Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Monday, August 24, 2009

Nomad strengthens regional foothold

The office space provider is now negotiating to buy an 80-room serviced apartment in Bangkok and is also eyeing Singapore for a suitable property there

The Nomad Group Bhd, an office space provider, has allocated some RM100 million to expand its serviced apartment portfolio and is eyeing properties in Thailand and Singapore.

The group is now negotiating to buy an 80-room serviced apartment in Bangkok, Thailand, for up to RM60 million. Chief executive officer Hew Thin Chay said the deal could be completed as early as next year.

The average occupancy at this property is now only 40 per cent while its average room rate (ARR) is around RM200, providing ample room for improvement.

In an interview with Business Times, Hew said The Nomad was also eyeing Singapore but has yet to find a suitable property there.

In Malaysia, The Nomad was not keen to buy more hotels or serviced apartments but it was open to managing them instead.

It has been approached to convert a 200-unit condominium on Jalan Tun Razak into a serviced residence and manage it.

In other countries, it is looking at the possibility of operating serviced apartments in Chennai, India, and may consider Indonesia in the future.

Meanwhile, Hew said he expects the group to return to the black this year, as it sees the money coming in from the various investments it made last year.

For the financial year ended December 31 2008, The Nomad incurred a net loss of RM7.63 million on the back of RM25.85 million in revenue as a result of start-up costs.

"We have had eight openings, six of which are offices. It takes start-up businesses about 12 months to mature," Hew said.

Its investment last year include The Nomad Offices at Etiqa Twins, The Gardens Mid Valley and Pavilion Kuala Lumpur.

Together with its space in Menara Hap Seng (which opened in December 2007), it has 80,000 sq ft space, making it the largest serviced office provider in the capital.

The Nomad has ventured into the Gemadept Tower in Ho Chi Minh City, Vietnam, and Interchange 21 in Bangkok, Thailand. It also bought the iOffice and Menteng Office Park in Jakarta, Indonesia.

"In the first half of 2009, we will incur a loss but post positive earnings before interest, taxes, depreciation and amortisation. But I think, by end of the year, we should make profits," he said.

In the first quarter to March 31 2009, it posted revenue of RM7.44 million and net loss of RM235,000.

Its cash cow is the Raffles Place in Singapore, which provides it with RM1.6 million a year in operating profit. The group makes 60 per cent of its revenue from foreign markets.

It is eyeing Hong Kong, South Korea and Taiwan for the serviced office business.

By Business Times (by Vasantha Ganesan)

No comments: