WCT to list REIT by year-end
It could have an asset size of more than RM1bil and will include the developer’s own assets
PETALING JAYA: Construction and property firm WCT Holdings Bhd expects to list its real estate investment trust (REIT) by the end of this year, according to group managing director Datuk Lee Tuck Fook.
He said the REIT could have an asset size of more than RM1bil and would include WCT’s own assets. The launch of the REIT will unlock the value of WCT’s assets and pare down debts.
“We are planning to realise the launch of our REIT by the end of this year. We are currently in consultation with our investment bankers and the authorities.
“In addition, before we launch the REIT, we also need to tidy up our assets,” said Lee, adding that the REIT could include any third-party assets following the launch.
Lee was speaking to reporters after WCT’s AGM.
WCT expects to raise up to RM400mil in net proceeds from the REIT, which will comprise Paradigm Mall in Petaling Jaya, AEON BBT Mall and the Premiere Hotel in Klang. To note, the REIT listing by WCT has been long delayed. WCT had indicated earlier that it was targeting to complete its REIT by the end of last year.
Commenting on WCT’s initiatives to deleverage, Lee said the company “is currently on track to lower its gearing level to below 0.6 times”. Its gearing level stands at approximately 0.8 times at present.
“So far, we have done our share placement in April this year. Apart from that, our war- rants will be expiring in December 2017 and will be converted into shares.
“We are also pushing the sales of our existing property inventory.
“Together with our plan to launch the REIT, we expect to bring our gearing level down,” stated Lee.
With regard to its property development division, WCT aims to achieve a sales target of approximately RM500mil in the next 12 to 18 months. As at March 31 this year, the unbilled sales from WCT’s property development business stood at RM487mil.
WCT’s engineering and construction division had performed commendably in the preceding financial year.
The company’s construction order book remains healthy at RM4.8bil and enough to last it for the next three to four years.
The engineering and construction division is the primary revenue contributor to WCT, representing 81% of the company’s total revenue in financial year 2016 (FY16).
Moving forward, Lee said WCT remains cautiously optimistic for the current financial year, amid the challenging business environment.
The Main Market-listed property developer registered a lower net profit for FY16 ended Dec 31. Its bottom line dropped by 67.3% on a year-on-year (y-o-y) basis to RM68.38mil, primarily attributed to trade receivables finance costs, fair value losses of a joint venture and lower unrealised foreign-exchange gains.
However, in the same period, the company’s top line was approximately 16% higher y-o-y at RM1.93bil, underpinned by higher contribution from its local construction segment.