The company owns 118 acres of vacant freehold land on Penang island alone, mainly in the northeast as well as in Bayan lepas. The properties were acquired many years ago and Oriental is carrying them at a low cost of RM54.3 mil in the balance sheet, or RM10.56 psf. The company has amarket cap of RM3.08 billion and net cash of RM1.06 billion.
The government which has pledged some RM5.7 bilion for three projects to improve the island's infrastructure. The new infrastructure is expectedto drive up the property demand.
In the past one-and a half year, land prices in penang have appreciated 25% to between RM150 to RM280 psf. A high-end condo in Gurney Drive could fetch up to RM450. Industry player reckon prices could go up further.
