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Tuesday, November 6, 2007

Dijaya plans RM600m property launches

DIJAYA Corp Bhd will launch at least RM600 million worth of properties in fiscal 2008, amid plans to expand geographically and reorganise its product range to sustain earnings.

The year to December 2008 will see the unveiling of, among others, the estimated RM205 million Tropicana Avenue shop offices, and RM390 million Tropicana Grande luxury condominiums.

Both projects sit within Dijaya's existing 253-hectare upmarket Tropicana Golf & Country Resort township near the Bandar Utama enclave in Petaling Jaya.

Dijaya's upcoming property projects in Malaysia coincide with its initial real estate launches in India, the developer's first foreign venture.

It has tied up with a landowner in India to build an approximately RM800 million mixed-development project in Hyderabad.

"It is at least RM600 million locally and abroad," Dijaya managing director Tong Kien Onn told Business Times in Petaling Jaya yesterday.

Tong said Dijaya intends to venture into Johor and Penang, the other two property hotspots in Malaysia besides the Klang Valley.

Plans are also afoot for an entry into fast-growing Vietnam.

In Johor, Dijaya plans to build commercial units and high-rise homes while in Penang, it hopes to develop landed houses.

Tong declined to elaborate on Vietnam, only indicating that a deal could be struck within the next four months.

To sustain earnings, commercial properties will take greater prominence in Dijaya's real estate portfolio to enable the company to increase income from rental.

Initial rental boost is expected to come from the lease of company-owned retail and office space within its upcoming Tropicana Mall in Petaling Jaya.

"Our current rental income is minimal," Tong said.

Dijaya prefers to sell its foreign offerings, but may retain strategically-located ones for lease.

Recurrent rentals offer a buffer against a cyclical real estate sector while outright property sales may fluctuate according to economic conditions.

In Malaysia, the developer still has some 243ha of untouched land across the Klang Valley, Behrang and Bukit Mertajam.

These sites can last the company up to the next seven years. Its unbilled property sales stand at about RM250 million.

Dijaya's first half to June 2007 net profit rose 19 per cent to RM15.4 million, or 5.9 sen a share, while revenue climbed 29 per cent to RM114 million.

Shares of Dijaya dipped two per cent or three sen to end at RM1.37 yesterday, valuing the firm at RM355.6 million.

The stock has advanced 71 per cent this year, surpassing the benchmark index's 26 per cent rise.

By New Straits Times (By Chong Jin Hun)

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