Property development a new growth driver for Fiamma

PETALING JAYA: Fiamma Holdings Bhd property development business, which contributed 25% of total turnover, is seen as a new growth driver for the company given that it has over RM1 billion worth of property projects in the pipeline.
RHB Reseach said currently, its existing Centara project at Jalan Tuanku Abdul Rahman is slated for completion in October or November and 30% of the office suites at Menara Antara will be kept as property investment assets.
This would strengthen Fiamma's pool of rental income-generating assets in additional to the existing Wisma Fiamma building.
RHB Research said two service apartment project will be rolled out by end of 2014 including the RM600 million gross development value (GDV) high rise development at Jalan Yap Kwan Seng and the RM400 million VIDA residenz in Johor Bahru.
According the research firm, Fiamma will continue to grow the property development division and is constantly scouting for landbank targeted largely within the Klang Valley.
It said VIDA Residenz could be the only Johor project over the short term as the management holds a cautious stance over the Iskandar Malaysia market.
"Fiamma is currently in a RM54 million net cash position. We expect it to gear up gradually to 20-30% over the next two years in view of its upcoming slew of high-rise projects. Dividend payout should remain at about 30%, translating into a decent yield of almost 4%," it said.