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Friday, August 26, 2011

Selangor Dredging aims for gross development value of RM1bil

KUALA LUMPUR: Selangor Dredging Bhd (SDB) is set to launch several new projects locally and in Singapore to achieve a gross development value (GDV) of RM1bil by the end of next year.

Within the next six months, the developer expects to hit the RM500mil GDV mark through the launches of Hijauan on Cavenagh in Singapore and By The Sea in Batu Feringghi, Penang.

There will also be two more upcoming projects in Cheras and Dengkil to be launched within the first half of next year.

Hijauan was the project SDB had postponed when Standard & Poor's downgraded the United States credit rating early this month. The development located near Orchard Road is slated to be launched next month, with a GDV of RM238mil.

Teh: ‘Despite volatility in the world markets, we have decided to go ahead with the launch.’

“The project was only postponed for a few weeks. Despite volatility in the world markets, we have decided to go ahead with the launch because the market in Singapore was still strong,” managing director Teh Lip Kim told reporters after the group's AGM yesterday.

Teh said SDB was adjusting its income stream to have 50% from Singapore and the remaining half from Malaysia in the next two or three years. Currently, its Singapore developments contribute 30% to SDB's earnings.

“Singapore has the potential to be the next Hong Kong because of it is strong financial standing and the trust people have in their government,” she said.

Chairman Eddy Chieng said SDB branded itself as a niche lifestyle property developer focusing on high turnaround time for all its projects.

SDB does not have large landbanks in Malaysia and Singapore but it acquired land for its projects.

“By not having large landbanks, we do not have huge holding costs and this allows us to have a quick turnaround time for our projects,” Chieng said.

“We have bite-size pieces of land for our niche developments because we are not involved in township development. In Singapore, we are buying on blocks only,” Teh added.

“We are looking to acquire land in Singapore but because the land cost is very high, we have to be very careful. In Malaysia, land would usually cost 30% of the total cost of a development but in Singapore, it could be up 70%,” she said.

On the outlook on local property market, Teh said Malaysia remained good in the next couple of years with generally lower property prices compared to neighbouring countries.

SDB will also be looking into the property market in developed countries including Britain. Currently, it has invested in an office building in London that housed HSBC Bank.

Since moving into property development in 2004, SDB has launched seven projects in Malaysia and three in Singapore with GDV totalling RM2.38bil.

For its first quarter ended June, SDB recorded a net profit increase of 77.7% to RM10.11mil from RM 5.69mil a year ago. Its turnover for the quarter also rose 58.3% year-on-year to RM98.9mil from RM62.48 last year.

The improved performance was due to the good response to 20tree West and Five Stones in Kuala Lumpur and Petaling Jaya as well as Gilstead Two in Singapore.

In the financial year ended March, SDB's net profit was RM30.17mil, 67.9% increase from RM17.96mil achieved last year's. It achieved a turnover of RM346mil for FY2011, a 47.6% increase from RM234.43 in the previous period.

It recommended first and final payout dividendpayout at 5% per share, amounting to RM8mil.

By The Star

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