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Monday, October 5, 2009

Property development to be Tradewinds top revenue earner

TRADEWINDS Corp Bhd expects property development to start contributing significantly to its revenue sometime between 2011 and 2012, its top official said.

The group undertook a restructuring exercise in 2008 to focus on hotel and property development.

The contributions are expected to come in once projects which are now on the drawing board are launched from 2010 onwards.

In 2008, Tradewinds' property division, including rental income from Komplex Antarabangsa and Menara Tun Razak, made RM24.51 million representing 5.2 per cent of total revenue.
"We expect to launch projects in 2010 that will see revenue coming in in 2011 or 2012," TCB's chief executive officer Shaharul Farez Hassan said.

"And we expect property development to overtake hotel contributions (in terms of revenue) in four to five years' time," he added.

Hotel operations now contribute 70 per cent of total group revenue.

In a recent interview with Business Times, Shaharul said given that it was only beginning to establish itself as a property developer it will take sometime for the segment to mature and make a mark.

TCB now has 365ha of land in Nusajaya in Johor for development. TCB plans to form tie-ups with established property developers to launch its housing projects.

It has already entered into a 49-51 per cent joint venture agreement with United Malayan Land Bhd (UM Land) holding the majority share, to develop land in Nusajaya.

At the same time, it is also looking for land within the Klang Valley and Penang to buy or enter into joint-venture pacts for property development projects.

Previously, TCB's venture into property development has been by roping in a developer to develop land that it owns.

These projects include Bandar Baru Pulai in Johor and Bandar Jaya Putra in Mount Austin, Johor.

In the half year ended June 30 2008, property division contributed RM13.6 million in revenue.

TCB in 2008 split its plantation and sugar refining business from the group to focus on its hotel and property operations.

By Business Times

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