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Thursday, May 22, 2008

Sunrise in talks to develop township

KUALA LUMPUR: Sunrise Bhd, which is known for its luxury high-rise projects in Mont'Kiara, is in talks with a landowner for the development of a township.

Executive chairman Tong Kooi Ong declined to give any details on whether it would be an acquisition of land or a joint venture with the landowner.

He said at an analysts' briefing that the company was looking at acquiring several parcels of land outside of Mont'Kiara, the details of which would be made known over the next 12 months.

Tong also said that all land the company was interested in would be within the city.

The company had no plans to go beyond Malaysia besides a five-acre freehold mixed project in Richmond, Canada, he said, adding: “We've looked at China, India and Vietnam but so far we cannot see a justification for the return on equity and return on time but maybe somewhere along the road an opportunity may arise.”

He said the company's policy of setting aside 35% of net profit to dividend would remain for at least the next two financial years. Sunrise's financial year ends June 30.

“There should not be a problem to meet the dividend policy unless our earnings forecasts are wrong.”

Tong said going forward, gross margins would be affected by higher construction and labour costs. “The figures you've seen so far haven't really factored in the construction costs.”

For future commercial projects, the company would prefer to have more en bloc sales because unit-by-unit sales would take longer to sell, he said.

An example was MK20, a freehold six-acre plot of land on Jalan Kiara, which was sold on a put-and-call option to Singapore-based Malaysia Commercial Development Fund Pte Ltd at over RM700 psf, he said.

The RM767mil project will comprise offices, serviced apartments, a retail mall and car parks and will be completed in 2012.

For its third quarter ended March 31, Sunrise posted a net profit of RM20.63mil on revenue of RM156.96mil. Year-to-date, the company posted a net profit of RM115.17mil on revenue of RM517.65mil.

By The Star (by Fintan Ng)

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