KUALA LUMPUR: Crest Builder Holdings Bhd is looking to sell its Tierra Crest office block in Kelana Jaya to pare down debts.
“We are in talks with several parties on our asset monetisation exercise. Tierra Crest, which has a book value of RM158 million, is 90 per cent tenanted,” said managing director Eric Yong.
While Crest Builder's gearing of 1.7 times is high, Yong assured that the group has adequate cashflow to carry out two big projects with the government.
“Yes, we are looking to sell one of our assets but we’re not in a dire situation either. We are staggering our development projects,” Yong told reporters after the company's shareholders meeting held here today.
“We have started with Latitud8 this year. We will only undertake construction works of the Lembaga Getah Malaysia (LGM) development at Jalan Ampang, next year,” he said.
“We have the funding requirements for 2016. We are good for the next 18 months. Our unbilled construction orderbook of RM1.2 billion will keep us in good stead,” he said.
In shedding more light on Crest Builder's gearing, Yong highlighted that the group’s RM510 million sukuk is self sustaining. Bondholders are assured that the Islamic facility is being serviced with the group’s yearly concession income of RM43 million from Universiti Teknologi Mara (UiTM) campus in Tapah, Perak.
Latitud8 is the first transit-oriented development that is being spearheaded by government linked company Prasarana Malaysia Bhd with Crest Builder. Located just above the Dang Wangi underground LRT station, Latitud8 is a 45-storey mixed-use tower.
It comprises a lifestyle retail podium with business and convention facilities, open office spaces, SOFO (small office flexible office) suites, SOHO (small office home office) residences, duplexes as well as a rooftop lounge and bar.
This marks a new trend of the government creating vibrant and livable communities that are centred around public transport.
Under this public private partnership, landowner Prasarana is entitled to 21.2 per cent of the RM1.16 billion gross development value (GDV) of Latitud8, including land cost.
“Demolition of the existing structure above the Dang Wangi LRT station and work on the foundation of the new structure is underway. Super structure works will go on full swing by year end,” he said.
“Sale of Latitud8’s office and residential space is scheduled for September 2016. Construction earnings of this project should start contributing to our bottomline from 2017,” he added.
The other public private partnership project Crest Builder is undertaking with the government is the Galleria.
Sited opposite Great Eastern Mall and next to Gleneagles Hospital, Galleria is being developed with LGM. It will consist a corporate tower and three other blocks of apartments and medical suites.
LGM, as the joint venture partner, will receive a total payout of 22.5 per cent of the RM1.33 billion GDV by way of cash payment and barter.