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Wednesday, August 13, 2008

Bolton plans RM3b projects

PROPERTY developer Bolton Bhd plans to launch some RM3 billion worth of properties over the next two years as it aims to become one of the top players in the industry.

Most of the new properties, located in the Klang Valley, will be high-end residential units, as it can enjoy better margins.
Developers that focus on the middle- and lower-income market are in a tough spot now

Although costs have gone up by 20-35 per cent, it is difficult to pass them on to buyers who are more price-sensitive.

"As a result, a lot of property developers are reviewing not only their sales prices, but their ability to launch the project. However, for properties in the higher-end, I think the demand is still very strong and margins are quite healthy," said chairman Datuk Azman Yahya said after the company's annual general meeting in Kuala Lumpur yesterday.

About 60 per cent of Bolton's revenue comes from high-end properties.

The company expects higher sales and earnings for the financial year ending March 31 2009, despite the overall slowdown in the property market.

"We believe that based on the product offerings that we have and the demand we are seeing today, our numbers for the year will still be very strong," Azman explained.

The launches in the pipeline include the Mayang Development - the two-tower 45-storey high-end condominium with an estimated gross development value (GDV) of RM2.5 billion, The Piazza at Puchong (RM105 million GDV), Tijani 3 (RM100 million GDV), and Bolton Court (RM100 million GDV).

The company plans to buy more land and take over smaller rivals. It hopes to seal some of the deals over the next 12 months.

Bolton now has 340ha, which will keep the company busy for the next five years.

Funding is not likely to be an issue, as the company has over RM60 million in cash, and its net gearing has fallen to 0.31 times from 0.67 times.

For big projects, Azman said the company may invite private equity funds to take part.

Bolton also hopes to sell its non-core assets such as the Campbell Complex and Langkawi Fair by the end of March 2009, to focus on property development.

A due diligence on Campbell Complex, which offers an occupancy rate of 84 per cent, is currently ongoing.

Azman believes Campbell Complex is worth about RM55 million, while the Langkawi Fair, the island's largest shopping centre, is worth about RM45 million to RM50 million.

By New Straits Times (by Goh Thean Eu)

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