It’s confident of sustaining financial outperformance through land acquisitions
Eastern & Oriental Bhd (E&O) plans to buy 135 acres of land in Sungai Buloh, Selangor from Sime Darby Bhd’s unit for a proposed commercial real estate and lifestyle residential development project.
E&O, in a filing with Bursa Malaysia, said this would be its first township development in the Klang Valley, which could potentially be a vital new growth engine for the group.
The property developer had inked a memorandum of agreement (MoA) with Sime Darby Elmina Development Sdn Bhd for the proposed purchase of the freehold land, which is part of the 843-acre plot under the larger Elmina West estate.
“It is intended that E&O (or its nominated subsidiary) will develop the said land based entirely on a ‘wellness’ theme, consisting of both commercial real estate and lifestyle residential development,” it said.
E&O said the MoA, which would lead to a sales and purchase agreement was is in line with the objectives of the collaboration dated Aug 27, 2011.
Land & General Bhd (L&G) aims to sustain its financial outperformance for another three years, through expanding its landbank and organic growth.
The group was optimistic about achieving this through land acquisitions, riding on the ambition to reposition itself from the mid-size property player category to a large one.
Managing director Low Gay Teck said: “We hope to sustain the impressive growth over the next three years and we will do this by way of land acquisitions as well as through our existing landbank and projects.”
The group is in talks with several parties for either land acquisitions or joint ventures but could not reveal any details for now.
“We do not have an expansion target but we are looking for land where there is potential to generate high grossdevelopmentvalue (GDV),” he said after the company AGM yesterday.
L&G has in total 2,800 acres of land – 42 acres in Bandar Sri Damansara, 190 acres in Negri Sembilan, 36 acres in Sungai Petani, 13 acres industrial land in Johor Baru and 2,500 acres of oil palm and rubber plantation nationwide.
L&G’s unbilled GDV and projects in the pipeline to-date are in excess of RM3bil, sufficient to keep its property division busy for the next five years.
When asked about softening property prices, Low did not see L&G facing such issues as the situation was area-specific, where the group did not operate in.
On enlarging its recurring income base, Low said the group had no immediate plans to expand its plantation operations but had been buying properties for investment purposes.
It recently acquired an office block in Putrajaya while it already has a commercial projecy 8trium in Bandar Sri Damansara and an investment in Vietnam.
Low said the group was not looking at any new overseas ventures, aside from its existing bungalow development in Hidden Valley, Australia.
For the financial year 2013, the group achieved a net profit of RM44mil, 45% higher than RM30.4mil a year earlier.
Its revenue was RM216.3mil, 65.4% higher than the RM130.8mil achieved a year ago.
The total assets grew by more than 15% from RM476mil to RM549.7mil in this period. Net assets rose by 15.8% from RM282.5mil to RM327mil.
The group was targeting to launching two of its upcoming projects in the third quarter of 2014 (3Q14).
The two projects are the Phase 2 of its Damansara Foresta condominium in Bandar Sri Damansara and the Tuanku Jaafar Golf & Country Resort project in Negeri Sembilan.
The Foresta Phase 2, consisting two condominium towers of 452 units, has a target gross development value of RM500mil. “The units are between 1,200 sq ft (sf) to 2,000 sf and while we have not finalised the selling price as it will be launched a year from now, we’re estimating a range from RM700 per sf.”
On its Negri Sembilan golf resort, he said there were still some development issues to be ironed out with the local authorities.
He noted that the local council had requested for some low-cost components to be included in the project but the group was undergoing some processes and discussion to waive it.