Monday, May 19, 2014

Tebrau - Has 1000 acres "Landbank" In Johor .

Its two year transition to become a high end property developer player bear fruits driven by its biggest shareholder IWH.

Its maiden launch of its first high end project, Botanika @ Tebrau Coast was sold within hours via balloting.

In line with the boom in the Johor property market, Tebrau’s share price doubled over the past two years from 2012. IWH had acquired a 47.16% stake in the developer in Aug 2012 at rm0.76 per share.

IWH, which is spearheading luxury waterfront developments in Danga Bay is a JV between Tan Sri Lim Kang Hoo and Johor investment vehicle KPRJ with Lim holding a the majority stake.

KPRJ has a 8% direct stake in TTB apart from interests held through IWH.

TTB’s net asset value stood at rm542 million.

TTB has close to 1000 acres in the state that will be transformed into a waterfront development dubbed the Tebrau Coast, akin to the Danga Bay development under its parent IWH.

However 70% of TTB’s Johor landbank is submerged and still needs to be reclaimed. This raises the question of whether TTB can be competitive without its margins being squeezed too much.

The company will start to reclaim some of the submerged areas in Sungai Plentong areas soon and is exploring funding options. With more than rm63 million in debt, and cash balances of rm80 million, it may need to recapitalize and gear up to fund the reclamation.

The reclamation process and building of infra will take a maximum of one year to complete.

The reclamation cost would add to TTB’s total land carrying cost of about rm587 million for 381.92ha or close to 1000 acres translating into rm14.30 psf as at Dec 2012.

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