The Edge - The Edge Property Excellence Awards 2020- Tropicana Corp Bhd

Tropicana Corp Bhd is pushing ahead with its digital marketing and sales strategies in the face of challenging times. Thanks to its wide range of products, which include several large townships as well as standalone projects, the developer has been able to weather the storm.

"Despite the times, the group has delivered encouraging results and continued to progress with its integrated developments and digital transformation initiatives to improve overall cost and operational efficiencies," says group managing director Dion Tan. "We have ridden through this pandemic and we are continually progressing - embarking on cost-efficiency measures, digital realignments, and a careful rationalisation of our launches - in our aim to build a more resilient and agile corporation.

"While short-term growth prospects would remain subdued, we believe there is still pent-up demand for well-planned properties in strategic locations. Furthermore, we offer quality homes complemented by attractive pricing and innovative ownership packages and offerings, especially for first-time homebuyers" As at Oct 31, the group had completed several significant projects in its townships such as Tropicana Aman in Kota Kemuning, Tropicana Metropark in Subang Jaya and Tropicana Heights in Kajang. It had also completed projects at Tropicana Gardens in Kota Damansara and Tropicana 218 Macalister and Courtyard by Marriott in Penang.

The Covid-19 pandemic fast-tracked our digital footprint, which is playing a vital role in our marketing and sales initiatives and consumer engagement dialogue as well as helping to spur the growth of our group." - Tan

Here is an email interview with Tan, who talks about the company's progress and its future plans.

City & Country: How has Tropicana performed over the last 12 months? FY2020 has indeed been a challenging year for us. The introduction of the various movement restrictions (Movement Control Order and Conditional MCO) has further curtailed consumer movement, resulting in the shifting of our sales and marketing strategy. Despite the challenges brought on by the pandemic, our team has been quick to respond to the market conditions and we have rolled out a series of customer-centric developments and introduced our digital sales campaign, Tropicana 10-TEN.

On the financial front, we recorded a revenue of RM224 million in 3QFY2020, down 9% from RM246.1 million in the previous corresponding quarter. For the nine months ended Sept 30 (9MFY2020), the group's revenue stood at RM702.4 million, a 7% dip from RM755.3 million in the same period last year. The decrease in revenue was mainly due to slower sales and lower progress billings for projects across Malaysia, which were affected by the government's various movement restrictions.

However, the group recorded a higher profit before tax of RM115.1 million, which was RM4.7 million or 4.3% higher than the previous corresponding period. This was mainly due to the gains from the sales of two parcels of development land. The group's profit after tax and minority interest (Patmi) came in at RM14.5 million. Despite the market conditions, the group recently rewarded its shareholders with a dividend, by distributing 4.5 treasury shares for every 100 shares held.

Tropicana's unbilled sales stood at RM846.6 million, backed by its residential, commercial and resort-themed developments. Overall, our total landbank stands at 2,344 acres, with a potential total gross development value (GDV) of RM80 billion, placing the group in a good position to unlock the value of its strategic landbank and deliver sustainable earnings over the next few years.

Since the pandemic started, what has Tropicana done to manage the situation? For years, our group has been taking the necessary steps to implement our digital transformation plan in our aim to accelerate our business and serve our customers better. The Covid-19 pandemic fast-tracked our digital footprint, which is playing a vital role in our marketing and sales initiatives and consumer engagement dialogue as well as helping to spur the growth of our group.

Over the years, we have successfully rolled out many digital campaigns. Our latest offering, launched in early May in tandem with the current economic landscape, was our Tropicana 10-TEN campaign. In response to customers' feedback and queries from the previous campaign, we launched the campaign with 10 signature deals to help lessen buyers' financial burden and concerns about the economic uncertainties as well as to spur their confidence in securing their dream home.

Through the Tropicana 10-TEN campaign, buyers were provided with an array of benefits, including a low booking fee of RM1,000; Flexi-buy; 100% financing; easy payment options with zero-interest installment plans up to 18 months; and Memorandum of Transfer at no extra cost. Under this campaign, buyers were given the opportunity to own properties via a 10:90 scheme to lock in their investment and save on progressive interest by paying only 10% before completion for a minimal capital outlay. Existing buyers were also able to earn double rewards of up to 2% of the net purchase price by providing referrals.

In the event of unemployment, pay cuts or diagnosed with Covid-19, buyers will receive a six-month moratorium and interest waiver under this campaign. The developments featured under the Tropicana 10-TEN campaign are Tropicana Aman (Kota Kemuning), Tropicana Metropark (Subang Jaya), Tropicana Gardens, Tropicana Indah (Petaling Jaya), Tropicana Heights (Kajang), Tropicana Cheras, Tropicana Landmark(Kota Kinabalu), and Tropicana Grandhill(Genting Highlands). Interested purchasers were provided with videos and 360 tours of these properties via the Tropicana 10-TEN site.

To accelerate their buying power, our Tropicana 10-TEN site also provided loan eligibility screenings. Prospective buyers had the opportunity to instantly calculate their home loan eligibility with up to 17 banks. These quick adaptive customer-centric initiatives attained overwhelming results and helped us to speed up the purchasing process.

Apart from the major campaigns, Tropicana also introduced 100% financing via Houzkey by Maybank Islamic for first- and second-time homebuyers, leveraging our portfolio of homes suited for the millennial segment. Various customer-centric tools were introduced to help both current and potential customers' purchase properties, namely loan screening, online viewing of properties, and even webinar sessions.

In the first quarter of 2021, we will be unveiling our Tropicana 360 app, especially designed to keep our homeowners informed on their properties' development progress, scheduling, defect submission, facilities booking, and others.

Are there any updates for your projects? In March, the group launched the Tropicana Gardens Mall, which has a net lettable area of about one million sq ft. However, given the challenges of the Movement Control Order (MCO) period, rents were waived in an effort to help ease our tenants' financial burden and allow them to assist their own employees. We have also launched two customer-centric developments - namely Edelweiss SOFO & Serviced Residences at Tropicana Gardens and Tropicana Miyu Residences in Petaling Jaya.

In September, we launched Tropicana Miyu- a freehold condominium project in Jalan Harapan, Petaling Jaya. The project is a 51:49 joint venture between Tropicana Corp and Temokin Holdings Sdn Bhd, offering 271 condominium units in a 41-storey block on 1.9 acres of land. The overall development has a GDV of RM259 million. We have received encouraging responses for this development, even during the MCO period.

Moving into 2021, we will be unveiling our first integrated master-planned development in Genting Highlands, aptly named Tropicana Grandhill. It will be our first foray into the popular Genting Highlands region. We are also planning to roll out Summit Commercial Hub, Tropicana Uplands in Gelang Patah, Johor.

What are the company's future plans? We expect to see the Malaysian property market make a modest recovery in 2021. In line with this, the group will continue to focus on being market-driven in its product offerings while unlocking the value of its landbank in strategic locations across the Klang Valley, Genting Highlands, and the southern region of Peninsular Malaysia. We will further leverage digital technology to ensure that our clients not only have seamless access to service but also allows us to deliver quality customer experience across our value chain.

In the coming years, we can explore the possibilities of expanding our Tropicana foothold in Southeast Asia and Australia. We are taking our time to assess when is the right business opportunity and at the right valuation that will significantly contribute to our key earnings.

In your opinion, what needs to be done to spur the recovery of the economy and property market? The recent stimulus package provided by the Malaysian government, especially the reintroduction of the Home Ownership Campaign and the Real Property Gains Tax exemption unveiled in the Short-Term Economic Recovery Plan (Penjana), will help stimulate the market. Also, the overnight policy rate has been reduced four times from 3% to 1.75% in 2020, an effort by Bank Negara Malaysia to cushion the negative impact on the economy arising from the Covid-19 pandemic, bringing down home loan interest rates nationwide. With these initiatives, the local property sector has been injected with some stimulus.

Apart from that, our wish list is for the government to bring back the Malaysia My Second Home (MM2H) programme. We understand it was not cancelled but temporarily suspended to allow the Ministry of Tourism, Arts and Culture to make detailed specifications and improvements to the programme, comprising safety, property, well-being and economic impact on Malaysia. We hope this programme will be activated soon and we can welcome foreign property investors to our country again.

At Tropicana, we remain optimistic about the property landscape in Malaysia. We can see that the market is slowly recovering and there are signs of improvement in the property sector. We continue to register steady uptake for our properties, and by launching developments that fit the market appetite, we are in a good position to unlock the value of our 2,344 acres of landbank, which has a potential total GDV of RM80 billion.