Eastern & Oriental Bhd (E&O) aims to launch RM1.3 billion worth of properties this year, although the property market remains subdued, says its managing director Kok Tuck Cheong.
Kok said the group will remain focused on selling its Conlay serviced residences that is located in Kuala Lumpur City Centre.
"We are currently previewing the first phase of 297 units and have garnered interest from both the local and international market," said Kok in a Bursa filing yesterday.
This iconic development with a GDV of RM968 million marks E&O's second joint venture residential development with Mitsui Fudosan Group (Mitsui), Japan’s largest real estate developer.
"Our successful partnership with Mitsui was further cemented with the signing of a third joint venture in December 2019, a testament of the confidence that the E&O brand garners," said Kok.
This third partnership is to develop 1.58ha of freehold land in the most prime and elevated parcel of land in Damansara Heights. Comprising low rise condo-villas totalling 54 units with a GDV of RM348 million, the development is slated for launch in the second half of 2020.
E&O announced its financial results for the nine months ended 31 December 2019 (9MFY20), recording total revenue of RM390.6 million, down 38.6 per cent from RM636.3 million posted in the nine months ended 31 December 2018 (9MFY19).
Net profit for the cumulative nine months (9MFY20) fell by 65.9 per cent to RM8.09 million from RM23.7 million in 9MFY19.
The property segment recorded a revenue of RM339.4 million in 9MFY20 as versus to RM569.5 million a year ago. E&O said revenue fell by 40.4 per cent as there was lower revenue recognition from development projects like The Tamarind and the Ariza Seafront Terraces in Seri Tanjung Pinang 1, Penang.
The Tamarind and the Ariza Seafront Terraces were completed in the previous financial year, said E&O.
E&O's three joint venture projects, namely Avira in Medini Iskandar and The Mews and Conlay in Kuala Lumpur contributed a total revenue of RM67.5 million in the period under review, which was comparable to the total revenue of RM67.6 million achieved in the same period a year ago.
The hospitality segment also recorded lower revenue of RM47.3 million for 9MFY20, down 27.1 per cent from RM64.9 million a year ago. This was mainly because the Heritage Wing of E&O Hotel in Penang was temporarily closed from March to December last year to make way for refurbishment.
Kok said E&O is proud of the re-opening of the refurbished Heritage Wing of the E&O Hotel.
"Conserving the legacy of this heritage icon, the refreshed suites and new F&B outlets have resulted in higher occupancy levels and increased average room rates," he said.