“Based on past reports, the landbank of Felda that has been earmarked for development includes 22 acres in Kuala Lumpur. This land currently houses the Balai Felda, Wisma Felda and Anjung Felda buildings, and a handful of other surrounding buildings Felda owns and has been using for over four decades. It was previously reported that Felda intends to redevelop the site, which is outlined by Jalan Semarak, Jalan Maktab and Jalan Gurney in Kuala Lumpur.”
Encorp into full-fledged property development
DESPITE seeing its earnings dip significantly for its financial year ended Dec 31, 2014 (FY14), Encorp Bhd is seeking to put its house in order by taking steps to downsize its troubled construction unit and moving into full-fledged property development status.
And in this regard, the prospects look interesting. chairman Tan Sri Mohd Isa Abdul Samad (pic) says the company has the opportunity to leverage on a sizeable landbank located in prime areas across Malaysia – owned by the Federal Land Development Authority (Felda) – ready to be unlocked. Isa, who is also the chairman of Felda, said this in an e-mail reply to questions from StarBizWeek.
Felda is the ultimate parent company of Encorp’s single-largest shareholder, Felda Investment Corp (FIC), which owns 70.97% of Encorp.
FIC emerged as a shareholder in Encorp last May.
Isa says that Encorp is confident of securing joint ventures with Felda in developing the landbank.
“The identified landbank is located in key urban areas in Selangor, Malacca and Johor, with a potential land size of over 1,000 acres. We are looking forward to making an announcement in the next few months,” he says.
Industry players say the collaboration between the two parties could be in the form where Encorp is roped in as the master developer of Felda’s land.
Based on past reports, the landbank of Felda that has been earmarked for development includes 22 acres in Kuala Lumpur. This land currently houses the Balai Felda, Wisma Felda and Anjung Felda buildings, and a handful of other surrounding buildings Felda owns and has been using for over four decades. It was previously reported that Felda intends to redevelop the site, which is outlined by Jalan Semarak, Jalan Maktab and Jalan Gurney in Kuala Lumpur.
Outside Kuala Lumpur, two other Felda sites poised for development include 600 acres in Bukit Katil, Malacca, and 2,000 acres in Pengerang, Johor. Bukit Katil is a growing suburb in Malacca that is catching up on urbanisation, while the catalyst for growth in Pengerang is Petronas’ RM60bil Refinery and Petrochemicals Integrated Development, or Rapid, project.
Aside from the Felda landbank, Encorp itself has an existing landbank that would keep it busy for the medium term. According to Isa, the remaining phases of Encorp Cahaya Alam at Shah Alam are slated to be launched in 2015 till 2017. These remaining phases have a gross development value (GDV) of about RM700mil.
Encorp Cahaya Alam is a residential project comprising linked and semi-detached houses, shop-offices, apartments and flats, spanning 210 acres in Shah Alam with an estimated total GDV of RM1.1bil.
Its commercial development is the Encorp Strand Mall, in Kota Damansara, Selangor, that was opened last year. The mall is part of the RM1.4bil Encorp Strand – a mixed-development project made up of business suites, garden offices and serviced residences. Outside Malaysia, Encorp also has a property project in Perth, Australia.
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Isa says in the past three years, Encorp ventured into the construction sector as a general contractor and this had not paid off.
“After some valuable lessons learned, such as an ineffective expansion strategy, shortage of skilled and capable personnel, and an increase in building material cost and supply, we realise that this is not an area Encorp can substantially participate in.”
This aside, the company is also on the lookout for a strategic landbank, strengthening product development and building its current order book.
Encorp has been without a chief executive since Yeoh Soo Ann retired in June last year. Yeoh had sold out of Encorp after the company was taken over by FIC. Encorp chief operating officer Mohd Ibrahim Masrukin was then made acting CEO, but tendered his resignation in September last year.
Pending a new man at the helm, Encorp is being run by an executive committee chaired by Datuk Zakaria Nordin, who is also an Encorp director. Zakaria is the assemblyman of Ampangan, Negri Sembilan, and has been involved in the construction industry since 1980.
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Before the management buyout by Yeoh and Mohd Ibrahim in mid-2013, Encorp was controlled by Sarawak politician Tan Sri Effendi Norwawi.
Read the full report here.
