Kanger International Bhd (KIB), which is diversifying its business to include glove manufacturing has completed the development of AutoCity and a business hotel in China worth RM500 million collectively.
AutoCity and the hotel, known as Kyriad Hotel, are located within the Ganzhou Economic and Technological Development Zone in Ganzhou city.
KIB executive director Joseph Wu said the completion of the two buildings marks a significant milestone in its quest to establish a stable and recurring income base for the group.
"Moving forward KIB will recognise additional income for the two properties which have secured long term leases," he told NST Property.
In March KIB announced that it had secured 10-year lease agreements for AutoCity, a purpose-built six-storey building with a net lettable area (NLA) of 493,062 sq ft, and the 19-storey hotel with a build-up of 190,715 sq ft.
KIB said that the initial rental income per year for the two buildings collectively is RM11.1 million. The rental income will grow further in later years with the scheduled rent increases in the agreements.
AutoCity is leased to Ganzhou Jiache Automobile Trading Co Ltd commencing from April for RM8 million a year, while the hotel is leased to Ganzhou Fuying Kaili Hotel Management Co Ltd for RM3.1 million a year from May.
"We are glad to have Kyriad with us as the brand is internationally recognised," added Wu.
Kyriad is a brand owned by the Louvre Hotels Group. The other brands of the group include Royal Tulip, Golden Tulip, Campanile, Kyriad Direct, Tulip Inn, and Première Classe.
KIB diversified into property investment and management to reduce its sole reliance on making bamboo wood products. It is also working to set up a glove manufacturing plant in the first half of next year to expand its income base.
The group will invest RM77 million to set up the plant in Ijok, Selangor, and produce at least one billion pieces of gloves per annum.
Wu has said the group is targeting to start full production in the first quarter of 2021 as there are pipeline orders in the Middle East.