Details of Ho Hup’s Bukit Jalil development to be out soon

KUALA LUMPUR: Details of the 50-acre (20.23ha) development in Bukit Jalil, dubbed “Pavilion 2”, to be co-developed by Ho Hup Construction Co Bhd and Malton Bhd will be out by the third quarter of this year, according to Ho Hup’s management.

“The driver for our growth will be this joint venture (JV) project with Malton,” said Ho Hup’s chief executive officer (CEO) Derek Wong, adding that Malton would be making an announcement on the development over the next few months.

The Bukit Jalil development that comprises a huge shopping mall and several blocks of apartments is estimated to have a total gross development value (GDV) of RM4.2 billion. Under a JV arrangement, Malton will take the lead and fund the cost of development, whereas Ho Hup will provide the said piece of land in return for an 18% share of the GDV.

While the 50-acre piece is for the JV with Malton, Ho Hup has actually started developing an adjacent 10-acre on its own, with a GDV of RM1.2 billion.

Ho Hup was uplifted from being a PN17 firm in May this year, after it completed its financial regularisation exercise.

Wong, speaking after the firm’s annual general meeting (AGM) yesterday, said that the construction and property firm is doing much better now and that it is on target to achieve double-digit growth.

The group posted a net profit of RM22.5 million for the financial year ended Dec 31, 2013, on revenue of RM149.4 million. A bulk of the earnings was from the development of the 10-acre tract in Bukit Jalil, while the remaining was from its construction projects, both locally and overseas.

“We have started building the basement on our 10-acre tract in Bukit Jalil. Our shops have been 100% taken up and our small offices versatile offices (SoVos) are about 70% taken up. To date, we have achieved total sales of close to RM400 million from the development,” said Wong.

On its construction segment, the CEO said the group’s order book stood at RM400 million with projects tendered worth RM2 billion. “We will be happy with 20% of success rate from the projects tendered,” he added.

While its Bukit Jalil development is gathering momentum, Ho Hup is looking to replenish its land bank mainly in the Klang Valley, the outer area of Klang Valley and Johor, said Wong, who also pointed out that the firm would be looking at areas such as Semenyih and Rawang.

The group has also recently ventured into property and construction projects in Myanmar.

Its subsidiary, Ho Hup Construction Company (Labuan) Ltd has inked a JV agreement with Myanmar’s construction firm Zaykabar E&C Co Ltd on June 5 to incorporate a new firm called Ho Hup (Myanmar) E&C Co Ltd.

Wong said, “We should be doing our maiden launch for a residential project in Myanmar this October. The GDV of the project is estimated at about US$150 million (RM485.06 million) on a 50-acre tract of land.”

This article first appeared in The Edge Financial Daily, on June 19, 2014.

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