WCT: Earnings from investment and management to double

by **Cals** Wed 12 Feb 2014, 08:40

Published: Wednesday February 12, 2014 MYT 12:00:00 AM
Updated: Wednesday February 12, 2014 MYT 6:43:33 AM
WCT: Earnings from investment and management to double
BY NG BEI SHAN
SHAH ALAM: With the number of shopping malls and hotels expanding under its belt,WCT Holdings Bhd expects earnings from its investment and management segment to grow 30% to 35% in 2018 from 15% currently.
Speaking to reporters after the company’s EGM yesterday, WCT’s director Kenny Wong said that would strengthen its recurring income as the construction sector was considered cyclical.
Notably, share price of the counter had taken a beating since last November, falling some 17% to RM2.04 on Monday.
An analyst said the drop in share price was due to the slower-than-expected orderbook replenishment and the delay in opening of Kuala Lumpur International Airport 2 (KLIA 2).
Currently, its construction arm attributes for more than half of the group’s bottomline, property development contributes about 30% while property investment and management about 15%.
Its growing property investment holdings would present an opportunity for it to list the assets separately as a real estate investment trust (REIT) as its net lettable area (NLA) grew to 5 million sq ft as projected in 2018, Wong said.
Currently, it has a total NLA of 1.7 million sq ft from Paradigm Mall in Petaling Jaya and Bukit Tinggi Shopping Centre in Klang.
Chairman Datuk Ahmad Sufian noted that the group would consider having a REIT if the yield for its malls was attractive. He acknowledged, at the same time, the intense competition in the retail mall segment.
He also said the redevelopment project of Kemayan City in Johor was slated to begin n mid-2016.
This will add 1.2 million sq ft to its exsiting NLA.
Also in its pipeline is Paradigm KL in Overseas Union Garden, Kuala Lumpur. The analyst said a near-term catalyst for the company would be winning contracts for civil and infrastructure work at the former Rubber Research Institute (RRI) land.
Wong said it would “do its part and put a good bid” for the civil works there and looked forward to participating in the property development due to the viability of the location.