Jaks Resources says no plans to exit property biz

PETALING JAYA: JAKS Resources Bhd, which is looking to divest its Evolve Concept Mall near Ara Damansara, Selangor, said the group currently has no plans to withdraw from its loss-making property development segment after the completion of its ongoing Pacific Star project.
“At this juncture, we should not be so optimistic about the market until we can see a clearer dynamic in this property (segment) for a niche player (like us),” its senior general manager for corporate strategy Steven Ang Si Eeng told reporters after its AGM yesterday.
“For now, let us complete our project first and think about how to move forward,” he added.
Ang said the group currently owns 14.8 acres of undeveloped landbank in USJ, Subang Jaya. At the moment, the management has not decided whether to develop the land or to dispose it, citing it will consider all options.
On plans to divest Evolve Concept Mall, Ang said the group remains in tact with its intention to monetise the asset at the right price, noting that discussions are still ongoing with several interested parties.
“The market today is very tough as shopping malls in the Klang Valley are mushrooming. You can challenge the planning (of developing the mall), but the planning was done eight to nine years ago, when during that time the area is still short of malls.
“But all of a sudden, everyone (other property players) is coming up with the same product, developing shopping malls, which has lead to excess supply,” he said.
The four-storey shopping mall, which was opened in late-2015, is currently about 70% occupied based on the net lettable area.
JAKS general manager, corporate strategy, Elaine Tai Kai Yin said given the oversupply situation where retail space is concerned, the group is trying its best to improve the mall’s occupancy rate.
“Generally, shopping malls will take some time to reach a certain stage where it will start to generate profit. However, we are trying our best to bring in the right tenants and drive more traffic here.
“Hopefully, with the opening of the (Ara Damansara) LRT station, it will make it easier for people to travel to the mall,” she said.
On its construction segment, which contributes the most to the group’s revenue, Ang said JAKS is currently tendering for jobs worth RM1.5 billion to RM2 billion.
He said the group’s unbilled order book as at end-March 2017 stood at RM2.6 billion, which will keep it busy for the next few years. Commenting on its financial performance this year, Ang said he expects the group’s strong momentum in the first quarter will continue for the remaining quarters, driven by its domestic construction project as well as Vietnam engineering, procurement and construction contract.
JAKS’s net profit jumped over seven times to RM7.5 million in the first quarter ended March 31, 2017 from RM1.07 million previously, underpinned by higher revenue from its construction division.