E&O aims to launch RM2.2bil property projects

Eastern & Oriental Bhd (E&O) is targeting to launch some RM2.2bil worth of property projects in Malaysia and the United Kingdom within the next 12 months, according to group deputy managing director Eric Chan.

Some of the identified properties include Seri Tanjung Pinang in Penang, the Kuala Lumpur city centre, Iskandar Malaysia in Johor and Central London starting by the second quarter of this year, he told StarBiz during a recent interview on the group's completion of the RM260.6mil Villas By-The-Sea project in Tanjung Seri Pinang.

Also present were CIMB-Mapletree chief executive officer Raja Noorma Othman and Al-Salam Bank Bahrain chief executive officer Yousif A Taqi. CIMB-Mapletree and Al-Salam Bank Bahrain are partners of Villas By-The-Sea.

These projects include the RM500mil Andaman at Quayside Condominiums (third and final tower), Seri Tanjung Pinang, Penang, the RM400mil Mews Serviced Apartments at Jalan Yap Kwan Seng, Kuala Lumpur, the RM1bil Avira Terraces and Service Apartments, Iskandar Malaysia, Johor, and the RM250mil Princes House Apartments, London.

“Our four main growth engines in Penang, Johor, Kuala Lumpur and central London should sustain us in the coming years. The projects in Penang should generate about 35% of group revenue for the 2013 fiscal year ending March 31, 2014,” he said.

“The contribution from Johor should also be around 35%, while the rest would come from Kuala Lumpur and London for the same period.”

Chan said to successfully develop new property growth engines, it was imperative to develop greater regional and internal exposure of the brand, establishing strategic partnerships to attract the best talent.

On the group's progress to reclaim the 307.56 ha of land in Tanjung Seri Pinang, Chan said the group was now in the final stages of producing the detailed masterplan, following which it would be submitted for approvals.

On the Villas By-The-Sea project, Chan said all the 73 two-storey and three-storey villas had been sold out.

“Buyers comprise both largely locals with a number of foreigners, most from countries such as the United States and Canada, who came in under the Malaysia My Second Home programme,” Chan shared.

E&O properties have generally enjoyed healthy capital appreciation for both landed and strata properties.

“Seri Tanjung Pinang has been extremely rewarding in this sense. The villas, which were first launched at RM2.9mil in 2007, are now fetching about RM3.8mil to RM4.2mil in the market,” Chan added.

Meanwhile, Raja Noorma said the group remained bullish on Penang, particularly in the residential sector due to the compelling demographics, scarcity of land and limited fresh supply.

On CIMB-Mapletree's plans to work with Al-Salam and E&O on future projects, such as the 307.56 ha to be reclaimed in Tanjung Seri Pinang, Raja Noorma said the group would explore and evaluate these opportunities.

“Ultimately, as a fund, we would evaluate entry pricing, viability and whether it fitted into our investment mandate.

“We are open to future joint-venture prospects, as such strategic partnerships have enabled the group to leapfrog, grow and scale-up at a much faster pace,” she said.

On its RM1.5bil real estate fund, Raja Noorma said the funds were invested in 13 development projects throughout Malaysia.

“Since 2005, the fund has been able to generate 12% to 15% returns per annum.

“The Villas By-The-Sea project was one of the 13 development schemes,” she added.

The first batch of the Villas by-The Sea project, comprising 40 detached villas, were sold and delivered to the purchasers in 2009, while the second batch of 33 units of detached and super-semi-detached villas were recently completed and delivered.

The villas enjoy an excellent location at the world-class master Seri Tanjung Pinang development, which is one of Penang's most sought-after residential enclaves, a preferred address among locals and home to more than 20 nationalities of foreigners.

The villas are spread over 6.70 ha and offer spectacular views of the sea.

The showpiece of these properties, the 9,040-sq-ft Martinique Villa By-the-sea, which adopts a modern tropical and Caribbean-inspired architectural theme, emerged the winner of the “Best Villa Development (Malaysia)” in the South-East Asia Property Awards 2011. - By DAVID TAN (The Star)

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