TA Global delays major developments

By KEVIN WONG / Graphic By TMR

TA GLOBAL Bhd has delayed several property launches in Kuala Lumpur due to the challenging market environment.

The projects include the TA 3 and 4 on the apron of the Kuala Lumpur City Centre (KLCC), the annexe mixed development at Damansara Avenue in Bandar Sri Damansara and the Dutamas residential development.

CEO Tiah Joo Kim said the projects were meant to be launched this year, but the property market remains soft with concerns of oversupply of specific properties in the city centre.

“We do not want to launch all our projects at the same time as it will take up a lot of manpower and resources from a financial standpoint.

“In regard to TA 3 and 4, we have delayed the projects and will be relaunching them in the third quarter of next year (3Q19). We have recently completed the foundation and the basement works, but will be halting construction,” he said.

He added that the group hopes to achieve about 40% of sales for TA 3 and 4 after relaunching in 2019.

“We will resume construction as we have enough sales velocity to convince the bankers to finance the project. It may take about six months or so to achieve 30% to 40% of sales, and that is when we will resume construction. It will take about four years to be completed,” Tiah told reporters after the group’s AGM yesterday in Kuala Lumpur.

TA 3 and 4 have a combined gross development value (GDV) of RM2.8 billion and will feature a pair of twin towers — Tower 1 with 62 storeys and Tower 2 with 66 storeys above a 10-storey podium, which will comprise a five-star hotel and serviced apartments.

The development is located on a 2.47-acre (0.1ha) land within walking distance from Suria KLCC.

The launch of the Dutamas project has been postponed to the 1Q19.

Tiah said the project was slated to be launched this year, but has been delayed due to pending approvals.

“We figured that launching the project at the end of the year would not be a smart move.

“So, we decided to start the previewing at the end of this year, or early 2019, and launch it around the Chinese New Year as that would be a good time to launch,” he said.

The Dutamas project will comprise a 38-storey freehold high-end condominium development and a 25-storey tower housing 364 residential units on a 4.55-acre land.

TA Global’s Dutamas development project will have a GDV of RM450 million.

The group had launched the Ativo Suites development in Damansara Avenue, with 60% of buyers having signed the sale and purchase agreement.

Tiah expects to sell the remaining units by the end of this year.

He added that market conditions would determine if Ativo’s retail portion, the Annexe which has a GDV of RM2.5 billion, would be launched at the end of the year.

“If all our projects sell very well and the market is very ripe, we will get things done quicker,” he said, adding that the company is looking forward to achieving a better performance this year on the back of improved 1Q18 earnings.

TA Global’s earnings and sales recognition this year will be from the Little Bay Cove development in Australia.

Other future projects include the launch of the first phase of 142 units of two-storey terrace houses in Kluang, Johor, for 2Q19. This will have an estimated GDV of RM450 million.

Meanwhile, TA Securities Holdings Bhd research senior VP Kaladher Govindan said FTSE Bursa Malaysia KLCI could be dragged as low as 1,580 points or lower, should the US impose tariffs on an additional US$200 billion (RM806 billion) worth of Chinese imports.

He added that America’s move would encourage more fund outflow from regional markets, including Bursa Malaysia, but reaffirmed the research firm’s year-end target for the benchmark remain at 1,780 points based on a price-earnings ratio of 15.5 times.

“Our overview is that US President Donald Trump will stop after imposing tariff of US$50 billion worth of goods from China and would not proceed with the second tranche of tariffs on US$200 billion in Chinese imports,” he said.

Kaladher is confident the two largest economies will hold discussions over the issue after the first round of the tariffs is imposed and America would unlikely impose further tariffs.

“This is because the US economy has almost full employment, with the unemployment level standing at about 3.5% to 3.6%,” he said, adding that more tariffs imposed on China’s import could probably result in a recession in America by the end of 2019, as the country has no additional capacity for its own in-house production.

Kaladher added that the outflow of funds from the local market was not due to policy uncertainties under the new government.