Tropicana Corp plans RM1.6 bil of launches in 2017

KUALA LUMPUR (May 30): Property developer Tropicana Corp Bhd has planned launches of about RM1.6 billion in gross development value (GDV) for the year, comprising mainly landed properties.

Group chief executive officer Datuk Yau Kok Seng said the launches primarily comprise landed properties in the Klang Valley, while about RM300 million of launches will be in the southern region.

“The launches will primarily be in Klang Valley, while about over RM300 million is in Johor. Our launches for the year is market-driven, like landed properties and terrace houses for example,” he said at a press conference today.

He added the group is also expanding its product range to include urban homes priced below RM500,000, which will be launched over the next two years at Tropicana Aman in Kota Kemuning, Tropicana Heights in Kajang, as well as in Johor Bahru.

Yau said these urban homes consist of high-rise units, with the pilot launch this year to comprise 766 units at Tropicana Aman. He added that the group has earmarked about 3,000 units to be launched progressively at Tropicana Aman.

“In Tropicana Aman, we are planning to launch 3,000 units ranging from 650 sq ft to 1,000 sq ft. This is a market segment that we expect good take up rates,” he said.

With the group’s unbilled sales of RM2.3 billion as at the end of 1QFY17, Yau expects the group to register better performance this year.

He said the group is eyeing to beat its RM1.2 billion sales recorded in FY16, as sales are expected to be marginally better.

The group recorded a stellar performance for 1QFY17, more than doubling its net profit to RM32.52 million or 2.27 sen a share, from RM15.17 million or 1.05 sen a share a year earlier, backed by strong sales and advanced progress of construction works for many of the group’s ongoing projects.

Revenue for the quarter jumped 33% to RM381.87 million in 1QFY17, from RM286.93 million in 1QFY16.

Yau said the group is working on expanding its revenue base, pointing to the group’s investments in St Joseph’s Institution International School, GEMS International School and Tenby International.

“Our investments in education will provide a good recurring income base. The education component is a key component for our integrated townships, tying up with good brands.

“We will consider building more international schools in our future townships, we are not going to stop here,” he said.

Meanwhile, Yau pointed out that the group still has 1,283 acres of landbank left, with a combined GDV exceeding RM50 billion for future developments. He said about 80% of the landbank acreage is located in the Klang Valley, while the balance is located in Johor.

He said unlocking the value of its significant landbank will take time, with the group adopting a hybrid strategy in developing these landbanks.

“We will continue to adopt a hybrid strategy. We will continue to develop, as property development is our core income. At the same time, we are also seeking strategic investors to join as partners to accelerate the unlocking of value of the landbanks,” he said.

Tropicana's share price fell 1 sen or 1.02% to 97 sen at 2.50pm today, giving it a market capitalisation of RM1.42 billion. — theedgemarkets.com

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