TA Enterprise plans to buy one hotel a year

KUALA LUMPUR: Stockbroking and property development group TA Enterprise Bhd intends to continue its hotel-buying spree, expecting to acquire at least one hotel property a year over the next two to three years

TA Enterprise managing director and chief executive officer Datin Alicia Tiah said on July 31 the group also plans to build two hotels in Kuala Lumpur.

Having only completed the purchase of two overseas hotels - The Westin Melbourne in Australia and Coast Whistler in Canada - the company drew attention on Monday for announcing a proposal to acquire the four-star hotel Swissotel Merchant Court Singapore. Before December, TA's hotel portfolio consisted only one hotel, the Radisson Plaza in Sydney, Australia.

Speaking to reporters after the AGM and EGM, Tiah said the company would launch property development projects worth more than RM2 billion in the next calendar year.

The new projects will include the first phase of the mixed commercial development in Sri Damansara with gross development value (GDV) of more than RM3 billion; a boutique residential development at Jalan U-Thant with a GDV of RM110 million and a condominium at Dutamas with GDV of RM300 million.

TA's current total undeveloped land bank of 1,000 acres was expected to last the group for the next 10 years.

For the current financial year, Tiah expects the earnings contribution to be 50:50 from property development versus financial services including brokerage and lending.

For its financial year ended Jan 31, 2009 (FY09), its financial services income shrank to 25% of net profit versus 75% from property development.

In total, TA's group consolidated net profit for FY09 fell 59% to RM92.3 million with revenue remained largely unchanged, falling only 2% to RM535.4 million.

The broking division saw net operating profit shrink by 75% to RM39.2 million due to lackluster performance and thin trading volumes on Bursa Malaysia, which saw net brokerage and commission income dropping sharply.

TA's group's property development division posted a 144.4% increase in net operating profit to RM165 million, which was 4.2 times that of the stock broking division.

Stock broking earnings were expected to recover to post earnings on par with the property division this financial year, "if market momentum maintains like this," Tiah said.

The group's property division, TA Global Bhd is expected to go for listing by October or early-November this year.

Property projects slated for launch beyond 2010 were mixed commercial developments in Bukit Bintang with GDV of RM1.3 billion for 2012, a project opposite the Kuala Lumpur Convention Centre worth GDV of RM1.2 billion for 2011, and the other phases of the RM3bil development in Sri Damansara that should run for a period of seven to 10 years.