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Tuesday, September 17, 2013

SBC projects RM800m GDV


KUALA LUMPUR: SBC Corp is looking to bump up the gross development value (GDV) of its projects in the next 12 months from the current RM300mil to RM800mil, upon finalising a joint-venture (JV) agreement with Suria Capital Holdings Bhd.

Based on its projects within Peninsular Malaysia, the group’s GDV for the next 12 months is estimated at RM600mil, 70% of which are residential projects and 30% commercial.

Its JV project with Suria Capital alone would add another RM200mil in the same period if approvals from shareholders and the authorities come through during the next six months. Of this, SBC is quite confident. To recap, the family developer had entered into a JV with Sabah-based Suria Capital in May to develop some 16.25 acres of coastal land in Kota Kinabalu, targeted to be launched in the first half of 2014.

The project, named Jesselton Quay, would be one of SBC’s biggest projects going forward.

SBC’s upcoming projects elsewhere are Kiara East and other stand-alone sites in Kuala Lumpur, Bandar Ligamas, Ulu Yam-Genting Road and the Peak Collection in Kota Kinabalu.

It has ongoing projects in flagship locations like Kiara East, Kuala Lumpur, Bandar Ligamas, Kota Kinabalu and Kuantan.

Managing director Sia Teong Heng said the group had always been selective about its partnerships, its JV with Suria Capital being the only one signed at the moment.

“We are planning this to be South-East Asia’s new riviera with the longest waterfront city boardwalk in the region,” he told StarBiz.

Jesselton Quay would add some 600m of private marina waterfront to the existing city coastline that currently lacks pedestrian-friendly boardwalks.

Sia noted that the project, previously known as Jesselton Waterfront Project, would be a redevelopment and extension north of the old Kota Kinabalu city centre “which could morph the city into one with more regional influence.”

The mixed integrated development will have many tourist elements, including an international cruise terminal, convention centre, hotel and world class retail components. The design somewhat takes after elements in Singapore’s Marina Bay Sands.

Aside from the tourist attractions, the group also incorporated residential towers that will cater to domestic and international demand. There will also be several premium office towers, one of which will be Suria Capital’s office.

The group has considered only releasing around 1,000 serviced residential units over the eight- to 10-year development period for the entire project.

There are three phases involved, beginning from the coastline inward.

“The property prices in Kota Kinabalu have hit the RM1,000-per-sq-ft mark,” he said, indicating healthy domestic demand. “A lot of Sabahans buy properties in Kuala Lumpur, why not back in their hometown?”

SBC will also be developing another seven acres of land belonging to Suria Capital adjacent to the JV area, which will be integrated into the Jesselton Quaydevelopment.

“We’re planning the whole scheme although the JV portion is only 16.25 acres,” Sia clarified. The JV entails for SBC the construction and design of an intergrated quayside at its own expenses while Suria Capital is the owner of the land.

The net sale value of Jesselton Quay was RM1.8bil, 82% towards SBC for developing and 18% for Suria Capital as land payment.

On SBC’s valuations, Kenanga Research had in June noted that the group had deep revalued net asset value as SBC’s landbanks were acquired between the period of 2000 to 2004, hence relatively low in land cost that had not been revalued.

The research house said the Jesselton Quay JV “is likely concluded in December, so we believe significant earnings contributions will only be felt from 2015 onwards.”

On whether the developer would consider revaluing its assets to includeJesselton Quay, Sia said the group preferred to recognise projects that would be completed in the near term.

However, he acknowledged that SBC’s share price did not reflect its book value.

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