The Business Times
Ong Chor Hao
ROWSLEY Ltd, which has transformed itself into a property player, could launch residential units from its key development project in Johor's Iskandar region by early next year. The company is also confident about demand despite the possibility of Malaysia's southern-most state imposing a new property tax on buyers.
Ho Kiam Kheong, executive director at Rowsley who oversees its sprawling Vantage Bay development, said this yesterday. Vantage Bay is a mixed-development comprising residences, offices, a mall and a hotel on 9.23 hectares of waterfront land about one kilometre away from the Causeway.
The number of units for the first phase of residential units to be launched was not revealed, but Mr Ho said that overall, Vantage Bay should have more than 3,000 homes.
Prices were also not available, but Mr Ho commented that on a "like-for-like" basis, prices in the area have gone up quite a bit and have surpassed the 1,000 ringgit (S$391) per square foot mark "quite significantly".
While the company is "obviously disappointed" with the possibility of a new tax of about 4-5 per cent of the property price that the local government is mulling over, Mr Ho also welcomed the weeding out of speculation in the market.
He added that the intervention was also a clear sign of sustained demand. "It's hot enough for the government to want to do something."
The journey of Rowsley, controlled by billionaire Peter Lim, from an investment holding company to a real estate player in Iskandar began after it announced two significant deals last December.
The first was to acquire the land that now houses the Vantage Bay project for $358 million; the second was to buy RSP Architects Planners and Engineers for up to $187.5 million.
It has paid in full for the land and about $131.3 million of the consideration for RSP by issuing some 3.3 billion shares at 15 cents each after shareholders gave the green light for the deals last month. It has also issued two free warrants for each share that investors hold. The warrants start trading tomorrow.
The outstanding $56.3 million in consideration for RSP is subject to the architectural firm achieving a net profit after tax totalling $75 million for the next three financial years starting from 2013.
Lai Huen Poh, also an executive director at Rowsley, said the vendors for RSP are expecting to exceed the first-year earn-out target, after making a net profit of $25 million last year.
With its transformation, Ho Tat Kin, executive chairman at Rowsley, noted that the company's market cap has jumped from $140 million to some $1.5 billion in less than a year.
Acquiring RSP provides a strong recurrent income stream, and the firm's expertise and Rowsley's landbank in Iskandar mean "we now have the platform, synergy and scale to put Rowsley on a solid footing as a premium, quality developer", Dr Ho said.
He added that Rowsley is currently debt free and lining up project financing for Iskandar.
It has been swinging between losses and gains in recent years, most recently reporting a net loss of $975,000 for its first quarter ended June 30.
The counter closed 5.6 per cent down at 34 cents yesterday