YNH plans to launch RM3.7b worth of properties

KUALA LUMPUR: YNH Property Bhd has lined up some RM3.7 billion worth of upmarket real estate launches in the coming financial year and plans to increase property sales by 20% a year over the next three fiscal years.

Daniel Chan, head of corporate services, said YNH's growth will also be supported by its estimated RM700 million worth of unbilled property sales which can sustain its earnings for two years.

"It [20% increase] should not be a problem," Chan told The Edge Financial Daily in a telephone interview. He declined to reveal the value of property sales YNH hoped to achieve in the current year ending December, only indicating that "FY10 property sales are good".

Chan said the developer has no immediate plans to acquire more land as its undeveloped landbank, measuring some 720ha, is sufficient to sustain earnings for the next 30 years.

YNH's upcoming launches are located on prime tracts in Kuala Lumpur. These include Menara YNH, with an estimated gross development value (GDV) of RM2 billion on a 1.2ha freehold site in Jalan Sultan Ismail, and Fraser Place serviced apartments, with GDV of nearly RM700 million, near Jalan Ampang.

In Mont'Kiara, YNH is developing the RM1 billion Kiara I63 mixed development, located beside Plaza Mont'Kiara. Chan said construction on Fraser Place had begun, and work on the other two projects is scheduled to start within six months.

The troubled development of Menara YNH will be closely watched. Chan said YNH could undertake the 45-storey commercial tower job on its own, or engage a strategic local or foreign partner to jointly develop the property, scheduled to be unveiled mid-next year.

"We are waiting for the right time to launch in order to achieve the full potential of the project," he said.

YNH made the news in January 2008, when it announced that Kuwait Finance House (Malaysia) Bhd (KFH) was purchasing a 50% interest in Menara YNH for RM920 million.

The sale, involving an area of 750,000 sq ft, worked out to some RM1,230 per sq ft. The price was about 10% higher than the RM1,120 per sq ft KFH and local property investor Prestige Scale Sdn Bhd paid for the 36-storey Glomac Tower in the Kuala Lumpur City Centre.

The remaining half of Menara YNH was to be sold to foreign buyers. YNH stood to rake in some RM1.84 billion from the disposal of the entire building.

The sale to KFH, however, failed to materialise. Last December KFH informed YNH that it would not proceed with the formalisation of the sale and purchase agreement based on the terms and conditions of the offer letter in January 2008.

YNH had originally planned to jointly develop the tower with Singapore real estate heavyweight CapitaLand Ltd. The two parties had signed a memorandum of understanding in December 2006 to jointly build the tower on a 60:40 basis.

But in June 2007, the YNH-CapitaLand collaboration was terminated, as certain conditions under the MoU were not met.

Construction of the building, initially valued at around RM800 million, was originally slated to begin in mid-2007 and complete by end-2011.  

ECM Libra Investment Bank Bhd, in a research note dated May 5, 2010, indicated that YNH was talking to a potential foreign investor, which would acquire the tower and own up to 30% equity interest in the development.