High growth in BLand overseas ventures

BERJAYA Land Bhd (BLand), which ventured into the international property development market in a big way two years ago, has in the pipeline a number of interesting residential, commercial and resort projects abroad.

While cautious of the impact of the global financial meltdown on the property market, chief executive officer Datuk Framcis Ng said: “We are invested in these countries for the long term and we have confidence that these countries are resilient enough to weather the downturn and recover when the global economy picks up in time.”

He does not discount the need to slow down or defer some of the company’s projects if the demand is not there.

To finance its ventures overseas, Ng said BLand would be disposing of more assets including shopping malls and overseas hotels, for working capital.

In the past 12 to 18 months, the BLand group had raised approximately RM1.8bil from the sale of assets and Treasury BLand irredeemable convertible unsecured loan stocks. KL Plaza was sold for RM470.6mil in February while the sale of two hotels in Seychelles and Mauritius raked in RM145mil.

Ng pointed out that BLand’s bottomline these two to three years would be well cushioned by income generated from local property development and investment projects, as well as its gaming and hotel activities.

BLand expects overseas ventures to contribute about 30% to the group’s revenue in the next four years.

According to Ng, BLand’s property projects in Vietnam, South Korea, China and Libya will start making more significant contribution by then.

Its maiden project on Jeju island in South Korea, Berjaya Jeju Resort, would make up half of the contribution to the property division.

About 30% of the revenue contribution will come from gaming and the balance from local property development and investment, hotel and recreation businesses.

Ng said together with BLand’s property projects in Malaysia, BLand’s property division could chalk up 50% of BLand’s group revenue by 2012.

BLand’s landbank include 1,000 acres in Malaysia, 660 acres in Thailand, 2,300 acres in Vietnam with investment licences granted, 76 acres in China that are currently under development and 183 acres in Jeju.

The first phase of Berjaya Jeju Resort comprising the North Gate mid-rise apartments is scheduled for launch in the first quarter of 2009.

Over the next eight years, the Jeju project is expected to contribute net earnings of US$100mil a year to BLand.

“In Vietnam, we target to launch the first phase of Thach Ban in Hanoi by early next year. We have started work on the Dong Nai residential development project, and are planning to launch it in the second quarter of 2009.

“We have also received investment licences for the Vietnam Financial Centre and the Vietnam International University Township projects, and are now awaiting construction permits. The four projects in Vietnam are worth a total gross development value (GDV) of US$2.5bil,” Ng told StarBiz.

In China, BLand is developing the Great Mall of China, a retail mall in Beijing which is targeted for completion in three to four years. The project, with a GDV of RM1.8bil is already 10% completed.

The company has also recently ventured into Libya to undertake the development of an integrated golf resort cum residential and commercial project in Tripoli.

The project, with GDV of RM2.5bil would take off in the second quarter of next year.

For the financial year ended April 30, 2008 (FY08), local property projects contributed 20% of the group’s revenue of RM1.5bil while the share from gaming was 56%. BLand recorded net earnings of RM1.1bil in FY08.

Analysts said with the consolidation of BToto as a 50% subsidiary of BLand in February, contribution from the gaming sector was expected to jump to more than 80% these two to three years.

Meanwhile, the annual dividend of RM150mil to RM200mil received from BToto is also a boost to BLand’s cash flow, they said.

By The Star (by Angie Ng)