The Malaysian Reserve, 12 May 2014 - Tropicana to keep tapping into its sizeable land bank

The Malaysian Reserve, 12 May 2014

Tropicana to keep tapping into its sizeable landbank Property developer has plans for new projects from Penang to Greater KL by K VINOTHARAN TROPICANA Corp Bhd will continue to tap into its sizeable and strategic landbank to launch new development projects that cater to current market demand.

The company currently has an undeveloped landbank of 1,954 acres (79076ha) which has a potential new gross development value (GDV) of more than RY170 billion across high growth areas in Greater Kuala Lumpur (KL), Iskandar Malaysia and Penang island. Unbilled sales stand at RM2.4 billion as at end of March 2014.

The company foresees earnings visibility and satisfactory performance for the rest of the year, with construction progress from its ongoing projects gathering pace, its exchange filing last Friday said. "Tropicana's performance in the first-quarter (1Q) of financial year 2014 was largely driven by growth from its core property development division such as Tropicana Cheras, Tropicana Avenue, Tropicana Gardens in Greater KL and Tropicana Danga Bay (Tropez) in Iskandar Malaysia" it said.

Newer projects like the Tropicana Metro Park and Tropicana 218 Macalister on Penang island is also projected to have a steady construction progress, it added.

Tropicana Heights, which has a GDV of RM270 million, received good response with more than 80% take-up following its launch in February 2014, according to the property developer.

The mixed development, sited on 199 acres of freehold land in the residential hot spot of Kajang, has a total estimated GDV of RM1.7 billion and will comprise landed residential products, serviced apartments as well as commercial projects.

The sale of its Jalan Bukit Bintang land via a joint venture with Agile Property Holdings Ltd for RM448.4 million is expected to generate an estimated net gain of RM145 million for the company.

Over the past few months, Tropicana has been able to seal land sale transactions that will raise gross proceeds of about RM1.1 billion, which is in line with its focus to de-gear its balance sheet and add momentum to the its overall transformation strategy.

The company recorded a lower net profit of KM7.82 million in the 1Q ended March 31, 2014, from RM43.8 million last year due to substantial land sales realised during the previous corresponding quarter.

Earnings per share dropped to 0.66 sen from 5.5 sen for the same quarter of last year while turnover for the period also fell to RM299.1 million compared to the RM305.2 million it posted in 2013..