Ken JBCC’s 1st Phase to be Launched in 2015

The Edge, Financial Daily | September 2, 2014.


Ken managing director Sam Tan has assured that Ken JBCC will gather momentum starting next year as the company is now in the process of obtaining final approvals for the master plan of the development from local authorities. – The Edge Financial Daily pic, September 2, 2014.

KEN Holdings Bhd will kick-start the first phase of its mixed development in Johor Baru known as Ken JBCC with the launch of one block of serviced suites in 2015.

The mixed development was initially earmarked to be launched in 2014, but was postponed as the company needed more time to fine-tune the master plan. The whole of Ken JBCC carries an estimated gross development value (GDV) of RM1.2 billion.

Ken managing director Sam Tan has assured that Ken JBCC will gather momentum starting next year as the company is now in the process of obtaining final approvals for the master plan of the development from local authorities.

“It is quite a big master plan and we took some time to ensure that the master plan is correct. We are planning this to be the green district and we are aiming for the top rating [in the BCA Green Mark Scheme],” Tan told The Edge Financial Daily in an interview.

Ken JBCC will comprise residences, commercial units, a shopping mall, serviced suites, hotels and offices on 22 acres (8.903ha) of land in the Johor Baru city centre, just 2.5 km away from the causeway. It will be Ken’s largest development project to-date in terms of GDV.

The timing of Ken JBCC launch next year may seem to be at odds with the popular opinion that there has been an oversupply of residential properties in the Iskandar Malaysia region, but Tan is not overly concerned.

Instead, he said the timing of the launch is “right” as Ken JBCC’s “good value”, good location in the city centre as well as Ken’s construction and engineering experience will win over local buyers.

“The biggest problem with Johor Baru is that it has become unaffordable, especially for the locals. We are trying, especially in the first phase to have a product where it can still be affordable for people who live there. If we can create something for less, people will still buy from us,” Tan said.

The development also fits into Ken’s longer-term plans to secure sustainable income through growing a portfolio of investment properties.

The properties to be developed and kept for recurring rental income include Ken TTDI (an office-tower in Taman Tun Dr Ismail, Kuala Lumpur), the shopping mall, hotels and other components in Ken JBCC, as well as other hotels that the company is developing.

Besides the hotels in Ken JBCC, Ken has plans to develop its portfolio in the hospitality business by building hotels in Shah Alam in Selangor, Kota Baru in Kelantan, Batu Ferringhi in Penang and Genting Highlands in Pahang.

The company is in talks with several international and local brands to form partnerships to manage these hotels.

Meanwhile, Ken has invested RM120 million to build a 13-storey office tower with 20,000 sq m  of lettable area in TTDI. The office tower is expected to rake in an estimate of RM15 million in rental per annum after its completion in 2015.

According to Tan, Ken will be able to build these investment properties because of the company’s steadily improving financial position after years of “very conservative” management of its balance sheet.

“We want to make sure that each project we do will contribute back to the group. If you look back at our charts, the net assets of the company have been on an upward trend. It does not spike, it does not go up and down. It is a gradual growth upwards,” said Tan.

He added that the net cash position that the company is always in has helped Ken grab business opportunities where other developers who need to gear up would miss.

Ken’s net asset value or shareholders fund has been on a steady upward trend in the last five years. As at Dec 31, 2013, shareholders fund stood at RM183.6 million, a 10% growth from the preceding year and 64% higher from RM113.6 million as at end-2008.

The company’s latest results announcement also revealed that for the first half ended June 30, 2014, net profit came in 42.5% higher at RM10.6 million, while revenue grew 22% to RM29.2 million. As at June 30, 2014, Ken’s net cash position was at RM12.4 million.

Tan said these numbers are reflected in the company’s stock price performance, which has been steadily climbing in the last five years, from less than 35 sen to close at RM1.03 yesterday, giving it a market capitalisation of RM191.1 million.

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