PETALING JAYA: Suria Capital Holdings Bhd (SuriaCap) is looking to expand its property venture, as the main port operator in Sabah seeks a new income stream to mitigate the impact of weaker port business.
Its group chief executive officer Ng Kiat Min told StarBiz that the company would be more inclined to invest in a real estate development that could boost the state’s tourism industry and economic environment.
“Our upcoming flagship mixed-development Jesselton Quay project in Kota Kinabalu is expected to lift the number of tourists that in turn should increase the number of passengers using our ferry terminal and attract more cruise ships to stop by Kota Kinabalu.
“Although our hands are quite full now with two property projects that are yet to be launched, we will not hesitate to look into a third one if it is attractive enough,” she said.
Ng added this would provide the company with a bigger chunk of stable recurring income as they planned to retain some parcels of the developments for lease.
SuriaCap realised RM233.3mil of revenue from Jesselton Quay development in its second quarter ended June 30. The segment contributed 64% of the group’s revenue and 98% of the group’s operating profit for the first half of this year.
Based on the minimum net sale value of RM1.8bil, the Jesselton Waterfront project will carry a minimum guaranteed return of at least RM324mil for Suria Capital, where payment shall be made in eight tranches.
The project was initially to be launched in the first half of 2014 but pending long-awaited related approvals from the Sabah government it has taken a longer time to materialise.
Nevertheless, Jesselton Quay developer cum SuriaCap joint-venture partner, SBC Corp Bhd in a news report earlier last week said that it was currently working on getting the final approvals for the project and it should be cleared within the next few months.
Meanwhile, Ng expected the project to be launched sometime early next year.
“And we hope to start developing our second property project with Gabungan AQRS Bhd dubbed as the One Jesselton Waterfront, also another mixed-development sometime in the third quarter of next year,” she said.
This second project that was inked in March, also has a net sale value (NSV) of RM1.8bil.
On port operations, SuriaCap that operates eight ports in Sabah expected volume to be lower this year based on earlier trend this year that staged a weaker year-on-year performance.
The cargo volume handled by SuriaCap leading terminal, Sabah Ports, is closely correlated to the state’s economy and also the regional economy.
As of June 30, there was a decrease in total tonnage handled by 4% mainly contributed by lower liquid cargo (palm oil and bulk oil), palm kernel expeller as well as general cargo throughput.
Container volume also recorded a decline by 9% to 182,537 from 200,482 TEUs (twenty-foot equivalent units).