Sentoria Group to remain focus on its property development business

By Sharen Kaur - June 30, 2021 

Image taken from sentoria.com.my/bukit-rangin-perdana-2

sharen@nst.com.my

Sentoria Group Bhd said its property development division will continue to be the group's main focus, while its leisure and hospitality division will remain challenging in the near term with the ongoing Covid-19 pandemic.

  The property development division is currently backed with a total outstanding order book and unbilled sales of about RM297 million as at March 31, 2021, from its ongoing projects in Pahang, Morib, and Sarawak.

  According to its website, the group's ongoing projects include Bukit Rangin Perdana 2 in Kuantan, Pahang, Sentoria Morib Resort City, and Borneo Samariang Resort City in Kuching, Sarawak.

  "These ongoing projects together with the planned launches are anticipated to continue to contribute positively to the group in the foreseeable future, it said in a filing with Bursa Malaysia today.

  On the group's leisure and hospitality division, Sentoria said it had been greatly affected by the Movement Control Order (MCO) imposed by the government to curb the spread of Covid-19 and envisage that the business would require more time before the operation normalises.

  The division operates Bukit Gambang Resort City in Gambang, Pahang, a family-oriented resort with multiple attractions such as Bukit Gambang Water Park and Bukit Gambang Safari Park, as well as accommodation. It also operates Sempurna Resort in Kuantan, Pahang.

  Sentoria said in order to mitigate the impact of the pandemic disruption to its operation, it is undertaking a review to streamline its financial obligation in response to the adverse operating environment to better position the group moving forward.

  The group said it will focus on liquidity and capital adequacy during this challenging time.

  "We are currently in discussion with our bankers, creditors, and various stakeholders to restructure and reschedule the group's financial obligations to restore itself to a stronger financial footing," it said.

  The group said in the filing that it is determined to overcome its present performance setback with the mutual cooperation and kind understanding of its various bankers and stakeholders.

  Meanwhile, Sentoria said some businesses of the group have resumed operations under the property development segment.

  The group said it will also continue to focus on residential products priced below RM300,000 and at the same time, collaborate with strategic partners to enhance and expand its design and build projects.  

  The development of affordable homes is in line with the government's thrust to encourage ownership of affordable houses by the B40 and M40  households, it said.

Genting Resorts World Las Vegas opens on June 24, 2021

Genting Bhd's US$4.3 billion (RM17.9 billion) Resorts World Las Vegas in the Nevada gaming hub, in the United States, is now open. A VIP party was held for invited guests on the night of June 24, 2021, followed by a fireworks show and the public opening at 11:00 p.m.

The opening of the mega hotel is a major turning point for Las Vegas Boulevard battered by the last recession coupled with the Covid-19 pandemic and it has yet to fully recover. Las Vegas casinos closed for most parts of the pandemic and gradually reopened in June 2020 following S.O.Ps and other strict protocols. Tourism has been picking but rather slowly and operators have started to reopen, albeit cautiously. 

Photo by Harishma Sidhu, U.S.A

The establishment's casino has been touted as the city's "most technologically advanced casino", with mobile payments throughout the resorts, including at the betting tables.

Resorts World Las Vegas offers 3,506 hotel rooms and it is also home to a 5,000-seat theater where popular celebrities like Celine Dion, Luke Bryan, Carrie Underwood, and Katy Perry are scheduled to perform in the coming months. The theater was designed by Scéno Plus, and it will contain one of the largest and tallest stages on the Las Vegas Strip. The stage measures 196 feet wide, and the theater includes 265 speakers. It was reported that Dion is scheduled to open the theater on November 5, 2021.

The casino floor includes 117,000 square feet of slots with about 1,400 slot machines, table games, a dedicated Poker room, high-limit areas, and a sportsbook. Card players will bet with house chips implanted with sensors at tables that make cashless transactions and track every bet, split, double-down and side wager.

The development will integrate three of Hilton’s premium brands into its resort campus in partnership with Hilton Hotels & Resorts. The brands include Las Vegas Hilton, the resort’s full-service brand; Conrad Las Vegas, Hilton’s lifestyle luxury brand; and LXR, Hilton’s network of independent luxury properties, which will operate as Crockfords Las Vegas, Genting’s internationally renowned ultra-luxury brand.

The hotel setup allows the resort to cater to different types of guests, with Crockfords offering the highest level of luxury. Each hotel has its own lobby. The hotels feature keyless room entry, by using Bluetooth through a guest's smartphone. This ensures both safety and convenience for the hotel guests.

There will be over 40 food and beverage options within the resort, ranging from fine dining to quick-service venues and exclusive concepts.

The resort complex includes The District, a 70,000 sq ft two-floor retail centre. It has various retailers, including two Fred Segal stores, and Kardashian Kloset, selling clothing formerly owned by the Kardashian family. The District also comprises several of the resort's restaurants, and The Globe, an LED video globe measuring 50 feet in diameter. The Globe stands 40 feet high and features 8,640 triangular LED panels which project interactive images.

An aerial shot of Las Vegas Strip. Image courtesy of Dr. PD, U.S.A

Developed by Malaysia's Genting Group, Resorts World Las Vegas is one of the biggest resorts ever built on the Las Vegas Strip, which is home to the Bellagio, Caesars Palace, and other famed casinos visited by people from around the globe.

A distance shot of  Resorts World Las Vegas. Image courtesy of Kiran Sidhu, U.S.A.

The mega-resort sits on a 35.2-hectare site on the north strip in Las Vegas. 

Night View of Las Vegas Strip. Image courtesy of Dr. PD, U.S.A

Genting acquired the site on which the legendary Stardust Casino once stood for US$350 million (RM1.44 billion) in 2013. The Stardust was demolished in 2007 by Boyd Gaming Corp to be replaced with the US$4.8 billion Echelon Place project.  A groundbreaking ceremony for Echelon Place occurred on June 19, 2007, however, the project was abandoned a year later when the recession kicked in.   

The Genting resorts include the US$3 million Crystal Bar and Wally's, a 13,000 sq ft wine bar and restaurant. It also includes the 4,090 sq ft Gatsby's Cocktail Lounge that provides wraparound views of the casino floor. The hotel tower includes a lounge known as Starlight, a reference to the Stardust.

International luxury home buyers prefer traditional real estate firms

By NST Property - June 23, 2021 

International luxury home buyers are planning to work with a traditional real estate company such as a broker or an agent to buy their next property especially with the rise of online competition in recent years. This is based on a new study of over 3,000 of the world's most affluent households by Luxury Portfolio International® (LPI), the luxury arm of Leading Real Estate Companies of the World®.

Traditional companies are the dominant choice globally, but considering the newness of disruptors (online agencies) in the market, consumer adoption levels are high at about one-in-five, said LPI president Mickey Alam Khan.

Khan said the study shows buyers prefer to work with a traditional real estate company when making a luxury home purchase.

He said traditional firms remain in the driver's seat, with the bulk of consumers opting for familiar and trustworthy sources when buying high-end real estate.

"Disruptors are relatively new and are still establishing themselves as a credible option to most luxury purchasers today. To maintain this lead, traditional brokerage firms must maintain personal connections with networking and affinity marketing, as well as being a trusted source, all while keeping current with technology," he said in a statement.

The study shows a summary of levels of loyalty to the traditional agent from the total surveyed.

Global affluents are 68 per cent more likely to use a traditional agent, with only 17 per cent saying they would opt for a disruptor.

Luxury buyers or those looking to buy a property worth over US$1 million are 70 per cent more likely to use a traditional agent, with only 19 per cent saying they would opt for a Disruptor

Those living in Asia Pacific are 74 per cent more likely to use a traditional agent, with only 18 per cent saying they would opt for a Disruptor

Those living in North America are 65 per cent more likely to use a traditional agent, with only 21 per cent saying they would opt for a Disruptor

Those living in Europe are 63 per cent more likely to use a traditional agent, with only 18 per cent saying they would opt for a Disruptor

The top 10 list of what is most valued in the traditional estate agent model comprise:

Highest quality offering

Customer service: speed of response, personal touch

Reputation: recognised leaders in the industry

Adapting to new technology

Employee embody similar values to my own

Corporate citizenship: social responsibility and sustainability central to the brand

Loyal to the brand or employee who works for the brand

Loyalty programme: earn rewards for continued business

Lowest cost

Provenance: story of the brand's founding

Incremental improvements for Scientex with upcoming launches

Published in NST Property

Scientex Bhd, which has businesses in packaging and property development will launch affordable housing projects in Kedah and Melaka in its next financial year ending July 31, 2022 (FY 2022).

The company acquired about 65 hectares (ha) of development lands in Sungai Petani, Kedah, and around 64ha of prime lands in the vicinity of Jasin town, Melaka in the current fiscal year 2021.

Scientex said following the completion of the land acquisitions, it expects to launch its developments in these lands in FY 2022 to meet the robust demand for affordable housing in these localities.

It said in a filing with Bursa Malaysia yesterday that with Bank Negara Malaysia maintaining its Overnight Policy Rate at 1.75 per cent, it is expected to provide enabling conditions for a sustainable economic recovery for the domestic economy.

"The company remains focused on the affordable housing segment by leveraging on cost controls and efficient land use to maximise returns whilst ensuring cost-competitive products continue to go on-stream," it said.

Scientex said it will also continue to seize opportunities to acquire more competitively priced landbanks at suitable locations within Peninsular Malaysia to expand its affordable housing brand name.

The company said to date it has committed to purchase additional development lands in Pulai and Tebrau, Johor, and in Seberang Perai Utara, Penang.

On September 21, 2020, Scientex announced that its wholly-owned unit Scientex Quatari Sdn Bhd (SQSB) entered into a Sale and Purchase Agreement (SPA) with Lee Pineapple Company (Pte) Ltd for the proposed acquisition of eight parcels of freehold land in Pulai, measuring a total of about 80ha for RM185 million.

Then on May 7, 2021, SQSB entered into a conditional SPA with Pelangi Sdn Bhd for the proposed acquisition of eight pieces of freehold land in Tebrau, measuring around 480ha for RM518.1 million.

Scientex had said that the proposed acquisition will be completed in stages up to the first half of the year 2024.

In Penang, the company announced on April 5, 2021, that SQSB and another wholly-owned unit Scientex (Skudai) Sdn Bhd entered into SPAs with two separate parties to acquire agriculture land in Seberang Perai Utara for a total of RM246.7 million.

The proposed acquisition is expected to be completed in the first half of the year 2022, it said in the filing.

Scientex said the rationale for the proposed acquisition is so the company could build more affordable homes with the objective of completing 50,000 affordable homes throughout the country by 2028.

It also said the lands are expected to provide a steady and sustainable property development model as the company continues to focus on landed affordably priced properties which demand has remained firm and resilient.

Scientex to have better earnings?

Scientex said since the announcement of the Full Movement Control Order (FMCO) effective June 1, 2021, certain development sites of the company were gradually granted approvals from the relevant authorities to continue operations in strict compliance with the standard operating procedure (SOP) in place.

"Notwithstanding the approvals, Scientex foresees that there could be potential delays in obtaining permits and approvals from the relevant authorities as well as delays in constructional activities, hence impacting our progress billings for the coming quarter," it noted.

Scientex Bhd's net profit for the third quarter ended April 30, 2021 (Q3) increased to RM109.88 million from RM69.63 million recorded in the same quarter a year ago.

Revenue rose to RM976.80 million from RM772.23 million previously, the company said in the Bursa Malaysia filing.

Scientex said the higher results were driven by better performance in the packaging and property divisions during the quarter compared to the same period previously.

"While the global economy continues to recover, particularly in the major economies, recovery in some economies may be affected by the resurgence in the Covid-19 pandemic, especially the variant strains.

"As such, uncertainty with regard to the successful curbing of the pandemic and the potential risks of heightened financial market volatility may continue to afflict the global economy. On the other hand, the current vaccination drive undertaken by world economies is expected to boost sentiments as market confidence gradually returns," it said.

For the nine-month of FY 2021, Scientex recorded revenue of RM2.69 billion compared to the preceding year's corresponding period of RM2.56 billion.

Property revenue stood at RM811.5 million for the current financial period, an increase of 28 per cent compared to the preceding year's corresponding period of RM634.3 million.

In line with the increase in revenue, operating profit increased from RM185.8 million to RM228.4 million for the same period.

Scientex said the increase in revenue and operating profit were mainly contributed by steady construction progress and strong take-up rates for new launches in Scientex Tasek Gelugor, Penang; Scientex Kundang Jaya, Selangor; Scientex Durian Tunggal, Melaka; and Taman Pulai Mutiara, Johor.

Strong sales momentum for EcoWorld Malaysia since mid-2020, says its chief

Published in NST Property, June 24, 2021 

Eco World Development Group Bhd’s ongoing township developments in the Klang Valley, Iskandar Malaysia, Johor and Penang performed well with strong take-ups on all the new launches. Image of Eco Grandeur taken from ecoworld.my/ecograndeur/

Eco World Development Group Bhd's (EcoWorld Malaysia) ongoing township developments in the Klang Valley, Iskandar Malaysia, Johor and Penang performed well despite the ongoing Covid-19 pandemic.

"The continued strong sales momentum we have been experiencing since the middle of last year is very heartening indeed. We are particularly encouraged by the fact that recovery has been broad-based with our projects in every single region performing well," said the group's president and chief executive officer (CEO) Datuk Chang Khim Wah. 

Chang attributed the strong rebound experienced by the group to strong take-ups on all the new projects and products launched in the second quarter of 2021 (2Q 2021), namely Eco Botanic 2 in Iskandar Malaysia, Co-Home at Eco Horizon and Eco Grandeur, and the second phase of ErgoHomes and Garden Homes at Eco Forest.  "Homeowners are increasingly drawn to the many unique selling points of EcoWorld's Signature DNA and the comprehensive lifestyle amenities available within a 10 km radius of each project," he said in a statement.

Chang said the group's industrial business park also did well in spite of the current challenging times.

As at May 31, 2021, total sales achieved by the group's four Eco Business Park projects totalled RM227 million, higher than the RM220 million achieved for the full financial year 2020 (FY 2020).

"This encouraging result, currently driven mostly by local business owners and industrialists, suggests that there are sectors of the Malaysian economy that are continuing to grow even amidst the challenges posed by Covid-19," he said.

Chang is upbeat that once the Full Movement Control Order (FMCO) is lifted and travelling restrictions are relaxed, both consumer and business confidence will recover strongly and this would result in continuous positive sales momentum.

EcoWorld Malaysia had secured 88 per cent of its full-year sales target of RM2.875 billion within the first seven months of the current financial year, despite the ongoing FMCO imposed by the government to combat the Covid-19 pandemic.

As at May 31, 2021, (seven months into the current financial year), total year-to-date sales has reached RM2.53 billion, which is 10 per cent higher than the RM2.3 billion sales achieved in FY2020.

The group recorded RM1.32 billion sales in 2Q 2021, which is almost double the sales of RM706 million achieved in 1Q 2021.  

Future revenue from Malaysian projects alone increased substantially from RM2.99 billion as at February 28, 2021, to RM3.77 billion as at May 31, 2021.

Including EcoWorld Malaysia's share of future revenue from Eco World International Bhd (EcoWorld International), total future revenue from projects undertaken in Malaysia and overseas stands at RM4.21 billion as at May 31, 2021.

Chang said the future revenue position of RM4.21 billion provides the group with both near-term cash flow and earnings visibility.

Meanwhile, for EcoWorld International, there has been a recovery in local demand across the UK and Australia property markets in the second quarter of FY2021 (2Q FY21), said its president and CEO Datuk Teow Leong Seng.

Sales of EcoWorld London, the group's joint-venture that focuses on the outer zones of London, has seen a substantial increase in sales, increasing from £9 million to £24 million in 2Q FY21 compared to the same quarter in FY2020.

Teoh said in Australia, the group's West Village project saw a marked increase in sales, jumping from A$1 million to A$15 million over the same period.  

"Apart from an increase in contracts exchanged with SPAs (Sales & Purchase Agreement) signed, the reservation pipeline has also been growing, a sign of markedly improved sentiment. This enabled our total sales and reservations up to May 31, 2021, to exceed the RM1 billion mark," he said in the statement.

Teoh said overall the group saw better sales thanks to the positive turn of events to the reopening of economic sectors following mass vaccinations in the UK and the effective containment of the pandemic in Australia which boosted confidence among consumers and homebuyers.

He added that the improved sales performance is also a clear indicator that the property markets are beginning to recover following the slump induced by Covid-19.

If it wasn't for the international borders remaining closed, EcoWorld International would have performed better.

Teoh said the closure of international borders for the vast majority of global populations affected sales of projects that traditionally receive strong demand from overseas buyers.

Accordingly, the sales performance of the group's projects in inner London, developed through the EcoWorld-Ballymore joint-venture, was relatively muted due to the postponement of international marketing events.

"Looking ahead, we believe that sales performance will improve in the coming quarters as the rollout of the vaccination programmes continues in many of our global customer markets. Further, the return of office workers should also lift demand for our projects that are located close to major employment centres. This includes London City Island and Wardian London, which are near Canary Wharf. Similarly, Yarra One, which is just 5km away from Melbourne CBD should also experience an uplift in demand as economic activities resume with greater strength," he said.

Teoh said looking ahead with the improving Covid-19 situations, the group should be on track to achieve its FY2021 sales target of RM2.2 billion by the end of the financial year