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Home / 2011 Annual Report: Managing Director’s Message

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The global headwinds impacted the Malaysian economy in 2011, resulting in a dip in gross domestic product (GDP) growth to 5.1% from 7.2% in 2010, according to the Malaysian Institute of Economic Research (MIER).

Nevertheless, the domestic property sector remained largely resilient, spurred by continued economic development and the steadily-growing population.

In Penang, the rising local and foreign investments became major pull factors in attracting more skilled workers and expatriates into the state. This not only resulted in the growing affluence of the community at large, but also in pushing up property prices, particularly in land-scarce Penang Island. Consequently, more people began to seek out more affordable high-quality property alternatives in Mainland Penang.

As most of our developments are on the Mainland, Tambun Indah has benefited from this positive trend, which has translated into healthy sales for the Group in the year under review.

Operations Review

In FY2011, Tambun Indah’s property sales more than doubled to 912 units sold – with a total sales value of RM347.3 million – from only 396 units worth RM137.1 million in FY2010.

Significantly, more than 67% of the units sold came from new launches in 2011, indicating buyers’ continued acceptance of our product offerings.

The Group undertook 10 projects in FY2011, with an estimated total GDV of RM629.3 million.

 

  • Simpang Ampat

Our flagship development of Pearl City, located in Simpang Ampat, is also Mainland Penang’s first integrated city.With an estimated total GDV of RM2.9 billion, it is the largest mixed development project that the Group has undertaken to date.

Pearl City lies in a fast-growing development, with more than 12 industrial parks within a 15km radius, and close proximity to existing and upcoming transportation networks, including the Second Penang Bridge, and the electrified double track commuter train. We believe that its strategic location is a major attraction for those looking to live there or to access its facilities.

The Group launched and developed 3 projects in Pearl City in the year under review, namely Pearl Garden – consisting of two-storey bungalows, semi-Ds and terraces; Pearl Villas – featuring two-storey bungalows, semi-Ds and terraces; and Pearl Square – with its two-storey shop offices. Both Pearl Garden & Pearl Villas are landed strata schemes with security systems and community-living facilities in place.

We are pleased that these projects have done well. Pearl Garden, which was launched in November 2009, has seen 96% take-up rate as at end-March 2012, while Pearl Villas and Pearl Square – which were launched in FY2011 – have recorded take-up rates of 80% and 68% respectively.

 

  • Butterworth

Butterworth,the principal town in Seberang Perai, is also the location of the Penang Port and the upcoming Penang Sentral integrated transportation hub. The Group had undertaken 5 projects in Butterworth in FY2011 to progress alongside the ongoing development.

In November 2009, we started our first high-rise project in Butterworth, namely Carissa Park, a 144-unit apartment block. As at end-March 2012, it has achieved 97% take-up rate.

Subsequently, in November 2010, we launched Dahlia Park, a condominium and two-storey shop offices mixed development, which has an estimated GDV of RM45.2 million. As of end-March 2012, it has seen an 86% take-up rate.

To maintain the momentum – and to meet growing demand – Tambun Indah launched three projects in FY2011, namely Tanjung Heights – a condominium and shop offices mixed development; Capri Park – an apartments and shop offices mixed development; and Kelisa Residence – a project comprising two-storey semi-Ds and an apartment block.

As at end-March 2012, the take-up rates for Tanjung Heights and Capri Park stood at 84% and 72% respectively. And although Kelisa Residence was only launched in November 2011, it registered strong take-up rate of 51% within five months; reflecting strong end-user appetites for quality properties.

 

  • Bukit Mertajam

To tap into the opportunities within Bukit Mertajam, Tambun Indah launched Impian Residence in November 2010. The development, with GDV of RM43.7 million, consists of 32 two-storey semi-Ds and 100 two-storey terraces homes. As of 31 March 2012, about 85% of the units have been taken-up.

 

  • Juru

In May 2011, the Group launched the Juru Industrial Park development, consisting of 22 industrial factory units with a total estimated GDV of RM35.8 million. More than 86% of the units have been taken up for a total property sales value of RM30.4 million.

Given that Juru is currently surrounded by mature industrial parks like the Perai Industrial Estate and the Penang Science Park,we believe that the development of our Juru Industrial Park is timely and in line with increasingly-demanding requirements of emerging enterprises.

Growth Strategies

We at Tambun Indah are buoyant of the Group’s future outlook, in light of the growing pull factors of Mainland Penang properties, unabated investment trend, and the Government’s pro-business policies to bring about economic vibrancy in the state.

Therefore, the Group will remain steadfast in developing our current projects to completion, as well as launch new projects to tap into the opportunities in the Penang property market.

Pearl City, of course, will remain the catalyst for our long-term growth. In addition to launching other residential phases, we are also committed to developing Pearl City Business Park, a 107-acre commercial centre that aims to cater to the growing demand for entertainment, lifestyle, healthcare and educational choices.

To this end, our subsidiary Palmington Sdn Bhd had recently inked a Memorandum of Understanding (MOU) with education provider SIS Charter Sdn Bhd to develop a Straits International School campus within Pearl City Business Park. The international school – also the first in Mainland Penang – aims to offer Cambridge international curricula to school-going children between the ages of seven and 16, and is targeted to handle between 800 to 1,200 students when it opens its doors in 2014.

Our vision is to have a fully-integrated commercial centre in Pearl City, with facilities like retail outlets, hypermarkets, hotel, hospital, alfresco dining and other operators for the enjoyment of the residents of Pearl City and the surrounding vicinities.

Further to that, the Group would continue to expand our land bank to create new pockets of growth and sustain our operations for the long term. The Group currently has a total land bank size of 753.7 acres in Penang, mostly on the Mainland, that is expected to last us until 2020.

Conclusion

The strategies highlighted above, together with our strong fundamentals and attractive developments, reflect the optimism that Tambun Indah will be able to tap into the tremendous potential in the Penang property sector in the coming years.

With your continued support, valued shareholders, we can fulfil our target of becoming a strong property developer in the domestic market.

Thank you.

Ir. Teh Kiak Seng

Managing Director