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Thursday, November 13, 2008

WCT coping well with lower costs

PETALING JAYA: Lower operating and interest costs are helping WCT Bhd cope well with the slowing property market.

An analyst said most of WCT’s development land bank was fully paid for and hence the company was not incurring high interest payment compared with developers that had borrowed to procure land.

“WCT has the luxury of deferring property launches and waiting for the right time as it does not borrow heavily for its land bank.

“In addition, it uses an in-house contractor for its high rise and bigger-scale developments to gain better control of the construction costs and planning,” he said.

“However, for landed housing development such as Bukit Tinggi, WCT did sub-contract to others,” he told StarBiz yesterday.

WCT’s township development Bukit Tinggi 1 and 2 in Klang have a total 100 acres undeveloped land earmarked for commercial development, while Bukit Tinggi 3 or Parkland has 300 acres for future residential and commercial projects. These areas are fully paid for.

For its high-end homes, d’Banyan Residency in Kota Kinabalu, Sabah, which was partially financed, the land cost can be covered by unit sales this year. Priced at RM300 per sq ft, the project has a gross development value (GDV) of RM264mil and so far, homes worth RM60mil have been sold.

As at June 30, WCT had unbilled sales of RM174mil to be realised over the next 16 months. Currently, WCT’s property division contributes about 10% and 25% to group revenue and net profit respectively.

Meanwhile, WCT unit Jelas Puri Sdn Bhd is developing the RM1.4bil Paradigm, a high-end mixed development project on 12.5 acres in Petaling Jaya, for which it partially financed the land cost of RM85mil.

The construction of the basement car park has started and its shopping mall is targeted to be operational at the end of 2010.

Construction at another WCT flagship mixed development, Platinum Plaza in Ho Chi Minh City, Vietnam, will begin for the shopping mall by end of 2009, while the launch of the office component was expected by 2010.

When completed, it will be the second biggest shopping mall in Vietnam. Spanning 9ha, Platinum Plaza will will also comprise a business class hotel. However, the GDV of the project is still under planning.

By The Star (by Law Kai Chow)

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