Ivory Properties says reclamation works for WorldCity project delayed to next year

GEORGE TOWN (Aug 26): The commencement of land reclamation works for the RM10 billion Penang WorldCity project in Bayan Mutiara is expected to begin only in the middle of next year.

The project is undertaken by Tropicana Ivory Sdn Bhd, a 55:45 joint venture between Tropicana Corp Bhd and Ivory Properties Group Bhd. Tropicana Ivory, according to a news report last year, had hoped to begin the reclamation works in the second quarter of 2016.

Ivory Properties chief operating officer Goh Chin Heng, however, said today there is a delay due to some technical issues, which have now been more or less settled.

"We are now waiting for approval from the state authorities, and we hope to get all the approvals in a matter of three to six months' time," said Goh.

"We will then proceed with another round of tenders to appoint the reclamation contractors. We will invite both local and foreign contractors for this.

"We estimate to kick off the reclamation works by mid-next year," he told reporters after Ivory Properties' annual general meeting.

The total size of the land area for the project is 126 acres, of which 65 acres is existing land and the remaining balance of 61 acres is to be reclaimed.

"We expect to start reclaiming 20 to 30 acres of land first. The whole reclamation process is expected to take three to five years to complete.

"The estimated cost for the reclamation [of the 61 acres of land] is about RM200 million, but this may vary from time to time" said Goh.

This would mark the first land reclamation exercise for the Penang-based property developer.

As for its existing 65 acres of land, the group has earmarked projects with a gross development value (GDV) of RM5 billion to RM6 billion within the next five years.

So far the group has utilised about 20% of its existing land for Phase 1 of Penang WorldCity's development comprising luxury residential condominium towers, Tropicana Bay Residences, which has a recorded GDV of RM933 million.

"So far the take up rate since the launch of Tropicana Bay three years ago is around 90%," said Goh.

The group also intends to complete its RM321 million The City Residence project in Tanjung Tokong by the end of the year.

As for its Penang Times Square project, the group intends to complete phase three (comprising residential suites The Wave) and phase four (comprising The Central Hotel) by 2020.

Both phases have a combined total GDV of RM970 million.

On the group's upcoming projects, Goh said the next focus is a proposed mixed development project on a six-acre land in the tourist belt of Batu Feringghi, which will kick off in mid-2017 with a GDV of about RM300 million.

Ivory Properties will also be making its mark out of Penang through a joint-venture project in Kuala Lumpur.

The group had in June penned an agreement with LLK Properties Sdn Bhd to develop the project, which will be a mixed development on approximately 1.8 acres of land located close to the Sungai Besi area with an estimated GDV of RM220 million.

"We are still finalising the pricing for the KL project. It will not be on the higher end but neither would it be affordable homes. But the pricing would be what's affordable for the KL market," said Goh.

According to the group's filing to Bursa Malaysia on June 17, LLK will be entitled to 27% of the fixed value, i.e. the total value of all units of the development.

Ivory Properties shares were unchanged at 40.5 sen at 4.41pm today, for a market capitalisation of RM198.48 million. — theedgemarkets.com

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