TAGB ... Jul11

TA Global’s overseas properties have a gross development value (GDV) of RM1.94 billion (Australia) and RM631 million (Canada). The launch of the property in Canada is in July and September 2011 for Australia. The RM208 million Azelia Residence at Damansara Avenue, launched in April, will be accounted for in FY12.

TA Global is also poised to launch its Dutamas property, pending approvals from the authorities.

The majority of its domestic and foreign business hotels yield good contributions to the company, with the exception of one resort hotel in Canada reporting lower yields due to seasonal variation.

TA Global currently receives income from three sources: hotel operations, investment properties and rental income.

TA Global’s strategy is to have steady income from hotels and properties that are held for investment and recurring income.

Despite being asset rich, earnings delivery has been rather slow for TA Global, especially in property development for FY2011 ended Jan 31.

However, the lull in its property development division could start to revise in FY2012 and gather pace from FY2013, with the group starting to line up some major projects for launch, tapping its total outstanding GDV of about rm8.71 billion.

These projects are Damnasara Avenue; TA 3&$ opposite KLCC; Nova Square in Jln Imbi; Dutamas; Tmn Permata in Cheras; Little Bay in Australia; and Gardens in Canada.

Spread over a development period of 10 years, the projects could translate into annual revenue or property sales of about rm890 million, 10 times more than what TA Global’s property division generated per year over the last two years.

The huge potential GDV aside, it is also worth nothing that the bulk of these projects sits on land acquired years ago, which means low holding costs that could translate into lucrative margins.