KUALA LUMPUR: Asian Pac Holdings Bhd expects a recurring income boost by RM40 million to RM50 million annually from its Kota Kinabalu Times Square Phase II (Imago) by year-end.

Imago, developed by Syarikat Kapasi Sdn Bhd, a subsidiary of Asian Pac, is set to cater to a resident population of about 400,000.

“The KK project is by far the most important mixed commercial development in Sabah and Sarawak,” said Asian Pac chairman Tan Sri Megat Najmuddin Megat Khas.

“We are very optimistic we will do well in Sabah and going forward, we want to become a major player in the property industry,” he added.

KK Times Square II consists of a 15-acre retail mall, exterior shoplots and five blocks of 631 luxury apartments, with an expected construction cost of RM700 million.

“Currently, 50% of the project has been completed and the rental income from Imago is expected to post positive results for the group’s financial year ending March 31, 2013,” said Najmuddin.

He said 80% of the residential units from the first three blocks have been sold. Prices range from RM700,000 to RM2 million, with the majority taken up by locals and foreigners from Hong Kong, Singapore and Brunei.

The residential development has a total gross development value (GDV) of about RM600 million.

Najmuddin said the company will not sell any of the retail lots in Imago. It is keeping the units for investment gain and rental income.

Asian Pac has total unbilled sales of over RM800 million.

The four-storey shopping mall with a net retail space of about 800,000 sq ft, is the second phase of the KK project after the launch of its phase one, Signature Office, completed in 2007.

The company had cash and bank balances of RM129 million in the second quarter ended Sept 30, 2012, dropping from RM176.87 million as at March 31, 2012.

“Asian Pac is relatively undergeared and funding is not an issue for us. We have a gearing ratio of about 0.3 times,” said Najmuddin.

“For the year ending March 31, 2013, we expect the company to have favourable results because most of our construction and property developments are almost completed, hence we expect to churn in profit,” said Asian Pac group accountant YY Liew.

Asian Pac incurred a net loss of RM341,000 for the second quarter ended Sept 30 due to lower profit for KK Times Square 2 apartments and Dataran Larkin 1 shop/office and provision for doubtful debts.

“Another main contributor to the loss was because much of the construction was in progress and we had not reached the stage where we could take in as profit,” said Liew.



This article first appeared in The Edge Financial Daily, on February 5, 2013.