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Tanco is stepping up its game in terms of real estate development and land reclamation

Published: Tuesday, 28 September 2021
An artist’s impression of Kuantan Hotel Suites. File image

Tanco Holdings Bhd, known for projects such as Bandar Country Homes in Rawang and Duta Vista in Damansara is upping the ante in terms of property development and construction to boost its performance.

The company is expected to commence construction on a boutique hotel in Pahang this year, according to its latest annual report.

The 20-storey hotel, known as Kuantan Hotel Suites has 365 rooms and suites fronting Beserah beach, just 15 minutes from Kuantan.

The company, which has been in the red for several consecutive quarters, had been planning to develop it for several years now.

Tanco is principally involved in the property development, tourism, leisure, and entertainment businesses.

Based on its website, its current project is Splash Park in Port Dickson, Negeri Sembilan.

Splash Park is a water theme park, hotel and serviced apartment project in Dickson Bay, which in turn is a 160-hectare sea-fronting integrated resort development located along Jalan Pantai in Mukim Pasir Panjang.

Dickson Bay has an estimated total gross development value of RM13.4 billion and is expected to be developed in various phases over 10 years.

It will be the largest integrated resort in Port Dickson, with several themed attractions which include an 18-hole golf course, STEM EduPark, wellness zone, spa village, hotels and service suites, retirement village, retail, and entertainment facilities.

Meanwhile, Tanco has received a letter of award (LoA) for the proposed reclamation of land in Melaka.

The LoA was awarded by Onine Alliance (M) Sdn Bhd (OAMSB) to Tanco's indirect wholly-owned subsidiary Tanco Builders Sdn Bhd (TBSB), according to a stock exchange filing last week.

The land, measuring a total of 48.6 hectares (ha) is located at Mukim Tanjung Kling, Daerah Melaka Tengah, which is ancillary to the operation of Tanjung Bruas port, a joint venture between OAMSB and Kumpulan Melaka Bhd (KMB).

OAMSB is entitled to reclaim and sell the reclaimed land, which has been assigned for port operation usage and maritime and petrochemical industry, under an agreement between the company and KMB.

Tanco said the rationale of the LoA is to provide the company and its subsidiaries with an alternate revenue source by tapping into the construction sector, given the general economic slowdown due to the Covid-19 pandemic.

In a reply to a query by Bursa Malaysia dated September 23, Tanco said that TBSB will engage two qualified and experienced parties to jointly undertake the reclamation works in Melaka, the details of which, will be announced in due course.

Tanco also said that the cost of reclamation work shall be borne by OAMSB.

"TBSB will undertake the reclamation works and will be paid by OAMSB based on the specific payment schedule to be agreed upon in the definitive contract subsequent to the LoA," it said.

Tanco noted that the contract sum for the works to be undertaken by TBSB is RM99.47 million, and the terms will be set out by the Melaka state government.

Tanco said Phase 1 is expected to be completed within two years from the project commencement date, with the entire project to be completed in three years.

Of the total land area, 12.14ha (Phase 1) will be the operating area of Tanjung Bruas Port, and 36.5ha (Phase 2) is for development to be offered to buyers in the maritime and petrochemical industries suitable per the zoning of Melaka Waterfront Economic Zone.

The date of commencement of the works will be on the day of satisfaction of the due diligence findings, according to Tanco.

Tanco said a maximum sum of RM73.19 million only (advance payment) shall be paid by TBSB to the recipients as OAMSB may direct in writing.

"Combining the contract sum and advance payment, the total consideration under the LOA would amount to RM172.66 million," it said.

Tanco said that TBSB and OAMSB will enter into a definitive agreement for the Melaka project in due course.

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