The Sun Daily, Tuesday, 1 October 2013
Chong
PETALING JAYA (Oct 1, 2013): Protasco Bhd,
which is looking to grow its property division, has set aside up to RM50
million this year to buy land outside the Klang Valley, with plans to
emulate its flagship mixed development De Centreum City in Kajang,
Selangor.
"We are aggressively looking for good valuable land outside Kuala
Lumpur, namely in Johor and the northern region," Protasco executive
chairman and group managing director Chong Ket Pen (pix) told SunBiz in an interview.
The group is looking for sizable land measuring between 4ha and 8ha.
"For land acquisition alone, we have allocated between RM40 million and RM50 million for this year," said Chong.
The group plans to use internal funds and bank borrowings to buy large tracks of land for its future development.
"Our gearing is very low at 0.2 times. Therefore, we have the margin
to move up our gearing," he said, adding that the group is comfortable
with a gearing level of up to 0.25 times.
Protasco is in a net cash position of RM105 million. Cash and its
equivalents stood at RM161.9 as at March 31, 2013, while total
borrowings amounted to RM42.3 million.
A month ago, Chong said Protasco was close to securing a 8ha land worth RM50 million in Johor.
"It's a highly valuable piece of land and we hope to conclude the
deal by this year. It is in Johor Baru, but not in Iskandar Malaysia
which I find is quite saturated," he said.
Early this month, Protasco teamed up with Asdion Bhd, a software
development and information communications technology company, to
undertake property development on several pockets of land in Johor Baru.
Under the deal, Asdion will sell a 64% equity stake in its subsidiary
Sun Rock Development Sdn Bhd to Protasco's unit Protasco Development
Sdn Bhd for RM64, while Asdion will retain the remaining 36% stake.
Sun Rock Development is finalising the purchase of five parcels of
leasehold land totalling 5.8ha in Plentong, Johor Baru from Johor Corp
for RM29.6 million.
"We plan to tie back our future property developments to the same
kind of products that we are developing at De Centreum. We want the De
Centreum City branding ," he said.
Protasco's De Centrum City project is a 40.5ha tract in Kajang, with a
gross development value (GDV) of RM6 billion. The group is positioning
the development as an up-market product despite its location on the
outskirts of Kuala Lumpur.
"We have a 15-year master plan to develop the whole area into a
city," he said. The site also houses the Infrastructure University Kuala
Lumpur (IUKL), which is owned and managed by Protasco.
The first phase, with a GDV of RM250 million, was launched last
January, and had already secured sales up to 80% and anticipated it to
be sold out before year end.
Phase 1 features a 20-storey, low-density serviced apartment tower, a
three-storey retail mall and shops, an eight-storey above ground
carpark and a 12-floor small office, home office tower.
Chong said second phase of the project will double the GDV to RM500 million and will be launched in the middle of 2014.
Phase 2 features two blocks of offices, two blocks of apartments, a
four-star hotel and a convention centre that can accommodate 1,500
people.
He revealed that the company has secured a "ready owner" for the hotel.
Property development is still a small part of Prostaco's business,
but the group wants this segment to contribute about a quarter of its
operating profit by the next three years, said Chong.
For now, the road construction and maintenance business remains the
largest contributor, contributing RM99.5 million or 96% to Protasco's
operating profit last year.
Chong said the construction segment has managed to bring in RM110 million of new jobs so far this year.
Protasco's target is to increase profit and revenue by 15% per year,
boosted by its construction and maintenance segments, as well the
property business.
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