KUALA LUMPUR (Dec 8): Ceramics maker turned property-construction company Spring Gallery Bhd is banking on the untapped East Coast property market for its future growth.

Previously known as PFCE Bhd, the group had on Nov 12, 2015 received its second managing contractor agreement worth some RM147 million for the development of a three-storey shopping complex and a 12-storey three star hotel in Kemaman district, Terengganu.

“Kemaman is a relatively untapped market with a very niche segment, as its economy is supported by the oil and gas industry, and the population there has the spending power,” executive director Kuan Poh Huat told the media after the group’s annual general meeting (AGM) on Tuesday.

“The potential of the district is clearly reflected when we launched our first project in Terengganu. The take up rate was more than half,” Kuan said.

Prior to receiving the managing contractor agreement for the shopping complex and three star hotel, the group had on July 9, 2015 secured its first property development project known as Southern City Phase 1B, an 18-storey apartment in Kemaman.

Kuan added that the demand for its apartment project came mostly from locals in the district, as well as those from nearby township.

He added that the group chose Terengganu for its maiden project as there are no big property players in the East Coast region, while demand is relatively untapped.

“Due to natural disasters during the monsoon season, the people in Kemaman have no choice but to move out from their existing homes, and this actually gives us the competitive edge over other housing development projects, as we are in the middle of town and flood free,” Kuan explained.

The group’s construction business currently makes up roughly 25% of its total revenue, with the rest being its core activity in the ceramics segment, according to Kuan.

For the first quarter ended Sept 30, 2015 (3QFY16), Spring Gallery registered a net profit of RM275,000 or 0.26 sen per share, on the back of RM3.61 million in revenue.

In comparison to the corresponding quarter of the previous year, the group recorded a net loss of RM530,000 or 0.56 sen per share, with revenue of RM2.4 million.

The group had changed its financial year end from Dec 31 to June 30.

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