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Author: Callmejholow   |   Latest post: Mon, 9 Dec 2019, 2:55 PM

 

Crest Builder - Putting Eggs in Many Baskets.

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So, yesterday Crest Builder announced that they won the RM 155.1mil Plaza Kelana Jaya mixed development project from GLOMAC. There has been some good press coverage yesterday - I saw on many various online news portals covering them .

PublicInvest did a Technical Buy, and so did MPlus

RakutenTrade even issued a technical view on them too!

 

I mentioned before previously in the comments of GDB winning the massive RM 517 mil contract from Perdana ParkCity for the Park Regent high end development project. I understand that Crest Builder was one of the front runners for this project too - and it was such a disappointment that they lost this massive contract. 

However... while securing this would exceed their RM 500 mil order book replenishment target, it would also be considered a 'putting all the eggs in the same basket' - throwing in practically 80% of their resources into one single client, one single area, and of course, 80% of the risk too. I am not saying ParkCity is a risky client - but I believe on the other side of the table, ParkCity wouldnt park 90% of their existing contracts with one single contractor as well. (Crest is the contractor for the massive South Brooks project - RM 328mil) Adding both South Brooks and Park Regent - the total contract value would be exceeding RM 800 mil - which I dont think is a viable decision for both the client or the contractor to take on. 

Looking at the Desa ParkCity master plan - there has only been a couple of active contractors - including GDB (Westside III and One Central Park), Crest Builder (Northshore Gardens and South Brooks), Putrajaya Perdana (now delisted)(Arcadia, Breezeway and ParkCity Hospital) and a few unlisted unknowns. Now with Park Regent awarded, the master plan has 4 other future condo projects... so would be interesting to see how the contractors fight for those. 

Hence, losing out on this contract may have been intentional too. Maybe we will see some future ParkCity project awards to Crest Builder upon South Brooks' completion. Furthermore, I heard from my consultant friends that the margins for this project based on this pricing is crazy low - and would be interesting to see how GDB carries the project. 

 

Anyways, to compensate for this disappointment (I believe most of us are disappointed that Crest Builder have not hit their order book replenishment target yet), it turns out that Crest Builder secured this RM 155.1 mil Plaza Kelana Jaya development from GLOMAC. A quick check on Glomac's website shows no other high rise projects in the pipeline, except this 121 Residences, also in Petaling Jaya - and size wise looks similar - which is in Crest's forte. Perhaps Crest would be fighting for this project as well. 

With the Quarza project completing, (that was RM 450 mil) - I think Crest Builder would be focusing on Sime Darby Property's upcoming high rise projects as well. 

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