Soft launch of Jesselton Quay project soon
Published on: Monday, April 27, 2015
Kuala Lumpur: SBC Corp Bhd has obtained the long-awaited approvals from the Sabah Government for a soft launch of the first of its many property launches within the Jesselton Quay project, which will be developed over eight years.Managing Director Sia Teong Heng decline to elaborate when asked about the approval.He said that the long-time construction and property player is seeing "positive progress" when it comes to the project which will comprise a waterfront mixed development at the 16.25-acre sea-fronting site, once it is ready.
ADVERTISEMENT
It's been reported that the gross development value (GDV) for Jesselton Quay is RM1.8bil spread over the eight years.However, according to Sia, the figure could go higher than the currently-set GDV of RM1.8bil."It all depends on the prices that the properties can command and the GDV will correspond with market demand."Of the RM1.8bil, the gross development cost has been estimated to be between RM800mil and RM1bil.
ADVERTISEMENT
Under the JV agreement with Suria Capital, SBC Corp is entitled to exclusive rights to develop the entire project on the parcel of land which Suria Capital owns.As part of the agreement, SBC Corp has to pay some RM324mil or 18 per cent of the current estimated GDV to Suria as land cost. This total is spread out over eight payments.
ADVERTISEMENT
Investors who track this counter will recall that shares in SBC Corp soared to as high as RM2.41 apiece last May when the company said it hoped to start some form of construction on the waterfront site in August.Then in October, Sia had said that the company expected to launch some RM400mil worth of properties at Jesselton Quay over the next 12 months.As these plans did not materialise within the anticipated period, investors' interest waned and they started selling, sending the stock well below RM1 where it stayed at, for some time.Notably, in the past one month, the stock has been climbing back up from the 88 sen level to reach RM1.15, up 31 per cent over the period, presumably as it got back on the radar of investors who are banking on an official kick-off of the Jesselton Quay project – very soon.According to Bursa filings, Sia has also been accumulating shares in SBC Corp, buying 670,126 shares at 85 sen apiece on April 10, bringing his direct stake in the family-controlled company up to 11.68 per cent.Sia is the single largest shareholder in the firm after the family's vehicle – Lom Holdings Sdn Bhd – which has a direct stake of 17.38 per cent.Jesselton Quay is not SBC Corp's first Sabah project as it has already both The Peak Vista and The Peak Soho, a residential and commercial development which comprises condominiums and small office home offices there, suggesting its familiarity with doing projects in Sabah.Based on Jesselton Quay's size and plans, it has the potential to be an iconic Kota Kinabalu landmark.Still on Jesselton Quay's plans, SBC Corp had also previously announced that the group and Singapore-based HPL Hotels and Resorts Pte Ltd had entered into a heads of agreement to explore the development of a Hard Rock Hotel within the project. The agreement has since expired.However, the idea to have a Hard Rock Hotel remains, Sia says."It's still on the plate. But we are also exploring opportunities with other hotels to see who can give us the best deal."Meanwhile, apart from its key development the Jesselton Quay, SBC Corp also has ongoing projects in and around Kuala Lumpur city centre, contributing to a current unbilled sales of about RM150mil.Among these, is the Cantonment Exchange, which comprises 33 shops offices, located at Jalan Ipoh and nearby, a 20-acre integrated development made up of villas, condo suites, lofts and commercial units.Collectively, SBC Corp has projects with a total GDV of RM4.8bil spread out over a period of 10 years.It has a net profit margin that is relatively attractive, at above 20 per cent against the industry average of below 20 per cent.At the current price of RM1.15, SBC Corp has a market capitalisation of RM270mil and is trading at a forward 12-month price-to-earnings ratio of about 14.37 times.Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
