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Wednesday, July 1, 2009

KLCC Property expects stable revenue

KUALA LUMPUR: KLCC Property Holdings Bhd expects a stable stream of revenue from its property investment and retail divisions to offset the decline in its hotels business for the financial year ending March 31, 10 (FY10).

Hashim Wahir speaking to reporters after the company's AGM on Tuesday.

Chief executive officer Hashim Wahir said the group remained positive on the outlook of the commercial properties it owned due to the long term lease and quality leasees it had.

“We have good tenant mix with good credit standing for our investment properties within the KLCC integrated development and we believe KLCC is still a premier address to have in Malaysia,” he said after the company AGM yesterday.

With high traffic volume in the KLCC precinct, the group foresaw sustainable performance for its retail business as some new brands had shown interest to come to Suria KLCC shopping mall, he said.

In contrast, the group’s hotel operations has seen some considerable pressure following the downward trend in the average occupancy in hotels due to the declining number of tourists.

“We will ensure that the service provided by our hotels matches the luxury position of the hotel. We will make certain that our customers are satisfied with the services and facilities provided by our hotels,” Hashim said.

The group would also regularly review its operating costs to contain costs and maintain profitability.

Hashim said the group would decide on revising its room rates upwards or downwards based on supply and demand.

On growing its assets portfolio, he said: “We are currently on track to complete our RM1.1bil Lot C office towers development, which we target to be fully operational by 2011.”

Located beside the Petronas Twin Towers, Lot C would offer 84,000 sq ft office space for lease.

The group is also looking to develop 1.5 acres next to Lot C and the Mandarin Oriental into a mixed development project.

“We believe that there is still strong demand for grade A offices,” said Hashim.

“We target to double the commercial space that we’ve developed for lease within the KLCC vicinity to 24 million sq ft in the next five to 10 years time from 12 million sq ft now.”

On the redeemable convertible unsecured loan stocks (RCULS) of RM714.1mil, Hashim said the board was in constant dialogue with its shareholders on the conversion date of the RCULS but nothing was confirmed yet.

For FY09, the group registered a net profit of RM535.65mil on revenue of RM861.22mil.

Its investment properties i contributed 45% and 30% respectively to the group’s revenue, while its hotel operations contributed 19%.

The remaining 6% was derived from its management services division.

By The Star

1 comment:

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