ETC SINGAPORE: Yangon project lifts 1QFY2017 revenue by 92% to S$10m

ETC Singapore's real estate development project in Yangon, Golden City, contributed 92% (S$9.3m) of the Group's 1QFY2017 revenue. (Artist's impression)

Strong sales contribution from Emerging Towns & Cities Singapore's Golden City project in Yangon helped to lift the Group's revenue by 92.3% year-on-year to S$10.1 million in 1QFY2017.

Sales of 16 units in Golden City worth about S$9.3 million were recognized in 1QFY2017. The remaining S$200,000 in revenue was contributed by sales of two units from its Daya Bay project.

“There is large untapped potential for sales of residential units to foreigners in Yangon.”

- Tan Thiam Hee
CEO
Emerging Towns & Cities S'pore

(Photo by Sim Kih)

Q: How many units in Golden City are rented out?

Currently, we have rented out 45 units to an MNC that has its office in Myanmar Plaza, which is very near Golden City. The tenant has another lease for its staff housing at Star City, which is very far away. It has a few hundred staff in Yangon and is relocating them progressively as its lease at Star City expires.

Q: You had a fair value gain of S$8.3m in 1QFY2017. Without that, you will be making a loss.

Going forward, will you have fair value gain on other properties to top up your income?

It was a fair value gain on investment properties. Singapore is very strict on how companies classify development and investment properties. Unless it is clear from day one that an asset is an investment property, we always label it as a development property. We will not do a transfer until the rental agreement is signed.

In this case, we did a transfer when the MNC signed a lease agreement for the 45 units. If we sign more tenancy agreements with the corporates, we will reclassify more units as investment properties.

We did a revaluation for investment properties from the Golden City project because of the transfer. We do not revalue fair value gains for investment properties from the Daya Bay project on a quarterly basis.

Q: How is rental recognized?

We start recognizing revenue on a monthly basis when the occupants move in. Although we have signed a contract for 45 units, we cannot recognize revenue for 45 units upfront.

Revenue recognition for rental properties builds up slowly, but the cashflow is strong. In Myanmar, rental is paid one year in advance. We collected a year’s rental for the 45 units in advance when the agreement was signed. This can be seen in our balance sheet.

Q: What is your rental rate?

The 45 units contribute more than a million US dollars a year.