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Home / 2010 Annual Report: Managing Director’s Message

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Message from the Managing Director

Over the years, Tambun Indah has carved a niche in introducing innovative properties in Mainland Penang.

Tambun Indah has become renowned for pioneering a number of new property concepts in Mainland Penang, which include the first gated community of Taman Tambun Indah in 1995, and the first landed strata scheme property called Palm Villas in 2007.

In addition to our continuous innovation, we have always kept to our principle of providing luxurious and high-quality properties at affordable prices.

Because of these values, our property projects have enjoyed high, if not full take-up rates – a glowing testament of our customers’ trust in us. Furthermore, our properties have historically enjoyed premium prices in the secondary market.

FY2010 OPERATIONS REVIEW

The year under review was indeed a busy year for Tambun Indah. We sold properties worth total gross value of RM137.1 million, versus RM98.8 million in FY2009. We also recognized property sales of RM128.1 million, with pipeline sales of RM196.3 million yet to be recognized.

The year under review saw Tambun Indah Group strengthening its track record with the completion of two more projects, namely Casa Permai and Seri Palma, bringing the Group’s portfolio to 9 completed projects since inception.

• Casa Permai Our Casa Permai project spans 7.12 acres and consists of a total of 86 residence units, comprising 36 doublestorey terrace houses, 18 three-storey terrace houses, 26 double-storey semi-detached house and 6 bungalows. Located in Simpang Ampat, Mainland Penang, Casa Permai is just a minute drive from the Bukit Tambun Toll and North-South Highway, and 10 minutes drive from the first Penang Bridge and Bukit Mertajam. Residents enjoy easy access to public amenities of schools, restaurants, banks and recreational facilities, including a golf course and Batu Kawan stadium.

The project commenced in 2008 and was completed in 2010 with a GDV of RM26.78 million. I’m pleased to note that the project sales have been fully taken-up to date.

• Seri Palma The Seri Palma mixed development, encompassing a 0.96-acre land area, comprises 6 units of double storey semi-detached houses and 3 units of double storey shop offices in Butterworth, Penang.

The development commenced in 2009 and finished in 2010 with GDV of RM4.60 million. Like our past projects, sales of Seri Palma have been fully taken-up to date.

GROWTH STRATEGIES

The property sector in Mainland Penang is anticipated to see favourable prospects. The expansion of the Penang Science Park near Simpang Ampat, and multi-billion-Ringgit investments on capacity development by corporations such as Ibiden Japan, Honeywell and Rubycon would attract a larger pool of workers, therefore stimulating demand for residential properties in the vicinity.

Moreover, the increased Government spending on infrastructure such as the Penang Second Bridge, and the provision of public convenience services such as Bridge Express Shuttle Transit (BEST Bus) – a park-and-ride free shuttle bus service between Seberang Perai and the Bayan Lepas Free Industrial Zone – would enable greater accessibility between Mainland Penang and the island, thus making it viable for residents to work on the island while enjoying favourable property prices on the Mainland.

In any case, the rising property prices on Penang island are anticipated to enhance the attractiveness of lifestyle properties in the Mainland due to their affordability.

These factors point toward a brighter future for Tambun Indah in the coming years.

Cognizant of the positive industry prospects ahead, the Group has outlined 3 strategies to reinforce our position as a leading property developer in Penang.

(i) Strengthen our track record with ongoing projects

FY2011 will see Tambun Indah steadily developing a number of projects that would bear fruit in the current financial year and beyond.

• Juru Heights The development of Juru Heights represents the Group’s staunch commitment to build vibrant townships in Mainland Penang. Comprising gated and guarded residences next to Juru Auto City, Phase I was completed in 2009, while we are currently embarking on the development of double-storey bungalows under Phase 2, with GDV of RM79.53 million. Upon completion of Phase 2 in 2011, Juru Heights would span a total land area of 81.25 acres, with GDV of RM255.12 million.

Given the positive feedback from Phase I as well as the strategic location of Juru Heights – within close proximity from Prai Industrial Estate and easy accessibility via the North-South Highway, the first and second Penang bridge – we are optimistic that Juru Heights would be another showcase development for Tambun Indah. In fact, to date, Juru Heights has a 99.1% take-up rate with gross sales value of RM255.12 million.

• Pearl Garden & Pearl Villas Our most ambitious project, which we commenced in 2009, is Pearl Garden in Simpang Ampat. A gated and guarded development, Pearl Garden is an eco-sanctuary with wide open spaces. In addition to an exclusive clubhouse with the gymnasium overlooking the swimming pool, we have also incorporated a jogging track that connects right to the residents’ homes.

The Group had previously launched Phases A1A, A1B and A2 in 4th quarter 2009 and 2010 respectively, which had witnessed overwhelming response from the public.

Encouraged by this, FY2011 will see the Group embarking on Pearl Villas Phases 1 and 2 with GDV of RM137.9 million. With its unique positioning as an eco-friendly luxury residences, we believe that Pearl Garden and Pearl Villas will meet the increasing demand for high-quality residences in Penang. Currently, Pearl Garden has a 91.3% take-up rate with gross sales value of RM139.12 million.

Other projects Some of the Group’s other development projects going forward are:

  • Carissa Park – A 144 unit-apartment block in Bagan Lallang, Butterworth, which commenced in 2009 and is targeted for completion in end-2011 with GDV of RM25.93 million.

  • Impian Residence – 100 units of double-storey terraces and 32 units of double-storey semide tached hous es in Alma, Bukit Mertajam. Impian Residences spans 10.09 acres and will have GDV of RM40.82 million upon completion in 2012.

  • Dahlia Park – A gated 134-unit condominium block and 12 units of double-storey shop houses on a 2.23 acre land. Dahlia Park offers residents luxury and exclusivity, with 10 units per floor, and residents on higher floors basking in the sea view. Residents can also enjoy its full facilities, including the gymnasium, outdoor swimming pool, multi-purpose hall, and security features. Dahlia Park is slated for completion in 2013, with GDV of RM45.14 million.

  • Tanjung Heights – 148 units of condominiums and 17 units of shop offices in Butterworth. It has an estimated GDV of RM52.16 million upon completion in 2013.

  • BM Residence – Total of 148 residential housing units comprising condominiums, semi-detached houses, bungalows and three-storey terrace houses. BM Residence is scheduled to be completed in 2014 with GDV of RM39.25 million.

Together with other pipeline projects slated for coming years, Tambun Indah has a GDV exceeding RM1.6 billion till 2016. We believe this places us in good stead to continue making a significant impact in Penang.

(ii) Expand our land bank

We are constantly on the lookout to increase our land bank, and believe in purchasing quality land over quantity.

It has always been our strategy to maintain an optimal land bank size that allows for quick turnaround. To this end, we ensure our land purchases are quickly followed up with development plans so as to achieve shorter time-to-market. This strategy enables us to use our working capital efficiently as we enjoy savings in finance costs and maximise returns while maintaining a healthy cash flow.

At present, we have a land bank of 215 acres in Penang, and upon completion of proposed acquisition of Pridaman, Ikhtiar Bitara and proposed Iand acquisition by Palmington, the land bank of the Group will increase to 754 acres, which will last the Group till 2021.

At the same time, we are actively seeking opportunities to expand our landbank beyond Penang to broaden the scope of our operations for the long term.

(iii) Continue creating high visibility for our projects

As has been the case in the past, we would continue to reach out to potential buyers through active participation of property fairs, promotional initiatives via billboards, newspaper advertisements and printed collateral.

This integrated marketing strategy would create top-of-mind awareness of our projects so as to reiterate our position as the developer of choice for high-quality yet affordable properties for our customers.

CONCLUSION

Backed by our excellent track record and strong financial position, we believe that Tambun Indah stands in good stead to tap into the tremendous potential in the Penang property market in FY2011.

We look forward to the continued support of our stakeholders as we strive towards reaching our vision of being a responsible regional developer.

Ir. Teh Kiak Seng