Five new property players

  • Business
  • Saturday, 30 Nov 2013

FITTERS Diversified Bhd started as a fire-fighting equipment and services company. But in 2008 it set its eyes on the property market. Major shareholder and managing director Datuk Richard Wong tells StarBizWeek that “the company had a clear intention of diversification to seize viable opportunities to enhance the sustainability of business” in 2008. Two business areas were identified for this: property and renewable energy.

In 2009, Fitters embarked on RM650mil GDV project called the Festival City Mall, a three-storey shopping mall located along Jalan Genting Kelang, and which was built for client, the Parkson Retail Group. The project also included Soho/work suites and residential apartments – which were fully sold and are due for handover to buyers next year. In August, Fitters launched 284 units of condominiums called ZetaDeSkye@Jalan Ipoh with an estimated GDV of RM180mil. It will also embark on a RM300mil GDV development of affordable housing on 50 acre.

Earnings wise, the property division is bringing in the income: Wong puts the figure at 50% of revenue and 60% of profit for FY2013 and predicts that the property business will continue to be viable, contributing 40% of revenue and profits.

Asdion Bhd

HEAD honcho at Nextnation Communication Bhd Tey Por Yee has been buying up stakes in a string of companies since the end of last year.

The market has described him as “an opportunist” but it is only recently that the rationale of two of his purchases have become clear.

In September, it was revealed that Asdion Bhd, in which Tey is the largest shareholder, will partner with Protasco Bhd, where he has become the second largest shareholder – to embark on a property development project in Johor Baru.

Protasco is essentially a construction and property firm while Asdion is an information technology firm which makes software. In early September, Asdion said that it would diversify its business to include property investment and development.

The parcels of land in question are located within Mukim Plentong, said to be near Iskandar Malaysia.

In explaining its rationale, Asdion says there is no assurance that the group will be successful in adapting to advances in technology or in addressing changes in customer needs on a timely basis.

Therefore, the board has identified the proposed joint venture with Protasco as a new business opportunity and to reduce the group’s dependency on its existing business.

The proposed joint venture is expected to contribute 25% or more to the net profits of the group, says Asdion.

Asdion concedes that there is “inherent’ risk to this venture.

Asdion was listed in 2005 on the then Mesdaq market, one of the many software companies taking advantage of the “sofware and IT craze” of that era.

It never quite made it as one of the stars among its Mesdaq peers, partly owing to it being a generic accounting software maker. It has also since slipped into the red.

Asdion has also proposed some corporate exercises, including one free warrant for every 10 shares held by its shareholders as well as a private placement of up to 35% of the company’s paid-up capital.

Caely Holdings Bhd

PERAK-BASED lingerie manufacturer Caely Holdings Bhd has completed its diversification into property development and construction early this year.

In July, it announced a joint venture with a private company to develop an abandoned project in Gombak with a GDV of RM155.3mil. It took over the project, which comprises of three blocks of condominiums on leasehold land, for RM7.4mil.

The company said the venture was part of its strategy to expedite the expansion of its property development business while it also marks its foray into the Klang Valley property market. Its venture into property development was in 2011 when it bought 21.4 ha in Batang Padang, Perak to build 181 shops and 304 units of linked, semi-detached and bungalow units worth RM145mil.

Later that year, Koperasi Peserta-peserta Felcra Malaysia Bhd offered the company to build 300 residential units and relevant infrastructure works in Seberang Perak. Subsequently, it was appointed the turnkey contractor for the project with a contract value of RM47.94mil.

Managing director Datuk Alan Chuah reportedly said property development could be its main income contributor going forward, contributing to more than half of its total revenue in the next two years. The division accounted for RM23.66mil or 23.33% of its total revenue for its financial year ended March 31, 2013.

Digistar Corp Bhd

INFORMATION and communications technology firm Digistar Corp Bhd, which recently introduced a hi-tech central monitoring system known as Panther 911 that will contribute to its recurring income from the financial year ending Sept 30, 2014 onwards, is also focusing on its property division.

Group chief executive officer Datuk Wira Lee Wah Chong has expressed his vision to set up another public-listed company for its property arm.

It secured its maiden contract, a RM250mil private financing initiative for a government training centre in Malacca this year. For this particular project, Digistar has a 40% stake. The construction job, with expected completion by early 2016, will also provide earnings flow for the firm as it will operate and maintain the facility for the next 12 years.

Last year, it launched its maiden condominium project at the Malacca city centre. Located across Equatorial Hotel and Dataran Pahlawan in the World Heritage City,

The Heritage Service Apartments, has a GDV of RM150mil. Response for the development was good, recording transaction prices of RM930 to RM1,200 per sq ft.

For its first nine months, property development contributed RM14.83mil or some 31% to its revenue compared with about 7% in the corresponding period a year ago.

Iris Corp Bhd

E-PASSPORT maker Iris Corp Bhd is no stranger to the market, having had its news-making moments.

While most will recall how Iris, the stock was designated many years back due to excessive speculation, these days investors are talking more about Federal Land Development Authority (Felda) coming in as the largest shareholder in the company and its foray into property market.

Iris is reportedly going to venture into the property segment via joint ventures in overseas markets.

According to recent media reports, the company would embark on its first project in Papua New Guinea and consequently in Angola and China.

Iris has been involved in developing homes for Felda.

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Business , property , asdion , fitters


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