E&O remains upbeat on local market

Quayside seafront condominiums in Penang have recorded good take-up.

Published in NST Property on September 6, 2018 

THE local property market in 2018/2019 will remain challenging, but Eastern & Oriental Bhd (E&O) is still optimistic and plans to launch a few projects for long-term value creation.

Group managing director Kok Tuck Cheong said E&O would launch two residential developments in Kuala Lumpur.

The first project is called The Conlay, located on a 0.58ha site at the intersection of Jalan Conlay and Jalan Kia Peng.

This is the group’s second high-rise development joint-venture project with Japan’s developer Mitsui Fudosan Co Ltd.

E&O’s first project with Mitsui Fudosan is The Mews Serviced Residences in Kuala Lumpur which has a gross development value (GDV) of RM469 million.

E&O and Mitsui Fudosan entered into a shareholders’ agreement for The Conlay in 2015 and were supposed to launch in December the same year 298 units of serviced apartments worth RM800 million at an indicative price of above RM2,000 per sq ft.

The launch was postponed given the market conditions then. E&O decided to re-examine the product offering to ensure that it was well differentiated from others.

According to Kok, The Conlay is currently at the detailed design stage and slated for launch early next year.

“Our Conlay project is expected to comprise 491 units of serviced apartments with an estimated GDV of RM896 million,” he said.

The second residential development in Kuala Lumpur is at an elevated and exclusive 1.54ha site in Damansara Heights called The Peak, which will have an estimated GDV of RM278 million.

E&O will also launch its maiden residential project and a neighbourhood retail at Seri Tanjung Pinang Phase 2A (STP2A) development in Penang island in the second half of next year, it said in a statement on the company’s performance for the fiscal year ended March 31 2018.

Seri Tanjung Pinang 1 (STP1) and STP2 are the first and second phase of the Seri Tanjung Pinang (STP) reclamation project by E&O’s subsidiary, Tanjung Pinang Development Sdn Bhd (TPD), on the northeast coast of Penang island.

Kok said with the successful foundation and visible track record laid at STP1, the second phase is gradually taking shape across the waters, with reclamation works for STP2A progressing steadily.

He said physical reclamation works have been ongoing since May 2016, and in February 2018 TPD obtained all the land titles for STP2A from the relevant authorities.

More detailed design works for STP2A based on the parameters of the broad conceptual master plan are in progress, he said.

E&O would be enhancing its value proposition by crafting product packages that can attract existing customers within the E&O database and tapping overseas markets like Hong Kong, China and Singapore.

For the financial year ended March 31 this year, E&O reported higher revenue of RM982.71 million from RM704.76 million in fiscal year 2017 and net profit of RM112.70 million compared with RM90.92 million previously.

Its property segment recorded higher revenue with 22.47 per cent contributed by the sale of 20 per cent reclaimed land in STP2A to Retirement Fund Inc.

Property sales were led by E&O’s properties in STP, which include the Ariza Seafront Terraces launched in the first quarter of 2017 with a GDV of RM90 million.

E&O said the Andaman at Quayside seafront condominiums also did well with RM230 million worth of properties sold.