Hunza delays work on Gurney Paragon mall

Hunza Properties Bhd has delayed the construction of its Gurney Paragon shopping mall project on Penang island until building costs and raw material prices come down.

Chairman Datuk Khor Teng Tong said the RM400 million mall in Jalan Kelawai, Pulau Tikus, was initially scheduled to be completed by 2010, with construction to have begun at end- September.

"We will review the situation by the first quarter of next year on when the project can commence as we want prices of raw materials like steel, glass and aluminium, along with construction costs, to be reduced to a sane level," he told reporters after the company's annual shareholder meeting in Penang yesterday.

The mall is part of a RM700 million Gurney Paragon development, which fronts the famed esplanade, Gurney Drive.

The 4.08ha freehold site in George Town was purchased by Hunza Properties from the Federation of Malaya of the Christian Brothers' Schools for RM97 million.

The proposed shopping mall will boast of a gross built-up of over one million sq ft, with a lettable area of 700,000 sq ft.

Khor said construction of the two condominium blocks in the Gurney Paragon development was on schedule.

"The management is confident of the financial position of Hunza Properties as it enjoys a low gearing ratio, good cash flow position with no financial pressures," he said.

"We will up our efforts to source and buy land in the next two years," Khor added.

He said Hunza Properties' undeveloped landbank currently stands at 346ha, including pockets of land in Penang, Kedah and Selangor.

"We are looking to expand our landbank next year on Penang island and in the Klang Valley as we are looking to tap the 'Malaysia My Second Home' property market," Khor said.

"Since property sales have slowed down due to a depressed economic outlook and uncertainties in the national environment, our view is that strong growth will only re-emerge when the global and local uncertainties are addressed.

"As of now, the group has unbilled sales totalling RM260 million to cushion the impact over the next two years," he added. - By Marina Emmanuel (Business Times)

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