KSL Holdings
What sets KSL Holdings apart from most property developers in Malaysia is its growing recurring income base.
From 2011 to 2014, sales generated from property investment segment grew by a CAGR of 48.8% to RM158.0 million, representing approximately 20% of total sales. KSL intends to raise this figure to 30% within the next 3-5 years.
The company's cash cow is KSL City, an integrated commercial development in the city centre of Johor Bahru, comprising KSL City Mall and the five-star KSL Hotel & Resort.
Opened in December 2010, KSL City Mall has a total net lettable area (NLA) of 775,000 sq ft with over 90% occupancy rate. The adjacent 868-room hotel, which commenced operation in April 2012, recorded about 75% occupancy rate in 2014, up from 70% in 2013.
KSL's other investment properties include two Giant malls in Muar and Skudai.
For 1Q2015, its property investment segment contributed operating profit of RM24.4 million or about RM97.5 million annualised. Assuming a conservative 7% yield and expected net profit of RM73 million, its investment properties alone is worth an estimated RM1.04 billion.
With current market cap of RM1.61 billion, investors are paying only RM561 million for its property development business, plus in-house construction arm. The lowly-geared developer has a large landbank of 1,700 acres, most were acquired at low prices, mainly in Johor.
For 2014, the property development segment contributed sales and operating profit of RM643.1 million and RM272.8 million, respectively. Unbilled sales stood at RM1.02 billion at end-2014, providing 1.5 years of earnings visibility.
The developer's ongoing major projects include KSL Residences@Daya, D'Secret Garden at Taman Kempas Indah, and Taman Nusa Bestari in Johor Bahru. It ventured into the Klang Valley in 2008 with the acquisition of a 446.4-acre land in Klang. KSL would also build KSL City Mall 2 in the new township called Canary Garden@Bandar Bestari, which is slated to be Klang's largest mall with a gross floor area of 2 million sq ft.
