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Monday, January 28, 2008

AP Land to launch China project soon

Changshu development will have GDV of RM420mil

ASIA Pacific Land Bhd (AP Land), which is diversifying its revenue sources by acquiring oil palm plantation land and a college, will be launching a development in Changshu, 100km northwest of Shanghai, by the middle of the year.

This is in addition to the launches of MyHabitat Tower 2 in Kuala Lumpur comprising 150 units of serviced apartments with a gross development value (GDV) of RM120mil and 80 high-end villas in Bandar Tasik Puteri near Rawang with RM40mil GDV, this year.

The Changshu development would comprise serviced apartments and 3-storey shop houses with a GDV of RM420mil that would take three years to complete. It is on a 16.16-acre plot the company acquired late last year from China's National Land Resources Bureau for RM46mil.

AP Land joint managing director Low Su Ming said if everything went according to plan, the development would be launched by the middle of the year. Details are still on the drawing board.

Low Su Ming

“We like this city because unlike the larger cities on the coast, it is still liveable and it has a number of large multinationals from Taiwan and Japan that have part of their operations here,” she told StarBiz.

Low said judging by the number of multinationals that have located their operations in Changshu, demand for housing and commercial space would be even higher by the time the development was completed in three years.

She said it was AP Land's strategy to diversify its revenue stream from property development by venturing abroad.

“Changshu is the first step. The confidence level has to be established first,” Low said, adding that venturing abroad was a necessity rather than a choice.

“This way, we can broaden our earnings from property development. We'll have another source of revenue if the property sector is on a down cycle in Malaysia,” she added.

She said the company was looking at other overseas projects and there might be another in hand by the time the Changshu development was launched.

“Two months ago, we were offered another deal,” Low said, adding that the company might conclude another land acquisition deal in the Klang Valley before the year is out.

Property development would continue to be the core business despite the acquisition of 20,000ha of oil palm plantation in eastern Kalimantan, Indonesia, and the acquisition of Victoria International College, which has a campus in Klang, she said.

The company announced the acquisition of the college from Dynamic Master (M) Sdn Bhd for RM2.5mil recently while the oil palm plantation was acquired for RM15.88mil late last year.

“The college was acquired with a view of transferring the campus from Klang to our Bandar Tasik Puteri where we're in the process of building more amenities,” Low said. The township still has 1,500 acres undeveloped.

Low said AP Land planned to have property management services with property development for future projects.

She said the company would be managing the serviced apartments in Changshu, just like what it would be doing for MyHabitat where Tower 2 would have a serviced hotel residence.

“We're building a management team for the serviced apartments in tandem with the developments,” Low said.

AP Land is no stranger to the hospitality industry. It has a hospitality division that manages the 5-star Crown Princess Kuala Lumpur.

Low said the venture into the agriculture sector was part of the company's strategy to diversify its earnings.

“Our objective is to build a strong division. There'll be further announcements in March,” she said.

This is a strategic decision, keeping in mind the price of crude palm oil, which has breached RM3,200 a tonne in recent times, Low said. “The plantation sector is not new to us, we've done this before,” she added.

AP Land used to own oil palm plantations in Sabah until it was disposed to rationalise and improve returns for the company.

Low said with the conclusion of the sale of City Square Centre to Australia's Macquarie Global Property Advisors in the middle of last year and the settlement of RM350mil debts, the company could look forward to further acquisitions since it was in a stronger financial position.

Macquarie acquired the properties for RM680mil.

“We've allocated two-thirds of the proceeds from the sale after paying off the debt for property development while the rest will be going to plantations,” she said.

AP Land is going regional and China is the first step, Low said.

By the Star (by Fintan Ng)

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