The Straits Trading Company (STC), like its property-focused peers, is “interested” in opportunities in Johor, says Eric Teng, group chief operating officer.
This is especially true after Singapore and Malaysia jointly launched the Johor-Singapore Special Economic Zone (JS-SEZ) in January.
However, Teng says he is “mindful” that there are “three-and-a-half governments” running the JS-SEZ. “The first government is Singapore. The second government is the Malaysian federal government and the Johor state government is the third.”
That leaves the “half-government”, which, according to Teng, is the Malaysian king Sultan Ibrahim Iskandar and his family. “There are a lot of dynamics there; it’s not exactly a Singapore place, per se. We’ll take our time, but we are definitely keen and we’ll see how it evolves because, territorially speaking, both countries are very close, but, of course, we cannot ignore that.”
Teng took several questions about STC’s plans and operations in Penang, which have evolved from resources to property, during the company’s FY2024 ended Dec 31, 2024 results briefing on March 7.
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STC is decommissioning its century-old tin smelter located in Butterworth in mainland Penang. This will be completed in 2H2025.
STC’s dual-listed subsidiary Malaysia Smelting Corporation Berhad (MSC) has moved its tin smelting operations down south to Pulau Indah in Port Klang. With the new plant, MSC expects to benefit from lower operational and manpower costs and energy-saving initiatives while reducing its overall carbon footprint.
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On the site of the former smelting plant, STC envisions a new central business district (CBD).
STC Property Management (STCPM) is spearheading the development of Straits City, a 40- acre CBD project that the company believes is “strategically located” to benefit from Penang’s growth as a global semiconductor manufacturing hub and Malaysia’s 2025 budget, which prioritises infrastructure investment and digitalisation.
STC adds that infrastructure developments, including the expansion of Penang International Airport and the construction of Penang Light Rail Transit, are expected to boost tourism and create economic opportunities.
After years of waiting, the Crowne Plaza Penang Straits City hotel opened last August, marking the completion of Straits City’s first phase. The hotel is a 23-storey mixed-use development with 343 rooms. It also features a retail podium with a net lettable area of 42,000 sq ft and meeting, incentives, conferences and exhibition (MICE) facilities.
An artist’s impression of the Straits City project
The full 10-phase Straits City development is expected to be completed by 2038.
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“STCPM is now continuing to work towards our longer-term goal, which is to develop our Straits City future city project into a 40-acre smart and sustainable mixed-use development, integrating residential, office, retail and hospitality elements,” says senior investment manager Ng Kong Chiat.
Beyond the projects already announced, STC deputy chief investment officer Yeo Eng Kwang says his team is “definitely” looking at “exciting things” like “independent living, brown-to-green opportunities and ways to collaborate with third-party people to co-invest in funds”.
Teng, who is also CEO of Straits Developments, sees a great opportunity to enter the senior independent living business. “It’s a great megatrend, something that everyone can seize and do well, and certainly, we intend to do it well and do it globally if we can. We will give more details when we have furnished out the plans.”
Tan Hwei Yee, CEO of STCPM, does not see an overlap with Far East Hospitality Holdings, the group’s 30%-owned hospitality platform. “We are really targeting that baby boomer generation who is demanding more lifestyle needs. So, it’s really way beyond just providing accommodation.”
Tan, who is also head of property at Straits Developments, adds: “Because they have higher affordability, these are the people who want to enjoy life so that whole package of independent living is going to be a little bit different from a typical hotel.”
In FY2024, STC posted a shallower loss after tax and non-controlling interests of $7.2 million, improving from a $28.6 million loss in FY2023.
FY2024 ebitda rose 56.6% y-o-y to $124.4 million while profit after tax swung into the black to $11.0 million from a loss after tax of $12.1 million in FY2023.
For the full year, STC posted a loss per share of 1.6 cents, improving from a loss per share of 6.4 cents in FY2023.
The positive performance was primarily attributable to improved profitability across its three segments: resources, property and hospitality. STC also booked higher net fair value gains from Straits Real Estate’s investment properties in Australia, South Korea and the UK.
STC’s board has proposed an interim dividend of 8 cents per share, flat y-o-y.
Photos: Albert Chua/The Edge Singapore, STC, Straits Developments
Read more about The Straits Trading Company:
- Straits Trading Company posts shallower loss of $7.2 mil for FY2024 (March 1)
- Straits Trading Company launches second series of three-month commercial papers on SDAX (Jan 6)
- Straits Trading Company launches $55 mil multicurrency commercial paper programme on SDAX (October 2024)
- Straits Trading Company partners SDAX to offer investment opportunities to its Shareholders’ Club (October 2024)
- Straits Trading eyes new Penang hotel, tourism recovery (March 2024)
- Straits Trading reports $28.6 mil loss in FY2023 on lower revenue and higher funding costs (February 2024)
- 2022 cover story and interview with Eric Teng: Straits Trading's fifth act (June 2022)
