy-powered vehicles and increases taxes on large cars.

Beijing is among the most congested cities in the world. It has moved to ease congestion by implementing measures such as odd-even number traffic controls, the introduction of staggered working hours and increased parking fees in downtown areas.

TREK 2000: 'We Are Going To Do Big Business Next Year

IN TREK 2000’s roadmap, 6 million units of its FluCard would be produced for worldwide use next year and 13 million in 2012.

And by 2013, the FluCard would seize 20-30% - with 28 million FluCards produced - of the world’s Secure Digital (SD) card market.

Big numbers indeed, and they would be achieved through Trek’s contract manufacturer initially and, later, in conjunction with Toshiba Corporation’s in-house manufacturing capacity.

“From next year, we are going to do big business,” said Trek chairman and CEO Henn Tan to investors at Trek’s roadshow at CIMB yesterday.

The FluCard is to appear in a wide range of mid- to high-end Japanese digital cameras. 

In 2009, the total market for digital cameras worldwide was about 103 million units. They came fitted with an SD card, which stores photos – essentially a dumb device. 

On the other hand, the FluCard which is to replace the SD card enables photos to be wirelessly transferred between FluCard-enabled cameras.

With the FluCard, you can also upload photos from the cameras to the Internet. 

The FluCard is Trek’s passport to winning big. 

That, however, was not what a member of the audience at CIMB yesterday was keeping in view. Instead, he lamented that based on last year’s dividend payout of 0.5 cent a share, Trek’s running stock yield is just 1.1%.


Henn Tan made a reference to Toshiba, the second largest shareholder of Trek with an 17.8% stake, saying it had increased its stake in Trek after recognising the potential of the FluCard. 

The stake rose from 15.7% through the purchase of 6.3 million shares in married deals in August. 

“Toshiba’s CEO has said his company has invested in Trek not for dividends or capital gain. It’s because they have seen the technology and intellectual property of Trek – it’s something that synergises with the roadmap of Toshiba.”

All of Trek’s solutions are based on NAND flash memory. Toshiba has about 30% of the world’s NAND flash memory market, and is always looking for new applications.

Property rebuilds its value: the listed property sector, savaged in the crash, is back in play

THOUSANDS of small investors are still shocked from the losses they suffered when the listed property sector plumbed new depths last year

The sector remains unloved. Many of the stocks are trading at a discount. The average discount is about 10 per cent to the net asset value of the sector.

According to Deutsche Bank's research team, the Australian real estate investment trust sector was down 0.7 per cent for the three months to early this month, compared with a gain of 6.3 per cent in the broader Australian equities market.

"We struggle to see the A-REIT sector matching broader market returns," the bank's research team wroterecently.

In fact, the benchmark S&P/ASX A-REITs 200 Index has trailed the broader market equivalent, the S&P/ASX 200, since September 2007.

Investors were let down badly by a sector they had long trusted. It was a sector they should have been able to depend on for their regular dividend cheques.

"It is an untrusted sector," says Stuart Cartledge, principal of Phoenix Portfolio, a Melbourne-based fund. "Unfortunately people have tarred every trust with the same brush. It will take time to win back the trust of investors." .

Cartledge's Phoenix Portfolios Listed Property fund has consistently been a top three performer on the Mercer's Index for Australian Real Estate Securities.

The pain was deeper than in past market corrections. The world of big and small investors fell apart when the sector's market value dropped from $130 billion in July 2007 to $38bn in June last year and dividend cheques dried up.

The sector had enjoyed unprecedented growth in the lead-up to the global financial crisis in 2008, bingeing on debt to acquire assets to fatten fee incomes with exponential growth in assets under management.

And to make the figures stack up, creative financial engineering appeared in a sector that was previously conservatively geared. Several trusts borrowed to pay distributions.

The financial earthquake swallowed up the more adventurous vehicles, such as those in the stables of Babcock & Brown or Rubicon, managed by Allco Group.

Many prominent names have disappeared from the sector. Macquarie Group, for instance, known for its financial engineering skills, no longer has its name on listed property trusts. It has sold Macquarie Office, now Charter Hall Office REIT, and Macquarie Countrywide is now Charter Hall Retail REIT.

The better performing Macquarie Leisure Trust was internalised by its management and is trading as Ardent Leisure, while the heavily indebted Macquarie DDR, which owns US assets, is managed by its US management company and was renamed EDT Trust.

The crisis has cleaned up the sector for the investors, removing the hubris and excesses of the boom years.

In the cleansing process those with a sustainable business model were able to recapitalise to the tune of $19bn. They were forced to pay back debt and sell assets, revise their unrealistic payout policy, retreat from foreign markets and, most important, return property trusts to being boring rent collectors.

John Freedman, head of property at UBS, says the sector has reduced its average gearing from 40 per cent plus to between 25 per cent and 27 per cent. He says the sector has done away with financial engineering and focuses on its incomes from its core businesses to pay dividends.

Some trusts such as Stockland have a gearing ratio of 18 per cent and almost $2bn in liquidity. Others such as GPT, which went close to oblivion, have gearing of 25.5 per cent. Goodman Group brought in global institutional investors to provide capital for its growth. Further, A-REITs have adopted the global standard of distribution of a percentage of their incomes and for stapled trusts, which have development and other activities, some choose to pay incomes only from rental income and not development profits.

"What you get now is a more secure, sustainable, and realistic return. This is what property is all about," Freedman says.

The sector distributes 80 per cent to 90 per cent of its incomes, retaining the balance for capital expenditure.

Deutsche Bank has forecast 4.1 per cent weighted average earnings per share growth until 2012-13.

The bank says this will be the tough year for earnings for the sector but earnings will start to pick up from the 2011-12 financial year. On the back of higher earnings, distributions will also pick up.

Deutsche Bank says distributions fell 29.7 per cent in 2008-9 and 32.2 per cent the following year. However, it will be positive from this year.

Many fund managers are happy for trusts to retain earnings, saying this is a far more sustainable approach than paying out 100 per cent in dividends, and sometimes more than that, as they did previously. Freedman says the sector will offer income returns of 6 per cent to 8 per cent, with a further 3 per cent to 4 per cent coming from capital growth.

He adds there could be "a bit of upside" from any mergers and acquisitions.

The share price of the listed retirement village operator Aevum was languishing at about $1.10 for a long time before Stockland made an offer to take out all the units it did not own. After its initial bid, Stockland lifted its offer to $1.77 a unit.

Similarly, the ING trusts -- ING Office, ING Industrial ING Real Estate Entertainment, ING Real Estate Healthcare and ING Real Estate Community Living -- are trading on a takeover premium, fund managers say.

The ING Industrial Trust was trading at under 40c. A Goodman-led consortium is doing due diligence on the trust and will pay a price based on its net tangible asset of 57c per security to take it private. With a lower beta (market return), Freedman says movements in the prices of A-REIT securities are less volatile than general equities, compared with the past few years. He says for every 1 per cent movement in the broader equities market, A-REITs are typically moving about 0.75 per cent. This reflects the low gearing and payout ratios and secure state of the underlying property assets.

Melbourne-based asset allocator Ken Atchison, whose firm advises superannuation funds and some platforms on investment strategy in property, says at the present level investors are getting fair value.

Simon Marais, head of fund manager Orbis Australia, has probably made more money from the sector in the downturn than others because bottom-fishing is his specialty. Marais started buying A-REITs during the crisis. A classic opportunistic investor, he bought some of the worst performers and emerged as a substantial shareholder in many trusts.

In the past few months, he has exited from many when the price of some trusts quadrupled. But he admits some unit prices did not go up at all. He still has substantial holdings in several trusts including Valad Property Group, Mirvac Industrial Trust; APN European Property Group and Australian Education Trust.

Marais says the level of gearing in these trusts has stabilised and property valuation has started to edge up. His investment decision is based on the assets held by the trusts. Even if these trusts were to fail, he says the assets will still be worth something. Further, companies such as Valad have cut off their European operations and own some good income-producing Australian assets. But few investors have the foresight, nerve or available cash of Marais, who manages a $2bn fund, least of all small investors.

There was a lesson learned from the crisis, however: for all its faults the listed sector continues to provide liquidity and it had the ability to bounce back.

Chris Craggs, principal consultant with Australian Finance Group, says: "In hindsight, investors should have stayed with the listed sector.

"If we had put our clients' money into A-REITs from March last year [the trough] we would have seen outstanding returns."

Craggs says some small investors opted for direct property and invested in property syndicates. But he says these investors are in a quandary as their money is frozen in these syndicates.

Since 2008, property syndicates and unlisted trusts have been frozen because inflows have stopped. They have locked in investments valued at about $7bn.

Industry sources say there is no immediate prospect of these unlisted property fund managers getting out of the deadlock, which will not happen until the property market picks up again. Only then can their managers sell assets to raise the cash to meet to meet redemptions.

An additional problem is these trusts usually have secondary grade assets compared with blue-chip office towers or super-prime regional shopping centres in the listed sector.

Some financial planners say ruefully the decision to go to direct property was not a wise one. "Confidence is returning to listed property," says Peter Johnston, executive director of the Association of Independently Owned Financial Planners, which represents 2500 advisers.

"The smart money is starting to enter the market. This tells us that now is the right time to start investing," he says.

Johnston says credit remains tight or unavailable for developers, which means demand is not being fully met. Simplistically, this means higher rents, which will lead to higher values.

When all is considered, property has a place in a balanced portfolio, Craggs says.

Florence Chong From: The Australian November 24, 2010 12:00AM

Trek 2000 Stays On Track For Promising Growth With New Innovations

Trek 2000 Stays On Track For Promising Growth With New Innovations

Yuan fails test for IMF's SDR

WASHINGTON - China's yuan does not meet the criteria required for inclusion in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) valuation basket made up of the US dollar, euro, yen and the British pound, the fund said yesterday.

IMF directors urged the issue be kept under review, according to an emailed statement, which also signalled that the fund will begin next year an examination of the indicators used to select currencies. 

"Although China has become the third-largest exporter of goods and services on a five-year average basis and has taken steps to facilitate international use of its currency, the Chinese yuan doesn't currently meet the criteria to be a freely usable currency," the IMF said.

The yuan has gained 2.8 per cent versus the greenback after China scrapped a two-year peg on June 19 as policy makers responded to accelerating inflation and pressure from the US to allow appreciation. 

The G-20 nations will discuss including China's yuan in the currency basket for SDRs when it meets next year in France, Yonhap News reported, citing South Korean officials it did not identify.

The IMF this week cut the greenback's weighting in the SDR to 41.9 per cent from 44 per cent. The yen's weighting dropped to 9.4 per cent from 11 per cent, the euro's share rose to 37.4 per cent from 34 per cent, while the pound's rose to 11.3 per cent from 11 per cent. Agencies

Potential oversupply to hit prices

by Ku Swee Yong

05:55 AM Nov 19, 2010

Singapore is about 700 sq km in size and has roughly 890,000 public housing, 70,000 landed residential and 187,000 non-landed residential units. It is a small country with a small residential property market compared to 100 or more countries. However, the challenge of keeping tab on the physical supply of residential units in Singapore seems insurmountable, especially when trying to estimate future supply.

It seems easier to track completions for the private residential sector as the Urban Redevelopment Authority (URA) publishes quarterly data. Data for Housing and Development Board (HDB) completions and total HDB supply are available once a year from its annual reports. As we have no ability to forecast the HDB demolition pipeline, net additional supply of HDB stock is also impossible to predict.

Let's examine the anticipated supply of private residential units this year. In the URA's 1Q2006 publication, it was anticipated that 6,115 units will be completed this year. Most of those were "planned" and not yet "under construction".

Over the next few quarters, this number grew and by 3Q2007, it was anticipated that up to 21,451 units will get the Temporary Occupation Permit (TOP) this year. This is a 251 per cent rise over 18 months. During that time, there were worries that private residential prices were rising beyond the reach of HDB upgraders. The strong supply numbers sought to alleviate these concerns.

However, as the global economy faltered with Bear Stearns disappearing in March 2008 and Lehman Brothers collapsing in September 2008, the anticipated number of units getting TOP for this year dropped to a low of 5,394 in 2Q2009, coinciding with the worst point of most major stock market indices. This was only nine months away from 2010.

What happened? Did construction companies stop work? Did developers request construction companies to slow down? How did the anticipated supply ratchet down as quickly as it had sprung up?

Forecasts should get sharper and more precise as the event draws nearer. Yet those were turbulent times and the URA's survey of developers could have reflected high degrees of uncertainty too.

But the swing from a high of 21,000 to 5,400 and now back to around 10,000 makes challenging work for investment consultants.

Average annual completions in the last decade numbered about 8,000 units. In mid-2007, an investor holding a residential unit that should be completed this year would think that there was way too much supply coming onstream. He would decide to sell.

In the middle of last year, an investor holding a unit that should be completed this year would decide to hold, because there seemed to be inadequate supply coming onstream. However, the 5,394 units that were anticipated to be completed in the whole of this year were surpassed by June this year, when 5,786 units obtained TOP.

We anticipate this year will close off with 10,536 units completed, almost double the number that the investor in the middle of last year had thought and 32 per cent higher than the long term average of 8,000 units. It poses a challenge for us in advising clients who may want to time their investments and divestments.

What's the supply outlook for the next few years?

As we approach next year, I anticipate that we would also face an upsurge in TOP numbers. Although current official data show that 6,766 units will get TOP next year, my estimate is that we are likely to close next year with more than 10,000 units completed per year. There is a very high chance that many of the units anticipated to complete in 2012 will be ahead of schedule.

Two financial analysts I hold in high regard are Ms Wendy Koh and Mr Tan Chun Keong from Citibank Equities Research, who faithfully track and make projections for private residential completions. In their report Singapore Property - Increasingly Unfavorable Risk/Reward Ratio, they forecast a completion of over 10,000 units in this year and 11,000 each next year and 2012.

Responding to the thirst for private housing and for land to build private residential developments, the Government Land Sales (GLS) programme for 2H2010 has 18 sites on the Confirmed List and 13 sites on the Reserve List. These 31 sites can generate 13,905 units. This is the highest potential supply quantum in the history of the GLS programme.

The HDB has also stepped up its supply of new homes. In his National Day Rally speech, Prime Minister Lee Hsien Loong said 16,000 new HDB flats would be built this year and up to 22,000 next year. In addition, the HDB will accelerate the completion of flats to 2.5 years.

As for the total supply pipeline of private homes, there are almost 73,000 coming onstream within the next five to six years. As many as 55,000 units are expected to be completed by 2014. This represents more than 20 per cent of today's total stock of about 257,000 units.

Of the 19,535 units that are expected to get TOP in 2013, 11,621 are already under construction. Of the 20,504 in 2014, 8,768 are already under construction. We estimate the bulk of those "under construction" units will be completed ahead of schedule because building a typical condominium project takes 24 to 30 months. Exceptions would be very large-scale developments such as The Interlace that has over 1,000 units. Most projects that have begun construction should be completed in late 2012 or in 2013.

What does this all mean?

To sum it up, we believe that in the private residential space, there will be about 11,000 to 12,000 units completing next year and in 2012, and about 12,000 to 14,000 units completing in 2013 and 2014. The completions this year and next will be heavier in the prime districts but completions in 2013 to 2014 will be mainly in the mass market segment.

Adding to this are 16,000 to 22,000 HDB flats that will be completed per year. So, prices may slide from the potential oversupply rather than from the policy measures announced on Aug 30.

What about the demand side of the equation? Singapore's economic make-up has been overhauled and restructured in the 13 years since the Asian financial crisis. Job creation has been strong, with the services sector expanding and financial institutions abuzz with activity, and demand for housing will be driven by the population growth.

So while we may see a potential price drop of 10 per cent next year, the global economic recovery anticipated in 2012 may bring new levels of demand to Singapore.

Supply within three years we can confidently forecast. As for demand, we can be optimistic, but to be able to forecast whether it will match or exceed supply, I'll sign up for tea-leaves-reading classes.

http://www.todayonline.com/business/EDC101119-0000040/Potential-oversupply-to-hit-prices

Copied from InvestIdeasARA's AGM on 26/04/2010.

Vital points:
1) Dividend will be maintained at minimum 4.8 cents even after Bonus issue , so there will be an increase of minimum 20% on dividend , baase on 4.8 cents.
2) Cache will be on expansion path , so it will add to AUM of ARA.
3) The Islamic funds will be a property fund, partners are well know corporate or business figures. This shall be reviewed in due course.
4)ADF: They will raise another fund within the next 6 to 18 months.
5) CEO hinted even if ARA's PE is at 18X ( let alone only 13X now ), it is still very undervalued due to its tremendous growth in the next few years. That's mean the AUM of ARA will keep on increasing.

AmFIRST Real Estate Investment Trust aims to acquire a few assets in the Klang Valley to increase its asset size of more than RM1 billion

AmFIRST Real Estate Investment Trust (AmFIRST REIT), Malaysia's second biggest property trust by assets, is out to increase its asset size of more than RM1 billion and expects a deal to be done in the current financial year.

Its performance will also be driven by the expansion of major tenant AmBank Group and progressive upgrading of existing buildings to attract new tenants.

Am ARA REIT Managers Sdn Bhd chief executive officer Lim Yoon Peng said the trust manager also aimed to acquire a few assets in the Klang Valley.

"For every asset we acquire, we look at its returns or yield and potential capital appreciation," he said in an interview with Business Times in Kuala Lumpur.
The new acquisitions will be funded with cash after which AmFIRST REIT will issue new units to raise funds and cut its borrowings.

In Malaysia, REITs are allowed to borrow up to half of total assets.

Am ARA is fully owned by Am ARA REIT Holdings Sdn Bhd, which in turn is 70 per cent owned by AmInvestment Group Bhd and 30 per cent by ARA Asset Management (M) Ltd. ARA Asset Management is fully owned by the Singapore-based ARA AmFIRST (Singapore) Pte Ltd.

Lim said ARA Asset Management was actively looking at property acquisitions in Malaysia via its private real estate funds.

"Should the fund dispose of these assets in future and the yields are attractive, AmFIRST REIT has the option to acquire them.

"This will serve as a pipeline of properties to boost AmFIRST REIT's investment portfolio."

As of March 31 this year, AmFIRST REIT is the second largest REIT in the country, after Starhill REIT, in terms of assets under management of RM1.008 billion. Its portfolio comprises office (63 per cent), hotel (13 per cent) and retail (24 per cent) assets.

Bursa Malaysia-listed AmFIRST REIT has six properties: Bangunan AmBank Group, Menara AmBank Group and AmBank Group Leadership Centre in Kuala Lumpur; Menara Merais in Petaling Jaya, Kelana Brem Tower in Kelana Jaya and The Summit Subang USJ in Subang Jaya, Selangor.

AmFIRST REIT fully owns the properties, except for The Summit, a mixed development. AmFIRST REIT owns the Summit Hotel, nearly 70 per cent of retail space in the mall, and 12 out of 13 floors of the office tower.

AmFIRST REIT is repositioning the Summit mall and intends to buy retail lots that fit into its plans.

The upgrading works will cost about RM25 million, of which AmFIRST REIT's share will be 70 per cent based on its ownership of the stratified retail mall.

"This will be carried out in stages until the end of 2011," Lim said.

It will also spend RM3 million to refurbish the Summit Hotel, which will generate additional annual rental of RM200,000.

In the financial year to March 31 2010, AmFIRST REIT reported after-tax realised income of RM41.9 million, up 12 per cent from the previous year's. The increase was attributed to new lettings and higher rentals upon renewals.

During that period, rental revenue increased 5.5 per cent to RM98.2 million.

The property trust has declared an income distribution of 9.75 sen per unit, up 11.4 per cent from the previous year's.

Its unit price increased to RM1.10 from 85 sen, a dividend yield of 8.86 per cent.

AmFIRST REIT expects to maintain its performance for the financial year ending March 31 2011.

"We hope that we can fill up the buildings that have low occupancy. Secondly, as we reposition the buildings, we hope to get more tenants."

Lim said the outlook for commercial buildings had become more challenging with the greater supply of new offices in the central business district (CBD).

Commercial office rentals may soften when supply outstrips demand given that about 4.2 million sq ft of new office space will be available in future. The annual take-up is around 2.5 million sq ft.

However, it is unlikely to hurt AmFIRST REIT as three of its buildings in the CBD are tenanted mainly by AmBank Group, which occupies 78 per cent of the total net lettable area.

The buildings - Bangunan Ambank Group, AmBank Group Leadership Centre and Menara Ambank - also represent 34.6 per cent of AmFIRST REIT's portfolio.

"The average occupancy of these three buildings is 98.2 per cent and, with AmBank Group looking to expand, we should be looking at 100 per cent occupancy soon," Lim said.

As at March 31 this year, AmFIRST REIT's borrowing was RM413 million, which is 39.6 per cent of its total assets.

AmFIRST REIT, listed on Bursa Malaysia on December 21 2006, has an approved fund size of 429 million units. Its market capitalisation is RM471.9 million based on RM1.10 per unit as at March 31 this year.

By Business Times

QE2 could hit US$1.5t

SINGAPORE - Analysts expect the United States Federal Reserve to pump more cash into the economy if its US$600 billion ($773 billion) bond-buying plan fails to prevent deflation. 

Some market watchers say the Fed's so-called quantitative easing (QE2) programme could eventually grow to as much as US$1.5 trillion, despite criticism from other countries, including China. 

"It's almost as if the Federal Reserve is trying to put out a fire with a leaky bucket, but it's the only bucket it has," said Mr Kevin Logan, chief US economist at HSBC. "Is the Fed being reckless? I don't think so."

But critics of QE2 say it may not do much to spur growth, prevent deflation or bring down unemployment in the US. Liquidity may leak out of the US and cause asset bubbles in emerging markets, where prospects for economic growth are stronger. 

Mr Logan, though, is more optimistic. He expects economic growth in the US to quicken to between 3 and 3.5 per cent by the end of next year, and the jobless rate to ease to 9 per cent in a year, from 9.6 per cent now. Jonathan Peeris

BMW: China certain to be top market

BEIJING, Nov. 8 (Xinhuanet) -- BMW forecast last week that China will become its top market in the next decade at the same time competition sharply escalates.

"In the next five to 10 years, China will be the biggest market for all brands and become a big area of competition," said Christoph Stark, president and CEO of BMW Group Region China.

Stark made the remarks in the capital of the Tibet autonomous region, where the company organized a brand experience event for its flagship 7 Series saloon.

The German luxury automaker sold nearly 122,000 cars on the Chinese mainland in the first nine months this year, almost doubling the figure in the same period last year.

China auto sales up 34.76% in first 10 months, exceeding last year's total

Auto sales in China grew 34.76 percent from a year earlier to 14.68 million units in the first 10 months of the year, exceeding the total number of vehicles sold last year, the China Association of Automobile Manufacturers (CAAM) said Tuesday. 

Source:Xinhua