KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has set a cumulative net profit target of RM450 million to RM500 million for 2014 financial year ending March (FY14) till FY16 with the rollout of projects in Penang, the Klang Valley, Iskandar Malaysia and London.
Deputy managing director Eric Chan said E&O plans to launch projects with an average gross development value (GDV) of RM1.5 billion annually compared with the current annual average GDV of RM1 billion.
Post-2017, E&O, which is 32% owned by Sime Darby, eyes projects with a GDV of RM3 billion annually, he added.
Chan said its targets are achievable on the back of four “growth engines” namely Penang, Iskandar, the Klang Valley and London.
Its projects include Seri Tanjung Pinang Phase 1 (STP1) in Penang, the Mews Service Residences in Kuala Lumpur, Medini Iskandar projects and Princes House Apartments project in London.
Chan said the reclamation work for its Seri Tanjung Pinang Phase 2 (STP 2) would most likely commence in June next year.
He said it will take four years to reclaim 507 acres (205.2ha) for the project and another 14 years to complete the entire STP2 project, which carries an estimated GDV of RM17 billion.
Chan said the detailed environmental impact assessment (DEIA) report for STP2 will be submitted to the department of environment in the fourth quarter of this year (4Q13).
It is worth noting that E&O recently inked a memorandum of agreement to acquire 54ha in Elmina West from Sime Darby Elmina Development Sdn Bhd, a wholly owned subsidiary of Sime Darby Property Bhd.
|Chan: E&O is targeting
projects with a GDV of RM1.5 billion annually.
E&O said it intends to develop the land based entirely on a “wellness” theme, consisting of both commercial real estate and lifestyle residential development.
E&O has also teamed up with Khazanah Nasional Bhd and Temasek Holdings to roll out 208 terrace houses in Iskandar by 4Q13.
E&O also has partnerships with foreign firms such as Mitsui Fudosan Co Ltd, with which it has teamed up to develop The Mews Service Residences in Kuala Lumpur.
“As of now, we already have a 70% take-up rate. Mitsui Fudosan has given us the market access to Japanese,” said Chan.
On its international front, Chan said the company is planning to launch 56 units of Princes House Apartments in London by November this year.
The firm made its debut in London by purchasing the Princes Apartments last April for RM100.91 million. They will be worth an estimated RM250 million after being refurbished.
E&O’s strategy in partnering reputable developers are showing results.
For instance, Chan noted, over the last two years E&O’s shares had risen to RM1.58 from RM1.16, marking a 36% total appreciation.
“Our market capitalisation has grown from RM977 million to RM1.8 billion,” he said.
This article first appeared in The Edge Financial Daily, on September 27, 2013.
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