E&O banking on strong property sales to boost results

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) is confident of achieving stronger financial results in the current financial year ending March 31, 2012 in view of strong property sales from the past two years.

According to E&O deputy managing director Eric Chan, sales of the group’s property products over the past two financial years has reached close to RM1.4bil, and as at March 31, its unbilled sales amounted to RM810mil.

“Most of our property projects are high-end residential products located within 10km of the Kuala Lumpur City Centre and on Penang island.

“We are a lifestyle developer and will continue to pursue more of such developments in premium and highly sought after locations,” Chan said.

The property division used to contribute between 90% and 100% to group earnings prior to 2008, but in recent years contribution from the hospitality and lifestyle division had been rising.

For financial year ended March 31, 2011, Chan expected property development to make up 80% of group revenue and earnings, while earnings from lifestyle and hospitality, and property investment would make up the balance 20%.

“Over time, we hope to achieve a 60:40 spread between property development and the other two segments,” Chan added.

Income from the lifestyle and hospitality division are mainly from Penang now – the Eastern and Oriental Hotel and the Lone Pine boutique hotel; Straits Quay festive retail mall and marina in Seri Tanjung Pinang; and the E&O concierge services.

F&B, which also comes under the lifestyle and hospitality division, contributed some RM30mil to E&O’s turnover last year.

Chan said with the expansion plans underway for its F&B business, revenue from F&B should reach RM100mil in the next two years.

The F&B division operates five Delicious cafes, a Reunion Chinese restaurant, a DISH steakhouse and a Delicious Ingredients gourmet grocer in the Klang Valley.

The first Delicious cafe outside the Klang Valley opened at Straits Quay festive retail mall in Penang early this month.

Chan said more Delicious cafes were in the pipeline, including one in Sunway Pyramid to be opened in August, and the first offshore outlet will be opened in Singapore in November.

E&O has some RM500mil in its coffers, and the bulk of the cash will be used to launch new projects and buy more land.

“Our Seri Tanjung Pinang development in Penang has been very successful.

“We hope to replicate this in the Klang Valley. To do this, ideally the land should be at least 200 acres to be able to include some lifestyle features in line with our positioning as a lifestyle developer,” Chan said.

He said E&O had set its sight to have more multiple developments so as to generate higher sales.

“Our priority at the moment is to launch projects locally. We have more than RM4bil worth of high-end housing projects to be launched in Penang and Kuala Lumpur. We will make more launches as long as the market can take it. We expect the markets in Penang and Kuala Lumpur to remain positive,” he said.

Among the projects that E&O had planned in Penang are the final batch of seafront terraces and phase two of the Quayside condominiums in Seri Tanjung Pinang phase one.

E&O’s Seri Tanjung Pinang (STP) phase two is currently at the planning stage. It also owns a 365 acres at Gertak Sanggul on the southwest tip of Penang island.

Projects in Kuala Lumpur include the St Mary Residences that are slated for completion in 2012. Those set for launch included condominiums at Jalan Yap Kwan Seng and Jalan Kia Peng, as well as prime bungalow plots in Damansara Heights.

SOURCE: The Star

  1. No comments yet.
  1. No trackbacks yet.
(You can also Login/Register to submit your comment using unique ID)

Comment Guidelines
  • Avoid political discussion.
  • Comments with inappropriate wordings or personal attack may be moderated or deleted.
  • Developer must register before comment. All anonymous comments claimed to be from developer without registration will be deleted.
  • All advertisement in the comment will be deleted. Please contact us for advertising details.

To advertise your property in this page under "Related Properties for Sale/Rent":
 1. Submit your property at PenangPropertySale.com, it's FREE!
 (Please do not advertise your property in the comment)