Putrajaya Perdana eyes higher real estate income

Putrajaya Perdana eyes higher real estate income


By BUSINESS TIMES

BUILDER Putrajaya Perdana Bhd's (PPB) real estate income may constitute up to a tenth of revenue in fiscal 2008 as it develops more commercial properties and buys more land.

Its commercial units may be partially rented out, company officials say. Leasing out properties allows it to earn recurring income and shield itself from a cyclical construction sector.

"For next year, we are targeting up to 10 per cent. We are pretty strong in commercial development," PPB senior general manager Mak Hong Seng said at a media preview of its "D'Heron at the Lakes" bungalows in Putrajaya yesterday.

"We can adopt the build-lease-transfer mode for a client who wants a building, but does not have the financial resources," Mak added.

Real estate accounted for one per cent of main board-listed PPB's fiscal 2007 turnover, according to its filings to Bursa Malaysia.

Going forward, PPB, a 50.8 per cent subsidiary of real estate group Eastern and Oriental Bhd, also plans to acquire more land outside the Klang Valley. Mak did not specify the locations.

PPB's present landbank includes some 94ha across Putrajaya and Malacca.

Meanwhile, the developer aims to sell up to half of its RM54 million "D'Heron at the Lakes," bungalows upon its launch this September.

The ongoing project comprises 19 energy-efficient homes on a three-hectare freehold site in Putrajaya's Precinct 16.

The two-storey units, priced from RM2.9 million each, will have built-ups of between 423.6 sq m and 450.5 sq m.

PPB's financial year to March 2007 net profit rose 18 per cent to RM38.5 million, or 29.9 sen a share. Revenue grew 23 per cent to RM537.3 million.

Its current real estate jobs here include the "Danau Ayu Townvillas" and "Danau Point" commercial properties.

PPB's construction portfolio, meanwhile, includes the upcoming RM64.6 million Suruhanjaya Tenaga head-quarters in Putrajaya, and the RM186 million Malaysia Technical University's main campus in Malacca.

Shares of PPB closed unchanged at RM2.13, valuing the company at RM287.6 million yesterday. The stock's price had risen 22 per cent so far this year compared with the benchmark Kuala Lumpur Composite Index's 25 per cent gain.