Equine seeks new growth areas for stronger earnings


BY ANGIE NG

EQUINE Capital Bhd is set for aggressive expansion and will venture into more township development in new growth centres to derive stronger earnings, executive chairman Datuk Patrick Lim said. 

Equine, which has a 23% stake in Penang-based Abad Naluri Sdn Bhd, is actively pushing for a mixed development project on 450 acres in Batu Kawan, Seberang Perai, in Penang. 

“We are putting all the building blocks in place to venture outside our stronghold of the Klang Valley to leverage on our success as a township developer,” Lim told StarBiz in an interview. 

The Batu Kawan project is expected to contribute substantially to the group income stream from financial year (FY) ending March 31, 2004. 

Lim said Equine was also on the look out to expand its landbank in the Klang Valley, either through acquisition or joint venture with land owners. 

Datuk Patrick Lim pointing at the massive development in Bandar Putra Permai. The building under construction in the background is the drive-through McDonald's outlet. - STARpic by Kevin Tan

“With the rebound in demand for property, as a township developer, we are in a strong position to build according to market demand and offer the right product mix at the right pricing and timing,” he said. 

The group has developed more than half of its 850 acres in Seri Kembangan, with the balance 336 acres set to keep it busy for the next five years.  

Equine's three flagship projects - Taman Equine, Pusat Bandar Putra Permai (PBPP) and Putra Permai - located within the Multimedia Super Corridor (MSC), have emerged as one of the fastest growing area in the southern growth corridor.  

He said Taman Equine - a high-end development on 550 acres comprising bungalow lots, townhouses and commercial properties, would be the key driver of the group's medium-term earnings growth with RM578mil worth of projects to be launched beyond FY 2005. 

“Having made a success in the medium-range properties, especially in Putra Permai, we are moving into more upmarket range of residential properties. Our aim is to continue to sell between 1,200 and 1,500 units a year.” 

The lower- to medium-cost components of the township, which have been completed and almost fully sold, is known as Putra Permai.  

PBPP, with medium to high range of development on 239 acres, is expected to see new launches to the tune of RM183.5mil in FY 2004 and 2005.  

Lim said Equine was on target to achieve a 10% to 15% growth in pre-tax profit on net realisable sales of RM1bil over the next five years. 

In the last two to three years, the group achieved cumulative sales of more than RM326mil from the three ongoing projects.  

Equine, which assumed the listing status of Kuala Lumpur Industries Holdings Bhd (KLIH) in October last year, has performed beyond its projected sales of RM79.4mil in the nine-month period up to Dec 31, 2003. 

“Sales reached RM83.7mil during the period,” he said. 

For the current FY, Equine expects to double its revenue to RM177.1mil and net profit is expected to grow 23% to RM29mil. 

Lim said Equine's disciplined approach in property launches had helped to create value in its projects and contributed to the good sales response. 

“With the necessary population mass in our townships, we will be launching more commercial units from now on. We expect about half of the launches between 2005 and 2008 will comprise commercial properties priced from RM300,000 to RM600,000.” 

Todate, a total of 250 shophouses have been sold in the commercial precincts of Taman Equine and Bandar Putra Permai. Earmarked for launch in March are 54 units of shopoffice at the PBPP commercial centre.  

“We have over 20 acres allocated for the PBPP commercial precinct and will undertake new launches according to market demand. This way we actually help our buyers to build-up their business base and create the necessary traffic.” 

The public bazaar and bus terminal, to be built by Equine, would also contribute towards shaping the township into the nerve centre of the growing Bandar Putra Permai. 

Lim said Equine Square, scheduled for launch in April, would feature the country's first drive-through mall. 

Sited on 27 acres, the mall would be linear in design with about 40 units of two- and three-storey shop lots built according to the tenants' needs.  

“These purpose-built shop lots of varying sizes from 1,500 to 41,000 sq ft will be leased to a mix group of specialty operators of alfresco dining, fast-food restaurant and even a food court, to cater to the growing population here. A supermarket will occupy about 150,000 to 200,000 sq ft,” he said. 

Also scheduled for future launches in the vicinity are seven condominium blocks and low- and low-medium cost apartments.  

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