Tambun Indah to launch RM1b worth of properties

KUALA LUMPUR (Oct 8): Little-known Penang-based property developer Tambun Indah Land Bhd plans to launch nearly RM1 billion worth of real estate in the next 15 months or so.

According to managing director Teh Kiak Seng, the developer will launch RM597.6 million worth of properties in the second half of FY12 ending Dec 31. Next year, it plans to unveil RM357.9 million worth of real estate.

Assuming Tambun Indah sells all the properties it launches, new property sales in 2HFY12 and FY13 will surpass the total sales of RM347.3 million achieved in FY11, when the developer sold 912 properties.

The company has unbilled sales of RM261.74 million as at June 30, which is expected to sustain earnings growth for the next three years.

Teh said the company had a pipeline of projects, with an estimated gross development value of more than RM3.7 billion, that will last until 2020. But at the moment, its focus is on launching the projects according to its master schedule and delivering them on time, he told The Edge Financial Daily via email.

“Tambun Indah is also looking to expand its revenue base to include recurring income,” he added.

The developer’s Pearl City Business Park inevitably comes into the spotlight when it comes to growing Tambun Indah’s recurring income base. According to Teh, the project is significant as it marks the company’s commitment to grow its rental income base from the leasing of its commercial properties.

The business park comprises components such as food and beverage outlets, a hypermarket, medical centre and an international school, he said. “For this, we are operating on a build-to-lease basis, hence establishing a new income stream for the group,” Teh said.

Meanwhile, the developer is eyeing potential land acquisitions in the Klang Valley to diversify its income base in another real estate hotspot. The challenge, however, is the expensive tracts there, so landing a good deal is not an easy task, he said.

“We will make the necessary announcements on further updates. For now, the group is aggressively developing its properties in Penang,” Teh said.

Teh: The group is aggressively develo- ping its properties in Penang.

News reports, quoting Teh, indicated that the developer had been eyeing land in Kajang and Rawang, Selangor to kick-start its maiden venture in the Klang Valley.

It was also reported that Tambun Indah was already in talks with landowners for potential joint ventures, a move that is considered commercially viable as the developer would not need to come out with a huge sum of money for land acquisitions.

Tambun Indah had net cash of RM28.52 million as at June 30, based on the company’s cash pile of RM100.74 million and debt obligations of RM72.22 million. Its latest reported net assets per share stood at 67 sen.

For the six months ended June 30, the developer posted a higher net profit of RM18.6 million compared with RM11.1 million in the previous corresponding period. Revenue came in sharply higher at RM144.8 million from RM88.3 million previously.

However, there was a drop in the developer’s earnings last year. Its net profit declined to RM23.3 million in FY11 from RM25.2 million the year before. However, revenue was up 50% to RM191.8 million from RM128 million in FY10.

Teh said its launches in 2HFY12 comprise five projects, involving mainly residential units in Seberang Perai, Penang. These projects include the RM51.1 million BM Residence, the RM32.6 million Carissa Villa and the RM236.1 million Straits Garden.

Tambun Indah also plans to launch two property projects with a total GDV of RM277.8 million under its Pearl City brand during the period.

Next year, the developer’s RM357.9 million worth of launches involving five projects in Seberang Perai are expected to take place during the second half of the year. These projects are the RM55.8 million Taman Bukit Residence, the RM18.6 million Villa Permai and a RM37.5 million joint-venture project undertaken by the company’s wholly-owned unit Perquest Sdn Bhd.

This article first appeared in The Edge Financial Daily, on Oct 8, 2012.