Ports operator Suria plans to diversify into property development



KOTA KINABALU: Sabah ports operator Suria Capital Holdings Bhd is contemplating a move into property development, as it strategises to further diversify its businesses.

Suria Group started out as a financial institution before diversifying into port operations and related businesses. Its core businesses include bunkering services, contract and engineering.

The group currently has a property subsidiary, Suria Bumiria Sdn Bhd, which oversees a joint-venture project, Jesselton Quay, with Kuala Lumpur-based developer SBC Corp Bhd.

An executive from the group said the property arm only managed the group’s asset, the Jesselton Point ferry terminal.

The facilities it manages include the passenger terminal for boating services to the Tunku Abdul Rahman Park, some retail food and beverages outlets and an indoor futsal centre.

When Jesselton Quay is completed, Suria Bumiria will also manage the development with SBC and other facility partners in the waterfront mixed development.

“Yes, we have plans to manage the completed properties in Jesselton Quay with our partners in the future, but we are also looking to go into property development by ourselves,” the executive told StarBiz after the loan-signing ceremony between SBC and RHB Bank Bhd last Friday.

The executive said Suria currently owned two parcels of land to be redeveloped – the 16.25-acre land etched out for Jesselton Quay and another seven acres adjacent to it where the Jesselton Point ferry terminal sits.

The group has earmarked the seven-acre land to be developed into Suria’s office headquarters and turn the ferry terminal into a water-transportation hub offering ferry, boating services and water taxis. However, Suria has not confirmed if it is developing this seven acres on its own.

“This will be the first water-transportation hub in Malaysia that offers water taxi, connecting locals and visitors to nearby places of interest like Tanjung Aru, the city centre and Likas Bay,” the executive added.

SBC launched a new masterplan last Friday, which it said was essentially modelled after waterfront developments such as Victoria & Alfred Waterfront in South Africa, Marina Bay in Singapore and Xintiandi in Shanghai.

PublicInvest Research property analyst Tan Siang Hing noted: “We understand that the site is a natural harbour known to be the gateway to North Borneo in the early days. We believe that given the great location, Jesselton Quay has the potential to be the next address to watch for, given its proximity to Kota Kinabalu CBD, the international cruise terminal and the future Kota Kinabalu convention centre.”

SBC said at the signing ceremony that it as eager to commence construction within the next few months.

The first phase of the project is estimated to be unveiled by July.

Under the Jesselton Quay JV, Suria is the landowner and will facilitate the development of the waterfront project. SBC has the exclusive rights to develop the entire project.

RHB Research Institute transportation analyst Jerry Lee said in a report that based on net saleable value of RM1.8bil, the Jesselton Quay project would provide a minimum guaranteed return to Suria of at least RM324mil, a guaranteed 18% of NSV, that will be paid in cash or in kind in eight tranches for the next eight years.

Last Friday, SBC obtained a RM240mil loan from RHB Bank Bhd for working capital and bridging loan for the RM1.8bil gross development value JV with Suria, which went unconditional on the same day.

With the JV signed, SBC’s total GDV will leapfrog from RM3bil currently to RM4.8bil. Suria also said it had obtained the land title as stipulated under the port privatisation agreement.

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