Preview Kg Baru landowners: Land price should be on par with Golden Triangle

KUALA LUMPUR: Many landowners in Kampung Baru, located in the heart of Kuala Lumpur city centre, believe that land there should fetch prices which are on par with values in other parts of the city's Golden Triangle.

Kampung Baru Development Association vice-president and Dr Mohd Yusof Ismail told City & Country that land values in Kampung Baru should be as high as those in the Golden Triangle where real estate transactions in 2006 - 2007 had breached RM2,000 psf.

The Association said the government and developers should therefore consider this when acquiring land here for redevelopment. Kampung Baru is slated for redevelopment under the Draft Kuala Lumpur City Plan 2020.

The association, which represents landowners in Kampung Baru, has presented its views on the redevelopment plans in a memorandum to Kuala Lumpur City Hall and in a public hearing on April 3.

"We are not against the redevelopment plan but there are weaknesses that we have to address," says Mohd Yusof who holds a PhD in urban planning from Cornell University in the US.

According to data in the Draft City Plan, Kampung Baru spans over 378.93 acres of which 225.89 acres (874 lots) are in an area gazetted as Malay Agricultural Settlement since 1897.

It was gazetted to protect and preserve Malay land ownership. Such land, both undeveloped and developed, cannot be transferred, sold or occupied by non-Malays.

Henry Butcher Malaysia's data on recent transactions in Kampung Baru show that prices of land here range from RM200 to RM400 on the average.

Henry Butcher chief operating officer Tang Chee Meng agrees that land values here are not reflective of its prime location within the city centre.

In comparison, indicative land values from Henry Butcher show that values in the KLCC vicinity are around RM1,500 to RM2,000 psf.

"Land values appreciate due to pressures of development. Compared with the hectic pace of development in the Golden Triangle, there was hardly any development in Kampung Baru.
"Furthermore, non-Malays are prohibited from owning land in Kampung Baru while the Golden Triangle do not have such restrictions," he cited as reasons for the difference in values.

Source:  The Edge Malaysia April 2009

Sunrise wins best residential awards in AsiaPac Property competition

KUALA LUMPUR: Two luxurious condominiums under construction by Sunrise Bhd have won best residential awards in the Asia Pacific Property Awards 2009 competition.

10 Mont'Kiara

Sunrise said on April 29 that 10 Mont’Kiara won in the category for “Best High Rise Architecture in Malaysia” and 11 Mont’Kiara for “Best High Rise Development in Malaysia”.

The Asia Pacific Property Awards were established in 2008 and were selected by independent judges selected by the International Property Awards organisers.

Twenty-one countries in the Asia Pacific zone took part in the coveted property awards this year which was sponsored by CNBC Arabia Television.

11 Mont'Kiara

The luxurious bungalow-in-the-sky twin-tower 10 Mont’Kiara boasts 332 lavish units with sizes ranging from 3,478 sq ft to 4,090 sq ft and sprawling penthouse units of 7,500 sq ft.

The iconic Green Mark-rated 11 Mont’Kiara presents five uniquely patterned curvilinear towers with a total of 339 units each enjoying a grand 270º view. With two private abodes per floor, unit sizes start from 2,700 sq ft with a choice of eight unique designs.

Limited units in both condominiums, located next to each other at Jalan Kiara 1, are available for sale.

Source: The Edge Malaysia 29 April 2009

Sam Zell: Bottom Is Here on US Housing

Real estate legend Sam Zell says the economy and the residential real estate market have seen their worst.

The government’s massive fiscal and monetary stimulus is having a beneficial effect, he tells Bloomberg TV.

“There is no question it will have a positive impact on the economy,” Zell says.

“More importantly, it has had a positive impact on confidence levels. And confidence levels are extraordinarily important in terms of extracting ourselves from this recession.”

As for residential real estate, “the supply-and-demand scenario and the creation of new households are leading to a bottoming out of the single-family market,” Zell says.

“I think this summer we will begin to see equilibrium, bringing costs of housing down to the point where they are very attractive.”

At the same time, he says, “we will have absorbed an enormous amount of foreclosed inventory.”

Discussing commercial real estate, Zell says, “it has a lot higher debt component, and it’s ultimately all about transactions.”

But, since July 2007, there have been few transactions, he points out.

“I think you’ll see a lot of change of ownership in commercial real estate as a result of overly optimistic forecasts that created the debt,” says Zell, who was once the biggest commercial real estate owner in the United States.

“Banks will either foreclose or come up with restructurings that will ultimately allow properties to trade.”

Donald Trump, too, also maintains that real estate has hit bottom.

The flamboyant New York developer recently told Associated Press, “I think real estate is a great investment right now.

Source: Morningnews.com April 2009

SAM ZELL - VERY FEW COMMERCIAL REAL ESTATE FINANCINGS IN 2003 - 2007 ARE ABOVE WATER

Following up on the theme Zero Hedge discussed that the vast majority of commercial real estate backed loans have negative equity, real estate tycoon Sam Zell yesterday, in a presentation to the Milken Institute, said that "you have a scenario today where you have very few '03 to '07 financings that are above water. You have more debt than you have value." As owners of these properties have more debt than value, sales of properties over the next two to three years will be minimal as none of them would result in adeleveraging. Instead Sam Zell says "investors will buy distressed debt as these properties go into foreclosure."

Sam Zell's observation was in response to the disclosure by David Simon, CEO of SPG, that the REIT had attempted to purchase real estate from bankrupt rival General Growth Properties shortly before it filed for chapter 11. Per a Bloomberg article:

“They didn’t realize they were a distressed seller,” Simon said in a panel discussion at the Milken Institute Global Conference today in Beverly Hills, California. Few commercial real estate sales are being completed because sellers aren’t willing to take losses on their investments, Simon said.

This goes to the heart of the CRE problem: as no owners of negative equity properties are motivated to sell (why contribute equity to force a sale), existing properties will merely see continuing declining cash flows with no underlying property ownership exchanges, until either the loan defaults or the borrower (REIT xyz) files for bankruptcy as interest costs overwhelm cashflows. The last fact is the reason why Scott Minerd, CEO of Guggenheim partners said "Equity players have every reason to keep playing for time." That explains all the recent REIT dilution actions, who, together with any investors who "dollar cost average down" on their REIT positions, are merely hoping the U.S. government will be successful in reinflating the housing and rent bubbles yet again and property values rise above loan values, resulting in at least nominal equity value. For investors who like betting on those kinds of odds, Craps or even Black Jacks may be a better expression of risk appetite. 

Source: Zero Hedge Blog April 2009

NEW YORK CITY HOME SALES DROP WORSE THAN AUTOS

HERE'S a headline to di gest if you own a Big Apple apartment: "Drop in New York Real Estate Sales Worse than Auto Industry's."

Yes, read it and weep: Quarterly sales reports from Halstead Property and Brown Harris Stevens show a 58 percent dip in sales in Manhattan in the first three months of the year -- far worse than even the car industry's 45 percent plunge.

Message to the Obama White House: where's the bailout for legions of suffering New York City real estate brokers?

All kidding aside, it's worth noting that this week, while investors at the corner of Wall and Broad streets were celebrating the 22 percent rise in the Dow Jones industrial average since March 9, a few miles north brokers and apartment owners were finding themselves adjusting to a brutal real-estate bear market, one that has now squarely landed on the banks of the Hudson. And that raises the multi-trillion-dollar question: Can stocks continue to rise, even if the housing market still has far further to fall?

This week, the latest Case-Shiller home index numbers posted their worst declines yet -- with every major city posting hefty double-digit drops in the first quarter -- a considerable feat, considering that prices have already plunged an unprecedented 29 percent, on average, since peaking in 2006.

In New York prices were off 16.6 percent in the last three months.

The quick freeze in the tri-state real-estate market since Lehman Brothers' collapse shows the impact of mass layoffs on home sales and prices.

Listen to what David Rosenberg, the North American economist for Merrill Lynch had to say, because he's been spot-on about the severity of this housing implosion all along: "We desperately need to see housing prices stabilize to put in a definitive bottom [in the stock market]."

Unfortunately, he sees little on the horizon to make him sanguine on the home front anytime soon. "Looking ahead, we believe that the bottom in housing is still several quarters away and there is at least another 15 percent downside potential," adding that prices may not stabilize for three years.

Which brings us back to Wall Street's spring fever, and what many believe is the start of a new bull market for stocks. Perhaps so, but given the fact that housing led us into this mess, it's a fair bet that it will take a tangible upturn in real estate to bring us out of it. Real-estate cycles can be painfully long--often spanning a decade or more from peak to trough. If so, New York, we're just getting started.

Source: New York Post 1 May 2009

McDonald's saga - The ‘c’ is back in McCurry Restaurant

KUALA LUMPUR: P. Suppiah cannot stop smiling as he stuck the alphabet ‘c’ back onto the signboard of his shop.

That simple gesture by the owner of McCurry, an Indian restaurant in Jalan Ipoh, marked the happy ending to his eight-year David and Goliath court case against US fast food giant McDonald’s.

For years, Suppiah’s outlet was known as M Curry as he fought a suit filed in 2001 by the fast food chain to stop him from using the ‘Mc’ prefix, claiming the name could cause confusion and lead people to associate his products with McDonald’s.

McCurry returns: Suppiah putting the ‘c’ back onto the signboard of his shop Thursday. The simple gesture marked the end of an eight-year court battle against US fast food giant McDonald’s to keep the name of his Indian restaurant in Jalan Ipoh.

Suppiah lost the first round after the High Court ruled in McDonald’s favour in 2006. However, round two went to him on Monday when the Court of Appeal held that there was no evidence to show McCurry Restaurant was passing off McDonald’s business as its own.

“We were almost losing hope, but we are glad that the decision was in our favour,” Suppiah’s wife, Kanageswary, said.

The restaurant serves a variety of Indian food including tosai, roti canai, North Indian cuisine and common Western dishes like hot dogs.

Suppiah said the name of the restaurant was meant to be an abbreviation of Malaysian Chicken Curry, adding it was coincidental that it ended up with the ‘Mc’ prefix.

“McCurry is also an existing Scottish name,” he said, adding that their logo of a chicken with both thumbs up was also vastly different from the famed Golden Arches.

Regular customer, Mohd Radzi, said as long as the food was good, it did not matter what the name of a restaurant was. “But I am happy that justice has been served for a place where I can read my newspapers and enjoy good food.”

In its statement of claim, McDonald’s said it created the prefix ‘Mc’ as a trademark and that with the usage of the prefix ‘Mc’, together with the word ‘Curry’, McCurry Restaurant, which was formerly known as Restoran Penang Curry House (KL) Sdn Bhd, had misrepresented itself as being associated with McDonald’s business.

The Court of Appeal disagreed.

Judge Datuk Gopal Sri Ram, in delivering judgment, said McCurry’s Restaurant signboard would not result in reasonable persons associating McCurry with the McDonald’s mark.

He added that the fact that McCurry Restaurant chose the name ‘McCurry’, could not, by itself, lead to the inference that it sought to obtain an unfair advantage from the usage of the prefix ‘Mc’.

Still, the nightmare may not be over as McDonald’s still have the right to file an appeal against the decision in the Federal Court.

Source: The Star 1 May 2009

Mallaysian defaults set to rise

KUALA LUMPUR — Malaysia's corporate debt default rate may rise to 4.8 per cent this year in a “worst case scenario”, which may be the country's worst showing since the Asian financial crisis in 1998, RAM Rating Services Bhd said yesterday.

“Because of deteriorating credit quality, defaults are expected to rise,” Liza Mohd Noor, CEO of the ratings company, told reporters. Companies “with significant dependence on export earnings will be the most vulnerable as the global demand slump results in weaker internal cashflow”.

Malaysia's economy may shrink one per cent this year, which would be its first contraction in a decade, or expand by that amount at best, as exports slump, the government has said. About 8.8 per cent of corporate issuers in Malaysia defaulted on their debts in 1998 at the height of the Asian crisis, RAM said in a statement.

“In times of economic slowdown, refinancing from banks and debt markets, as well as access to equity markets and sales of assets, may not be easily accomplished,” said Liza. RAM's forecast for the default rate, under its base case scenario, is 1.8 per cent this year, she said.

Many issuers have indicated increased difficulty in refinancing, with more companies considering asset sales to meet debt payments, Siew Suet Ming, RAM's head of structured finance ratings, added.

Still, the default rate won't be as bad as in 1998 because Malaysian banks are better capitalised and there's enough liquidity in the market, she said.

About 15 per cent of issuers had their debts placed on a negative outlook or put on “rating watch” with negative implications, RAM said. There will be more downgrades than upgrades in 2009 as the global economic slowdown worsens during the year, it said. Companies in the industrial and manufacturing industry will be more vulnerable to rating adjustments, it said.

Two companies, including Transmile Group Bhd, defaulted on debts of about RM300 million last year, or 1.05 per cent of the total number of issuers covered by RAM, it said in a statement. That compares with 1.04 per cent in 2007. 

Source:  Business Times Singapore 30 April 2009

KUALA LUMPUR — Malaysia's corporate debt default rate may rise to 4.8 per cent this year in a “worst case scenario”, which may be the country's worst showing since the Asian financial crisis in 1998, RAM Rating Services Bhd said yesterday.

“Because of deteriorating credit quality, defaults are expected to rise,” Liza Mohd Noor, CEO of the ratings company, told reporters. Companies “with significant dependence on export earnings will be the most vulnerable as the global demand slump results in weaker internal cashflow”.

Malaysia's economy may shrink one per cent this year, which would be its first contraction in a decade, or expand by that amount at best, as exports slump, the government has said. About 8.8 per cent of corporate issuers in Malaysia defaulted on their debts in 1998 at the height of the Asian crisis, RAM said in a statement.

“In times of economic slowdown, refinancing from banks and debt markets, as well as access to equity markets and sales of assets, may not be easily accomplished,” said Liza. RAM's forecast for the default rate, under its base case scenario, is 1.8 per cent this year, she said.

Many issuers have indicated increased difficulty in refinancing, with more companies considering asset sales to meet debt payments, Siew Suet Ming, RAM's head of structured finance ratings, added.

Still, the default rate won't be as bad as in 1998 because Malaysian banks are better capitalised and there's enough liquidity in the market, she said.

About 15 per cent of issuers had their debts placed on a negative outlook or put on “rating watch” with negative implications, RAM said. There will be more downgrades than upgrades in 2009 as the global economic slowdown worsens during the year, it said. Companies in the industrial and manufacturing industry will be more vulnerable to rating adjustments, it said.

Two companies, including Transmile Group Bhd, defaulted on debts of about RM300 million last year, or 1.05 per cent of the total number of issuers covered by RAM, it said in a statement. That compares with 1.04 per cent in 2007. 

Source:  Business Times Singapore 30 April 2009

Few projects abandoned in Johor in last 10 years

An interesting article from the southern state of Johor...

JOHOR BARU: House buyers in Johor should not be unduly worried that housing projects in the state will be abandoned during the current economic downturn.

In the last 10 years, the state had seen only 2% of projects abandoned, said Real Estate and Housing Developers Association (Rehda) Johor branch chairman Lee Kim Chai.

He said most of the residential and commercial properties were close to completion and those completed were already issued with certificates of fitness.

“House buyers are becoming more knowledgeable and discerning and they will shop around before making their purchase,” Lee told StarBiz at the launch of the Malaysia Property Expo 2009 recently.

Home buyers browsing at the Malaysia Property Expo 2009 at Johor Baru City Square shopping centre

The four-day event saw 31 developers offering 8,000 units of mixed properties valued at more than RM2.7bil.

Lee expected most developers would not launch new products under the economic conditions now but would focus on selling off their completed units.

“Developers are also working closely with banks to offer different financial packages to attract buyers including low interest rates on approved loans,” he said.

Lee said given the abundance of real estate available, the Johor property scene would be market-driven with prices becoming more competitive.

Meanwhile, Asiatic Land Development Sdn Bhd vice president Habibullah Khong Sow Kee said the take-up rate for its two projects in Johor was encouraging during this downturn.

The projects are the Asiatic Indahpura township in Kulai covering an area of 2,832.79ha and Pura Kenchana township in Batu Pahat on a 3,642.17ha site.

He said 404.65ha had been developed in the Kulai project to date with 5,000 units of residential and commercial mixed properties and 129.49ha in Batu Pahat with 2,000 units of mixed properties.

“Demand for property in secondary towns such as Batu Pahat is good as people there are going for lifestyle living instead of just buying homes,” said Habibullah.

Asiatic Land is a wholly-owned subsidiary of Asiatic Development Bhd and a member of the Genting Group.

Source: The Star 1 May 2009

Stress Test Results Bode Ill for Real Estate Finance

Capitol Hill

WASHINGTON, DC-The Treasury Department is getting ready to release the so-called stress test results it has been putting banks through for the last several weeks. These will be the final grades for the 19 top banks that were the first to jump through Treasury’s hoops – the final grades that is, for the assets that they are holding and how well they can perform in a severe economic downturn. After that, Treasury will begin the process of stress testing some 8,000 regional and commercial banks.

The real estate community is becoming more nervous as the day of reckoning approaches. Leaks and obscure comments by governments have led many to the conclusion that the stress tests will result in banks having to dispose of non-performing assets – many of which are real estate. The end result, it is feared, is that banks will be so spooked by the results that what little lending they are providing to real estate will cease.

“Many banks that are profitable today are getting increasingly nervous,” says an executive from a consulting firm that assists banks with the stress tests. If an otherwise healthy bank is found to have inadequate capital for its assets, it may be forced to take government assistance – along with the government strictures on executive compensation.

Many banks will become too nervous to lend in this scenario, this person tells GlobeSt.com. “The only financing that will be available will be loans that have a clear-cut exit strategy that is well defined.”

Furthermore, the results expected for the top 19 banks will not necessarily be a guide for how Treasury will evaluate second tier banks. “I don't think the government will be as charitable as it works its way down the ladder. The government can’t afford to have the top 19 banks go out of business so it will be easier on their assets. But smaller banks will not be as lucky.”

The coming results do not bode well for banks or real estate lending, Walter J. Mix III, managing director
of the Los Angeles-based consulting firm LECG, agrees. 


“For all but a few banks it is difficult to raise capital in this market -- some would even say that the capital markets are closed down for many of the banks,” he tells GlobeSt.com. “The next step in that analysis is if a bank already has a weak capital base and is required to mark down loans, one can see how for many of the banks that would mean a decreased capacity to originate new loans.”

Not everyone agrees with this grim view of the future.

“As someone who is working closely with regional and community banks I can tell you that stress tests are in part motivating banks to dispose of certain questionable assets on their balance sheets which they otherwise would have worked to keep,” David Schechtman, senior director of Eastern Consolidated’s Loan Sales and Turnaround Group, tells GlobeSt.com. But, he says, the ultimate conclusion to that process is not necessarily a complete pull back in real estate lending.

“They will sell the assets and raise more equity. And when they have more equity they will make more loans.”

Of course banks haven’t been lending very much in recent months; Schechtman, however, thinks that is going to change.

He recently attended a Mortgage Bankers Association event in New York and found that many of the attendees – loan orginators – are underwriting new deals.

“They are working to put more money out. At the very least they are willing to look and are issuing quotes.” It’s not a return to 2007, though. “Everybody remains very realistic. People are lending on assets that have existing income. Projected income [lending] is still off limits.”

The worst impact of the stress tests will be more psychological, he says.

The leaks and rumors coming out now about the stress test results contradict other signals sent by Washington – namely relaxing the accounting mark to market standard several weeks ago. “Think how this looks from a bank’s perspective: they were told they were no longer required to mark to market various assets – and while many of these regulations do not apply to banks, some of these do.”

On one hand Washington is helping banks out by allowing them to keep troubled assets on their books. Then weeks later it says these ‘good loans’ are problems, Schechtman says. “It does not raise the confidence level in the government.”

It is ironic because there is a sizable contingency in the analyst community that does not believe the stress tests will have that much practical impact on the financial system, other than the volatility the release of the results will surely cause.

“I never thought that the stress tests by themselves would be important in the near term,” Leo Tilman, former Bear Stearns & BlackRock strategist, now president of the strategic advisory firm L.M.Tilman & Co., and author of the book “Financial Darwinism” tells GlobeSt.com. “In the long term they send an important message, which is regulatory capital is meaningless when talking about capital adequacy.”

Source: GlobeSt.com

Property Mogul Sam Zell's Take on Commercial Real Estate

Money man Sam Zell’s reputation has been somewhat tarnished by the record speed bankrupty of the Tribune Co., the newspaper publisher he bought for $12 billion. But the self-made mogul made billions over the years in distressed real estate. His thoughts on the market are still worth hearing. Here’s what he said April 27 at the annual Milken Institute Global Conference in Los Angeles.

“We all drank too much Kool-Aid. Between 2003 and 2007, 50% of all commercial real estate traded. It ended up being over-leveraged. All cash buyers like Calpers played the leverage game instead of buying for cash. Very few who bought from 2003 to 2007 are above water. You can call it credit crunch, seller’s strike, buyer’s strike, either way you have more debt than you have value. We won’t see new equity players until the banks foreclose. It’s going to be a couple to three years before the ownership structure changes. Prices are down 25% to 30% on what’s sold. 

The reality is there ain’t much trading. One of the great lessons of Confucius is bankruptcy courts don’t respect maturities. That’s your General Growth (Properties) story. Sales occur when there are prospects. Tell me where the prospects are? I’m happy to buy a hotel when you can tell me the President will stop pissing on conventions. If owners have no equity, owners have no incentive to do anything. Who’s going to put up tenant improvement money? Publicly held REITs have gone down 65%, arguably too far. That’s real daily pricing. You have a lot of loans at floating rate, you don’t miss payments at 1-2%.” 

Source: Businessweek 30 April 2009

Malaysian house buyers cautious due to fears of income security

PETALING JAYA: Potential house buyers are still wary about making property purchases despite lower mortgage rates as the economic outlook remains uncertain, analysts said.

Average mortgage rates have fallen to about 3.5%, but at the same time banks have been more stringent on the approval of loans. The average mortgage rate is obtained from base lending rate (BLR) of 5.55% minus 1.5% to 2.4% for housing loans (or effective annual rates between 3.15% and 4.05%), depending on the amount and tenure of loans, and the package customers sign up for.

OSK Research said the attraction of lower mortgage rates had been superseded by fears of income security amid a deteriorating economic outlook.

“For those who are still financially sound, most would rather wait a while longer to snatch up better bargains a few more months down the road. Some are hoping for developers to come up with more creative and attractive perks and some are also waiting for prices to drop further, if any, before they are convinced to buy,” the OSK analyst told StarBiz.

The research house said downside risk for landed properties appeared limited compared to luxury condominiums, with the demand for landed properties expected to return by year-end.

“Most of the homebuyers in this segment are cash-rich and not highly leveraged. Given the accommodative interest rates today, any forced-selling or foreclosures of properties like the one we saw during the 1997/98 Asian Financial Crisis will be limited in this downcycle,” it said.

OSK Research expects the demand for luxury condominiums to decline by 30% to 40% in 2010 from 2008, with luxury condo prices already currently down by 15% to 20%.

An analyst from Kenanga Research agrees that the bearish economic outlook is making potential buyers hesitant about buying properties now.

“What if this (sign of market recovery) is just one-off data? What we need is for the sentiment to improve,” she said, noting that only 60% of bookings had been translated to actual sales compared to almost 100% previously due to more stringent loan requirements.

Jupiter Securities Sdn Bhd head of research Pong Teng Siew said that with the mortgage rates of 3.5% and effective cost of funds of 1.5%, banks net interest margin should be about 2% now.

“But cost of funds for smaller banks such as EON Capital Bhd, RHB Capital Bhd, AMMB Holdings Bhd are higher (slightly over 2%) because of higher interest bearing liabilities,” he told StarBiz.

A house buyer contacted by StarBiz said his current mortgage loan interest rate was 3.15% for the first two years and 3.45% for the remaining tenure.

He recently signed up for a 20-year conventional home loan from Alliance Bank Malaysia Bhd for the purchase of a double-storey house.

He is paying about RM1,700 per month for his RM300,000 loan.

His loan package included a one-time payment of RM2,500 for mortgage reducing term assurance, legal fees and stamp duty.

Other banks are offering similar mortgage rates.

For example, RHB Bank is charging BLR minus 2.1% for housing loans that range from RM250,001 to RM500,000, while Hong Leong Bank Bhd is offering BLR minus 2.2% for a RM300,000 mortgage loan.

Malayan Banking Bhd uses a property’s location as one of the criteria to determine interest rate, but is still offering rates in the region of BLR minus 2%.

All these banks have BLR of 5.55%.

Source: The Star 29 April 2009

McDonald's loses trademark battle in Malaysia

Court says McCurry restaurant gets to keep its name

When it comes to its famous trademarks, McDonald's Corp. is known for McFightin'. But it came up a loser Wednesday in Malaysia, where a court ruled that an Indian restaurant can keep the name McCurry.

The case highlights a never-ending battle for big consumer-products companies: staving off alleged attempts to hijack their marquee brands.

"When you get a [trade] mark like McDonald's or Coca-Cola or 7-Eleven, it's a constant policing effort," said Craig Fochler, a trademark lawyer at Foley & Lardner in Chicago. And McDonald's has a "history of being very aggressive" when it believes someone is trespassing on its trademarks, he said.

The Oak Brook-based fast-food giant took offense at McCurry Restaurant, a Malaysian joint that maintains its name is an abbreviation for Malaysian Chicken Curry. McDonald's considers the "Mc" prefix to be its intellectual property.



The company long ago established that premise in the United States, successfully forcing two restaurant companies, McBagel's and the vegetarian McDharma's, to change their names.

When companies such as McDonald's wage trademark wars, they do so because they believe consumers are being confused by like-named entities, said Jeffery Handelman, a trademark attorney in Chicago with Brinks Hofer Gilson & Lione. They're also trying to protect their reputation in case similarly named firms have poor products.

But Malaysia's Appeal Court said Wednesday that McDonald's can't claim an exclusive right to the "Mc" prefix, overturning a 2006 court ruling. The Appeal Court ruled there was no proof that McCurry misrepresented itself to the public and confused consumers, Malaysia's New Straits Times reported. Besides, McCurry serves Indian food, the Appeal Court said.

In a statement, McDonald's said it was disappointed with the court's ruling, but declined to comment further because it has not seen the written decision.

Fochler said consumer-products giants such as McDonald's aren't always as successful in trademark infringement cases overseas as they are here. Still, the company has logged some substantial victories.

In the Philippines, it won a 16-year battle in 2004 to protect its Big Mac trademark when that country's Supreme Court ordered L.C. Big Mak Burger Inc. to change its name and fork over damages.

And then there are its famous golden arches. The company currently has a beef -- it hasn't yet morphed into a lawsuit -- against a strip club in Sweden for allegedly infringing on the arches.

McDragan's, as the club is known, has a sign featuring a red "M" that resembles the golden arches but also connotes a woman's breasts. McDonald's has asked the club's owner to remove it. McDonald's said the sign is not only an unauthorized use of the golden arches but also "distasteful" to boot.

Source: Chicago Tribune 30 April 2009

CB Richard Ellis Swings To 1Q Loss On Charges, Falling Revenue

CB Richard Ellis Group Inc. (CBG) swung to a first-quarter net loss as the real-estate services company reported $23.6 million in one-time charges and a big decline in revenue.

Brokers who lease and sell commercial real-estate properties have been hurt as the recession causes companies to trim office space and tighter credit has made it harder to buy property.

CBRE reported a net loss of $54.4 million, or 14 cents a share, compared with year-earlier net income of $15.3 million, or 10 cents a share.

The latest results included $15.7 million in write-offs from a credit agreement amendment reached last month and $7.9 million in expenses related to severance and office-closure costs. Excluding items, the loss would have been 3 cents a share, compared with year-earlier income of 15 cents.

Revenue slid 28% to $890.4 million.

Analysts polled by Thomson Reuters expected per-share earnings of 2 cents on revenue of $983 million.

Revenue in CBRE's real-estate development and investment business in the U.S. decreased 25% amid a drop in construction revenue, as the segment reported an larger operating loss of $18.8 million compared with an operating loss of $10.3 million.

Global investment-management revenue decreased 5.6% amid lower acquisition, disposition and incentive fees. Still, the segment swung to an operating profit of $6.7 million from an operating loss of $2.1 million a year ago.

CBRE said it has cut, or targeted for elimination, $475 million to $500 million in operating expense cuts from 2007 levels, including $385 million that have already been implemented.

Last month, the company said its lenders agreed to ease the terms of its credit agreement, giving CBRE more flexibility to navigate weak market conditions. The news prompted investment ratings upgrades from JMP Securities and JPMorgan.

Shares fell 2.6% to $6.40 in after-hours trading. The company's stock has lost nearly two-thirds of its value from September.

Source: Morningstar 29 April 2009

Abandoned Plaza Rakyat project stands out like a sore thumb in KL City

THE Plaza Rakyat project in Kuala Lumpur was launched at about the same time that the Suria KLCC was being built in the mid-90s.

However, while the iconic twin towers stand majestically tall today, the Plaza Rakyat project has been left uncompleted and stands like a sore thumb at the busy Pudu area.

While many of the buyers have now given up hope on the RM1.4bil project after waiting for almost 15 years, some are still keeping the fingers crossed, hoping that it could be revived as they had invested heavily in it.

Retiree Steven Yong, 65, said when the Plaza Rakyat project was launched in 1996, he paid a substantial amount in downpayment for two shop lots of different sizes, one on the first floor and another on the fourth floor, both costing a total of nearly RM600,000.

“During that time, there was a huge publicity about the prestigious project and it was very promising. It had a sense of security and modernity to it, and it sounded like a real good investment,” Yong said.

“My late wife, who was running a hair salon at the Central Market bought a unit with the intention of moving her business into the Plaza Rakyat. But my wife didn’t live to see her dream come true as, even till today, the project has yet to be completed,” he said.

“Now my son Will has taken over the salon, which is still at Central Market, and we are hoping that the Plaza Rakyat project will be revived,” Yong said.

He said the developer had promised to complete the building in three or four years at the time of purchase but till today, despite various promises, the project was still stalled.

“In 2005, the project developer was asked by the then Federal Territories Minister Datuk Seri Zulhasnan Rafique to provide a timetable of its work schedule till completion, but till now, there is no sign of any progress,” he said.

According to Yong, there are about 200 buyers who are in such a dilemma like him.

“The first floor of the building is completed before work was halted. I am still servicing the bank loan interest for my first floor unit although I am paying nothing for the fourth floor unit,” he said.

The Plaza Rakyat project, developed by Wembley Industries Hol-dings Bhd, is on 6.322 million sq ft of land leased from the Kuala Lumpur City Hall (DBKL) for 88 years.

The first phase comprises a retail shopping plaza with a million sq ft of net letable area, a 223-unit 41-storey condominium block, a central terminus for the Light Rail Rapid Transit system (LRT), long haul buses and outstation taxis, and a 150-room tourist class hotel.

The second phase comprises a 72-storey office tower with a million sq ft of letable space and a 19-storey 480-room 4-star hotel, originally scheduled for completion in 1998.

However, work on the project was stopped after the developer landed into a financial crisis.

But there may be hope yet as the developer has been given three months to come up with a plan to revive the project.

Source: The Star 1 May 2009

Menara PJD to have skybridge link to LRT

PETALING JAYA: PROPERTY developer PJ Development Holdings Bhd (PJD) has invested RM700,000 to build a sky bridge that links its 28-storey Menara PJD tower in Petaling Jaya to the light rail transit (LRT) system to woo future tenants to the building. Menara PJD offers 19 corporate suits and 56 executive suites, with open floor space ranging from 1,335 sq ft to 29,353 sq ft.  It is expected to be completed by the third quarter this year.

Source: Business Times 1 May 2009

Double-digit drops in home sales, prices in the United States

Mass. market staggered through first quarter of 2009

Adam Rosenbaum (left), a real estate agent for Century 21, showed an unidentified buyer a two-family home in Arlington in March. The home, at 40 Tanager St., went under agreement after nearly two months. (Globe Staff Photo / Pat Greenhouse)

Massachusetts real estate prices probably haven't hit bottom.

	Discuss
	COMMENTS (0)

• GRAPHIC Real ups and downs

Median residential prices and sales volume dropped by double digits over the first three months of the year, according to data released yesterday by Warren Group, a company that tracks real estate.

The median price for single-family homes fell 18.2 percent, to $253,500, in the first three months of 2009, compared with the same period last year - marking a record drop during any quarter since Warren Group started charting prices in 1987.

Sales volume also continued to decline, with single-family home sales dropping nearly 11 percent in the first three months of the year, the slowest pace for a first quarter since 1991, Warren Group said.

"I don't think we've hit bottom yet," said Timothy Warren Jr., the firm's chief executive. "We saw some increase in sales volume toward the end of last year, but there needs to be steady sales gains for three to four quarters before prices begin to level off."

Condominium sales did not fare any better. The median condominium price in the first quarter fell nearly 17 percent, to $220,100, compared with the same period in 2008, reflecting the sharpest decline for any quarter in the last two decades. Condo sales in the first quarter dropped nearly 27 percent.

Many prospective buyers are holding back, real estate agents say, because they expect to find better bargains. Jitters about job security, as well as the complications of obtaining financing, also are slowing sales, they say.

"When well-priced homes come on the market they are selling fairly quickly," said Gary Rogers, president of the Massachusetts Association of Realtors. "Unfortunately, we are seeing a shortage of those types of marketable properties."

There also fewer properties to choose from, the association reported yesterday. As of March 31, the inventory of residential properties fell 21 percent, compared with the same time last year.

Not all communities are seeing dramatic price drops. Some - including Cambridge, Brookline and Somerville - reported higher median sales prices for single-family homes in the first quarter, Warren Group said.

Mary Walsh, a real estate agent with University Real Estate in Cambridge, said buyers often don't believe her when she tells them they won't find cheaper prices in that city.

"They think I'm not trustworthy," Walsh said. "Buyers think the bottom has fallen out of the market. In some places it has. But it hasn't in Cambridge."

In many cases, sales increased in the towns that also had the biggest slide in prices. Truro, near the tip of Cape Cod, saw sales volume of single-family homes spike 33 percent in the first quarter of 2009 as median sales prices fell nearly 39 percent, Warren Group said. The Mattapan neighborhood of Boston saw sales volume jump 133 percent - from 6 to 14 homes - as single-family home prices dropped nearly 41 percent in the first three months of the year, compared with last year.

Melvin A. Vieira Jr., a sales consultant for Re/Max LandMark in Milton, said steep price drops in Mattapan, Dorchester, and Roxbury are bringing values back to a more realistic range.

"If the property is priced right, people are buying it regardless," Vieira said. "We are going more into a more normal market."

The Boston area was the first in the nation to reach its housing peak in 2005 and probably will find its bottom sooner than many other states, said David Blitzer, managing director of Standard & Poor's, the financial analysis firm.

The region's home prices have fallen less sharply than in many areas of the country. Boston's real estate prices dropped about 7.2 percent over the last 12 months, less than the national average of nearly 19 percent, according to data released this week by the Standard & Poor's/Case-Shiller Home Price Indices.

The Case-Shiller index, which records repeat sales, shows that the rate of price declines through February slowed slightly.

"That is the first step toward turning around but I don't think we'll turn around at this point," Blitzer said.

Source: www.Boston.com

LBS to launch 1,420 medium-cost terrace houses

KUALA LANGAT: LBS Bina Group Bhd aims to launch 1,420 medium-cost terrace houses with a total gross development value (GDV) of RM218mil in the Klang Valley by year’s end, said managing director Datuk Lim Hock San.

The developer also has projects lined up in Ipoh, Cameron Highlands and Batu Pahat, Johor.

LBS will be launching 1,000 units in Bandar Saujana Putra and 420 units in Taman Tasik Puchong in the next few months, according to Lim.

From left: LBS Bina Group executive director Alan Chia Lok Yuen, Datuk Lim Hock San and staff members at the launch of Iris Garden in Bandar Saujana Putra Wednesday.

“We want to build affordable homes priced below RM200,000 for the middle-income group,” he told reporters here after the launch of Iris Garden in Bandar Saujana Putra yesterday.

Lim said the group had sold about 85% of the 220 single-storey houses under the Iris Garden series since their soft launch in February.

LBS is confident of selling by next month all the units which have gross built-up areas of 968 sq ft and priced from RM149,900.

“We will then launch our Ruby Garden project that consists of 200 terrace houses with GDV of RM30mil located in the same area. We also hope to launch phase two of Iris Garden this year,” Lim said.

To date, 4,800 property units worth RM499mil have been completed and delivered to buyers in Bandar Saujana Putra.

It also plans to launch 588 single-storey semi-detached houses priced below RM200,000 in Batu Pahat, Johor with a GDV of RM90mil.

A further 680 apartments and 300 townhouses in Taman Golden Hill in Cameron Highlands, with a combined GDV of RM140mil, will be launched by the year-end.

“There is still demand for property amid the current difficult times and we believe that this is a good time for buyers to buy as mortgage interest rates are very low,” Lim said.

On why the company had been very quiet in recent years, he said: “We have been quiet for the past two years but we hope to have a higher profile again this year. With the right products and business directions, I believe this year would definitely be better for us.”

LBS currently has a total landbank of 2,500 acres in the Klang Valley, Pahang, Ipoh, Batu Pahat and Zhuhai in China.

Source: The Star 30 April 2009

Project blues at the LDP - Damansara Puchong Highway

PETALING Jaya residents and motorists feel that all new developments along the Damansara-Puchong Highway (LDP) must have a good traffic dispersal system to minimise impact on the already congested highway.

They have been concerns about the traffic impact of many new developments in the area, and the matter was frequently raised at public objection hearings conducted by the Petaling Jaya City Council (MBPJ).

Litrak communications head Bhavani Krishna Iyer said the people were not against development but the rate and size of developments along the LDP was of concern to the highway concessionaire.

Familiar scene: The cars are always in a bumper-to-bumper crawl at LDP after the Sunway toll.

“When the LDP was first built, Petaling Jaya was already a very much a developed area. What we see now is development beyond its capacity,” she said.

Currently, thousands of vehicles pass through the LDP between Bandar Sunway and Bandar Utama each day.

According to Bhavani, the project at the corner of the LDP and the Federal Highway will result in a heavy volume of traffic at the critical junction just before the cable bridge.

“The development is a very high density one and, in terms of car parks, there are more than 4,000 bays. So, that is the kind of traffic we can expect,” she said.

“There are direct access and exits to the project in the preliminary studies but it would only address traffic from the Petaling Jaya direction. There would also be cars coming from Kuala Lumpur and Sunway and it would have an impact on the Jalan Majlis interchanges because people will use it to get to the site,” Bhavani said.

Cars travelling from the project vicinity and headed towards Shah Alam would need to make a right turn under the cable bridge.

Cars heading back towards Petaling Jaya would have to use the back roads and this would eventually clog up the internal roads.

»There is a need to have a major traffic study and look at alternative dispersal points«BHAVANI KRISHNA IYER

Bhavani pointed out that the free trade zone (FTZ) generated very little traffic compared with a commercial development, yet the congestion had been bad.

“Even a medium-scale development would make things worse,” she said.

The applications for an access road onto the LDP was decided by the highway authorities after discussions with Litrak.

Bhavani said another project in Petaling Jaya, now under construction, had plans to upgrade the traffic facilities around its development site to improve the current traffic flow and the traffic from the site.

Another problematic junction along the LDP is the one leading in to and out of Taman MegahMas.

“That’s also a concern to us because traffic from any development there would be channelled to that junction of the LDP.

“It is either that or you go back to the tunnels. There is a need to have a major traffic study and look at alternative dispersal points,” Bhavani said.

The stretch near the former Kelana Seafood Centre is also quite critical.

“There is a very weak link between Kelana Jaya and the Dataran Prima and the only way is through the LDP along a small junction near the church.

“They need to find a way for traffic to get around their local roads without getting on the highway,” Bhavani said.

She said the traffic dispersal scheme from each new development must take into consideration where the traffic was going to end up at, so that the LDP would not be choked with traffic.

Source: The Star 29 April 2009