Management Discussion & Analysis


The Group’s revenue recorded an increase of 12% to RM188 million from RM168 million in preceding year. Contracting works and Malaysia Properties were the main contributors to the Group’s revenue by achieving revenue of RM73 million and RM99 million respectively while Renewable Energy segment generated RM16 million. The improved revenue mainly arose from Malaysia Properties with higher sales for Kayangan Heights, Shah Alam and the sale of a piece of land in Pajam, Negeri Sembilan for RM12 million.

Profit before taxation 
Malaysia Properties   18,241 17,597
Overseas Properties   10,409 70,320
Contracting & Renewable Energy   3,817 3,067
Total   32,467  90,984

The Group achieved profit before taxation of RM32 million for the financial year ended 31 March 2017. This was lower than the previous financial year as profit from sales of overseas properties is only recognised upon completion and there were no major completions during the financial year. In the previous financial year, the disposal of 60 apartments in 4B Merchant Square in Paddington, London contributed significantly to that year’s results.

Profit from Malaysia Properties was derived from sales at Sibujaya, Kayangan Heights and the sale of land in Pajam. Profit was 4% higher at RM18 million as compared to the previous year due to profit of RM3 million derived from the sale of land offset with lower interest income.

Contribution to Overseas Properties during the financial year was from the sale of Concieria Tower’s West units and Westminster Nanpeidai in Tokyo coupled with net rental income from Sampson House, London. In accordance with accounting convention, profits from Holland Park Villas and Burlington Gate will only be recognised on completion scheduled in the coming financial year ending 31 March 2018.

Residents Concierge of Burlington Gate, Mayfair, London

The Contracting and Renewable Energy segment’s profit before taxation has increased by 24% to RM4 million from RM3 million in the preceding financial year due to higher generation from our solar farm in Gemas and higher profits from contracting offset with lower rainfall at Sungai Perting due to effects of El Nino phenomenon.

There is no significant movement in the Group financial position except for the injection of RM436 million into its overseas investments and construction of hydro plant in Sungai Liang. Correspondingly, cash and bank balances of the Group decreased from RM234 million to RM166 million and gearing ratio increased to 33% from 13% as at   31 March 2016 from the drawdown of facilities to finance the investments.

The Group’s shareholders’ equity as at 31 March 2017 stood at RM967 million and net assets per share stood at RM1.42. The Board has proposed a dividend of 3 sen per ordinary share amounting to RM18 million which would represent a near full pay-out from this year’s recorded net profit.


The Group has three main operating segments: with its core business of Properties segregated geographically into Malaysia and Overseas Properties, together with Contracting and Renewable Energy segment. For Properties, the Group targets projects which are ready to be developed or marketed with a predetermined turnaround time in order to maximise shareholder value. Since 2009, the Group has ventured abroad and has achieved numerous project wins in London from commercial to residential projects. For larger scale developments, the Group normally forms joint venture with reputable international partners. Meanwhile, Contracting and Renewable Energy provide stability in the form of recurring earnings to counter the cyclical nature of property markets. The Group aspires to be a growing property company with business in prime locations of key global cities.

Malaysia Properties

At the local front, the Group continues to work with the Housing Development Corporation (“HDC”) to build a sustainable and thriving Sibujaya township in Sarawak by ensuring the right infrastructure is put in place for the benefit of the steadily increasing number of residents. Sibujaya is a joint development between the Company and HDC, a Sarawak government agency. The Group has developed 60% of the land area for Sibujaya township development, the remaining undeveloped land of over 622 acres is likely to last the Group for at least another 10 years. The Sibujaya Public Library was recently completed and the Group is working with HDC to add a brand new sports arena and mosque to further complement the township.

During the financial year, the Group completed and handed over Pearl Avenue Phases 3, 4 and 5 consisting of 197 units of double-storey residential terrace house in the last quarter of 2016. This project with gross development value (“GDV”) of RM65 million had been fully taken up. During the financial year, the Group further launched Coral Avenue Phases 2, 3 and 4, consisting of 167 units of double-storey terrace house with an estimated GDV of RM57 million and 28 units of three-storey shophouse at an estimated GDV of RM34 million. Sales achieved for the above residential units during the financial year were 123 units (2016: 96 units).

London Properties

Holland Park Villas is situated in the heart of the Royal Borough of Kensington and Chelsea, adjacent to Holland Park. This private and gated 72-apartment ultra-prime development was designed by John McAslan & Partners with a touch of nature and equipped with amenities such as a 20 metre pool, business suite, cinema, gymnasium, private gardens and woodland walk. This development has an expected GDV circa £611 million (approximately RM3.4 billion) with an average selling price above £3,500 per sq. ft.. It has registered forward sales of about 61% of its 72 units with 12 of them valued at approximately £84 million (approximately RM469.6 million) achieved post the UK Referendum to leave the European Union (“BREXIT”). The remaining unsold units will be progressively released for sale with the availability of an on-site show apartment to aid in marketing plans. The building is currently nearing completion with the apartments being fitted out to high quality specifications. The surrounding landscaping works are ongoing to present an experience of formal and natural landscaping especially the central courtyard garden with pathways through soft natural shrubs and trees.

Show unit of Holland Park Villas

Burlington Gate is a redevelopment of 42 brand-new luxury apartments with world class amenities located in the prime district of Mayfair known for its luxuries and art. This residential development will also feature art galleries on the ground floor and lower ground floor, modernised into a new public arcade, which is the first in Mayfair since the 1930’s creating a dynamic public space through route between Old Burlington Street and Cork Street. This unique development has an expected GDV of £277 million (approximately RM1.5 billion) and has been well received with forward sales of 88% of the units with an average selling price of £3,700 per sq. ft.. The retail spaces on the ground and lower ground floors have also been fully pre-sold. The remaining 2 premium units and 3 penthouses will only be released to the market on completion to fully unlock their potential values.

Both Holland Park Villas and Burlington Gate are expected to be completed and delivered before December 2017.
Atrium of Burlington Gate
Meanwhile, in May 2016, the Group together with other international investors completed the acquisition of Sampson House and Ludgate House in Southbank, London. The properties, now re-branded as Bankside Yards, were acquired with the benefit of an existing planning permission for a comprehensive redevelopment scheme to transform the existing two office blocks into a world class residential led mix development complete with state-of-the-art offices, retail and leisure facilities with GDV in excess of £1 billion (approximately RM6.1 billion) for a total area close to 900,000 sq. ft.. Currently, the consented redevelopment scheme is being refined with various enhancements including apartment units and size allocations, office space distribution, basement size and public realm improvements to redefine the London skyline along the Thames River. These various initiatives are expected to contribute an additional saleable area of approximately 200,000 sq. ft. above the existing planning permission, bringing the total area to about 1.1 million sq. ft.. 

Location of the Group’s projects in prime central London (demarcated by the red line)

In parallel to the planning application, preliminary demolition work was undertaken on Ludgate House in 2016 with full demolition work expected to commence in 2017 whilst retaining Sampson House, presently leased out to a global IT company. The Group is engaging with the tenant to obtain vacant possession of the property for a smooth implementation of the redevelopment scheme. This investment is the Group’s largest development on prime central of London so far and is anticipated to anchor contributions to the Group from 2020 onwards.

As an extension of the Group’s strategy to acquire properties in prime central London for value-add and redevelopment into upmarket and highly coveted properties, the Group entered into another joint venture in March 2016 for Kilmuir House, a 49 two-bedroom apartment block totalling 35,504 sq. ft. in the heart of Belgravia, with a triple frontage to Eaton Terrace, Ebury Street and South Eaton Place, within very close proximity to Eaton Square and Sloane Square. Following the strategy to reposition this 1950’s property for rental investment, Kilmuir House had undergone an extensive refurbishment programme completed in April 2017 and is now ready for rental. Redevelopment plans are already underway to collaborate with the owner of an adjoining piece of land to deliver an exclusive prime new built development scheme which blends with the surrounding retails and public realm on Elizabeth Street and around Pimlico Green.

Tokyo Properties

The Group’s 38.46% joint venture with Grosvenor Asia Pacific and Nan Fung to invest in real estate projects in Tokyo (“the Japan JV”) has certainly borne fruit. Since the start, the Japan JV has invested in three projects in Tokyo with the Group injecting its share of capital of about ¥3 billion (approximately RM111.7 million), amounting to approximately 57% of our total commitment. This is due to the very tight market conditions with the favourable sentiment limiting supply. The Group will continue to keep tabs on the property market pulse for any further opportunities that may arise.

The Westminster Nanpeidai, Japan

The acquired 52-unit Forest Nanpeidai residential apartment underwent a carefully planned refurbishment, incorporating the high UK lifestyle set by Grosvenor Group. It is now rebranded as The Westminster Nanpeidai and the units are released for sale in phases since early 2016. To-date about one third of total units have been sold at total sales value of about ¥4 billion (approximately RM142.1 million) with the balance units to be released for sale over the remaining two years. Another project was the Concieria Tower’s West located in Nishi-Shinjuku comprising 17 office and retail units. The strategy taken by the Japan JV was to acquire on an en-bloc basis, stratify and dispose the units individually at a premium. To-date, 10 of the 17 units have been sold at above ¥2 billion (approximately RM91.9 million).

The remaining investment is 62 apartment units in a mixed-use building known as Court Annex Roppongi, located adjacent to the prominent Roppongi Hills. The property is part of a proposed redevelopment scheme arranged by Nomura Real Estate Development to transform the subject property and surrounding buildings into a new mixed-use development comprising retail, offices and residential units with the owners of existing building having strata ownership in the new development via an equivalent exchange programme. The Japan JV plans to exit the project by disposing the strata rights obtained via the equivalent exchange programme. This is planned to take place in 2019.
Madrid and Hong Kong Properties

With the success in London and Tokyo, we were happy to continue our partnership with Grosvenor to tap into two key global cities, Madrid in Spain and Hong Kong. There remains a significant shortage of supply in Madrid with high foreign interest seen while prices have clearly reversed its downtrend since the global financial crisis. In Hong Kong, our focus will be on en-bloc buildings in good locations with value-add potential. Commitments by the Group include to inject up to €35 million (approximately RM171.9 million) and HK$349 million (approximately RM192.1 million) respectively to develop or acquire properties with value-add potential. In February 2017, a plot of residential land measuring 822 sq. m. with planning secured situated at Jorge Juan Street, Salamanca, Madrid was acquired at the price of €9 million (approximately RM44.2 million). The plan includes developing 6 exclusive apartments, a penthouse and carparks which overlook the 350 acres Retiro Park with an expected GDV of €19 million (approximately RM91.3 million). Construction is expected to commence in 4th quarter 2017 and targeted completion in 2019.

Left to right: Lee Keen Pong (Managing Director), James Raynor, Chief Executive of Grosvenor Europe, Shahman Azman (Deputy Managing Director) and Soo Kim Wai (Director)

Renewable Energy and Contracting

Our 6MW mini-hydro plant located in Sungai Perting, Bentong generated clean energy of 24.8GWh during the financial year. This was lower than the 28.6GWh last year due to the El Nino phenomenon which saw a prolonged dry spell with the lowest recorded rainfall on site since we commenced operations. During this low flow period, the Management seized on the opportunity to bring forward the necessary maintenance on the power plant. Meanwhile, continuing enhancements to our system saw improved performance ratios at our 10.25MW solar farm which generated a higher output of 11.9GWh, 3% higher than the previous year despite a 4% lower recorded annual irradiation.
10MW Sungai Liang Lower Scheme turbines and generators installed


The Renewable Energy Division current year’s generation of 36.7GWh is expected to increase by a further estimated 85GWh with the commissioning of the hydro plant in Sungai Liang, Pahang in 2nd half of 2017. As a single project, the upcoming plant consisting of the Upper and Lower Sungai Liang with four turbines housed in two separate powerhouses will be the Group’s largest hydro project to date under the Feed-in Tariff regime. Both powerhouses are connected with fibre optic cables to allow for connectivity and remote monitoring from either powerhouse. The construction works have progressed well during the financial year and are nearing completion.

The Group’s Contracting segment focused on mechanical engineering works for Heating, Ventilation and Air-conditioning completed several notable projects during the financial year including the Damansara Uptown and St. Regis Hotel. Works have commenced on KL Equatorial, Johore Land and Ruma Hotel while new wins include the Cardiac Vascular Centre in KL Sentral and Penang Sentral project. The remaining unbilled book orders stood at RM72 million. 


The Group expects the completion of Holland Park Villas and Burlington Gate in the coming financial year ending March 2018 to contribute positively to the Group’s earnings. Depending on the sales recorded, this may also contribute towards the financial year ending 2019. In the meantime, the Management would focus on completion, handover and sale of the remaining unsold units. We will continue to work with our international joint venture partners on the development of its existing projects and to source for further properties across Madrid and Hong Kong. Locally, the Group would maintain the momentum of Sibujaya township development while keeping an eye out for opportunities. We also look forward to the commissioning of our new mini-hydro plant in Sungai Liang.

The main risks for the Group include the timing of sale of remaining units for Holland Park Villas and Burlington Gate, the political and tax developments in the country of our investments, the volatility of both our local and investment currency as well as maintaining adequate capital and funding for our committed investments.

With Holland Park Villas and Burlington Gate nearing completion, the potential Ultra High Net Worth Individual (“UHNWI”) buyers would be able to benefit from an on-site show unit as well as first-hand look and feel of these exceptional units.

This factor is a great aid for sales and arrangements are in place to work with international property agents to market these units discreetly across the globe. Despite the protracting process of BREXIT and its future impact on tax, immigration, currency etc., London is likely to remain resilient and globally attractive as an investment destination for UHNWI. Deposits amounting to 20% of the sale price have been collected from all purchasers and costs have also been pinned down, thereby mitigating other risk factors of both projects.

Foreign currency volatility may affect our income statement when profits are translated into RM but the Group takes a longer term view of its investment destination and the capital and profits are normally kept in the respective country’s currency for further acquisitions. Where possible, foreign currency borrowings from financial institutions are obtained to act as a natural hedge or hedges are entered into to manage some of this volatility in line with certain predetermined guidelines.

To fund our commitments, we use a combination of borrowings and cash, both in RM and foreign currencies. Any further depreciation of RM or other currencies against the chosen investment currency may potentially hinder us from meeting our capital commitments to the joint ventures. Thus, we normally ensure prudency and adequacy of funds prior to entering into any joint venture.
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