Wearnes to beef up property play
The Business Times Weekends
Saturday, 3 October 2009
Diversified WBL Corp, better known for its technology and motor businesses, has identified property development as a core activity with vast growth potential.
In a rare roadshow on Thursday, chief executive Tan Choon Seng said property would become a ‘very important’ part of the group’s four core divisions.
WBL, also known as Wearnes, used to lump its property interests under 'Others', but it is now looking to build up this portfolio, located mainly in China.
The group has built 28 developments totalling 2.32 million sq m in China over the past two decades.
Last November, it secured approval to convert a theme park it had in Chengdu into a high-end landed residential development. The 319,000 sq m project, to be launched on Oct 18, is expected to be ready by 2014.
In Shenyang, WBL is converting another theme park into a mixed development of high-rises. The 316,000 sq m plot will have office blocks, apartments and a shopping mall. The development is due to be completed in 2017.
The group has a development land bank of around 800,000 sq m in China, and another 93,000 sq m in Singapore and Malaysia.
In addition, WBL owns 75% of a sand-mining quarry just outside Brisbane, Australia, that spans nearly 10 million sq m. The sand is expected to run out in 2016, after which the plot could be converted to other uses.
Property, which has accounted for less than 10% of group revenue, is poised for growth, said Mr Tan. Nevertheless, he noted that this division would not be expanded at the expense of others.
'At this moment, we still like what we have,' he said.
He said the technology division, which accounts for 60% of group revenue, was well-placed to exploit the proliferation of smart phones and netbooks.
This is because the group – through units M-Flex and MFS – is a major supplier of printed circuit boards (PCBs). In fact, it is the world’s No. 3 supplier of flexible PCBs.
Through its automotive arm, Wearnes sells and services Volvo, Jaguar, Bentley and Renault cars in Singapore. In the region, it has other franchises, such as Volkswagen, Mazda and Bugatti.
'Many people see the automotive industry as a sunset industry,' Mr Tan said. ‘We see it as a sunrise industry. We are looking for new acquisitions, but obviously, we can’t talk about them just yet.’
Even so, Wearnes is looking to ‘unlock the value’ of its Singapore motor premises, including the 16,500 sq m plot occupied by Jaguar/Bentley agent Malayan Motors. Mr Tan noted that there was scope for increasing the built-up area.
The group’s last core division – engineering and distribution – currently caters to high-tech applications in the health-care and security industries.
Mr Tan said this division would become ‘very different’ over the next five years, but did not elaborate. He added that Wearnes had 'no fanciful strategy'. 'Our mantra is: Watch your business fundamentals and look after your customers.'
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Originally Posted by The Business Times
