KUCHING: Property developer Titijaya Land Bhd (Titijaya) aims to increase the size of its property development projects by doubling its gross development value (GDV) in the next two years.
The research division of Kenanga Investment Bank Bhd (Kenanga Research) yesterday said Titijaya is looking to acquire more landbank to further construct more properties especially through joint ventures with other property developers to enhance its earnings.
Titijaya will be acquiring more land for property development projects in the Klang Valley and Penang as part of its strategy to double its total GDV in the next two years to RM14 billion, it noted.
Titijaya had recently entered into a sale and purchase agreement to acquire 8.26 hectare of land in Penang for RM126 million.
Given the company’s latest land acquisition, Kenanga Research expects the company to be more aggressive by acquiring more land in the future to supplement its property development.
Addtionally, Titijaya Group had earlier clinched a 70:30 per cent joint venture development with Bina Puri Holdings Bhd for a project in Brickfields, Kuala Lumpur.
Kenanga Research believed that Titijaya could potentially look for more property development through joint ventures as the partnership strategy creates a win-win situation for the company.
In the event that the company needs to raise funds for more landbank acquisition, the company’s healthy balance sheet which is in net cash position can fund the purchase together with borrowings.
In the meantime, Kenanga Research observed that Titijaya’s projects include residential development for instance double storey terrace houses in Cheras, Kuala Lumpur, residential lots and low-cost apartments in Klang, Selangor Darul Ehsan (Selangor), high-rise development project in Subang Jaya, Selangor, serviced apartments and serviced suites.
Moving on, the research firm said the company’s upcoming property projects are Subang Parkhomes Phase Two at Subang Jaya, Seri Alam Industrial Park at Klang, Selangor, Zone Innovation Park at Klang, Galleria at Klang, 3Elements at Seri Kembangan, H20 at Ara Damansara, Selangor and Embun at Kemensah, Kuala Lumpur.
Kenanga Research forecasted the property sales from those projects together with Titijaya’s unbilled property sales of RM550 million is expected to sustain its earnings over the next two years.
Hence, Kenanga Research is optimistic on Titijaya’s financial year 2014 (FY14) and FY15 earnings.