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Wednesday, April 29, 2009

Ken looks to RM80m HQ for recurring income

Property developer Ken Holdings Bhd will build its RM80 million headquarters in Taman Tun Dr Ismail to help provide recurring income for the group.

The 12-storey office block, to be ready in three years, is expected to provide an annual rental income of RM12 million to RM15 million.

Construction of the office block will begin by the year-end or in the first quarter of next year.

"We target to build a Grade A and green-mark office block which promotes environmental awareness. We plan to rent out about 90 per cent of the space to tenants," Ken Holdings managing director Kenny B.K. Tan told reporters after its shareholder meeting yesterday in Kuala Lumpur.

Tan said the development will probably be financed using internal funds. The group has zero debt.

Initially, Ken Holdings was supposed to build two 20-storey buildings - an office tower and serviced apartments - on about 5ha along Jalan Burhanuddin Helmi.

It had purchased the land from Prokhas Sdn Bhd for RM15.8 million.

However, the plans came to a halt when residents in the vicinity protested against the development.

On its financial outlook, Tan said the company will be able to sustain its performance with the projects in hand.

It posted net profit of RM6.3 million against revenue of RM39.1 million in the financial year ended December 31 2008.

The gross development value (GDV) of its ongoing projects in the Klang Valley and Penang are estimated at RM700 million and will keep the company busy for five years.

"We will also finish our serviced apartments, known as Ken Bangsar, in Bukit Bandaraya by the third quarter of 2009," Tan added.

The project, with a GDV of RM120 million, comprises 14 floors with 80 units. Prices range from RM650 to RM1000 per sq ft.

The take-up has been close to 50 per cent as Ken Holdings has had two soft launches.

Tan also said that the group was looking to expand its landbank, but only at the right location and a good price.

Ken Holdings has a landbank of 56ha in the Klang Valley, Penang, Genting Highlands and other strategic locations.

Tan said that property prices in prime areas such as Bangsar, Mont'Kiara and the Kuala Lumpur City Centre were still holding firm.

"I can see the low- and medium-end housing being affected compared to high-end projects. However, the property market will probably be a bit more stable by year-end," he said.

By Business Times (by Jeeva Arulampalam) (Posted on April 28, 2009)

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