It will mature about three months from the date of issuance

 

THE Straits Trading Company on Monday (Jan 6) launched the second series of its three-month commercial paper in digital securities on Singapore&rsquo s Digital Assets Exchange (SDAX).

 

It will be offered for subscription only to accredited investors and institutional ones at an interest rate of 3.7 per cent per annum, and will mature about three months from the date of issuance.

 

The investment company expects to raise between S$5 million and S$10 million from investors, which shall be determined by the board after taking into account demand from investors.

 

On Oct 15, 2024, the company launched a S$55 million multicurrency debt issuance programme to issue digital securities.

 

The first issuance under this programme was launched on the same day and closed on Oct 24, 2024, with strong demand from investors.

 

An aggregate amount of S$9.1 million was successfully raised for the company&rsquo s first issuance of its three-month commercial paper, exceeding its target of a minimum of S$5 million.

 

Further announcements will be made when there are material developments in the debt issuance programme and the second series of its three-month commercial paper, said the company.

The 40-acre mixed-use development in Butterworth aims to establish a vibrant hub of retail, residential, office and leisure spaces

 

SINGAPORE-BASED Straits Developments, the property development arm of Singapore-listed Straits Trading Company, is taking a strategic leap into Malaysia&rsquo s real estate market with Straits City, a landmark mixed-use project in Butterworth, Penang. 

 

Traditionally focused on commodities and financial services, the company is betting on the economic growth of Malaysia&rsquo s northern corridor, aiming to transform 40 acres of prime seafront into the Penang mainland&rsquo s next central business district. 

 

The Straits City project is co-owned by Straits Trading and its 52-per-cent-owned subsidiary Malaysia Smelting Corporation (MSC).

 

With an estimated gross development value of RM4.3 billion (S$1.3 billion) to RM4.6 billion, the development features a blend of retail spaces, hotels, residential properties and offices. It is poised to become the next central business district in the Penang mainland.

 

Eric Teng, chief executive officer at Straits Developments, said the northern corridor, including the Penang mainland and Kulim in Kedah, has attracted an influx of investment and is experiencing robust growth, particularly in the tech industries.

 

&ldquo With rising population and income, there will be greater need for retail, leisure and modern housing offerings. It&rsquo s time for people to shift their attention to the (Penang) mainland,&rdquo said Teng, 65, who is also chief operating officer of the Straits Trading Company, in an interview with The Business Times.

 

Butterworth beckons

The Straits Trading Company&rsquo s decision to develop in Butterworth has been years in the making. Together with its subsidiary MSC, the company has held the 40-acre area for decades.

 

A turning point came in 2018 when both companies signed a memorandum of understanding to explore development options after MSC relocated its smelting operations to a newer facility in Pulau Indah, Selangor.

 

With MSC&rsquo s old Butterworth smelter decommissioned, the land became ripe for transformation, Teng explained.

 

Butterworth&rsquo s strategic location was a key draw for Straits City. The project site is located just five minutes drive from Penang Sentral &ndash containing the transport hub of Penang state and a panoramic view of Penang Island &ndash which is experiencing a surge in economic activity.

 

The anticipated population boom &ndash expected to reach 1.2 million by 2030 &ndash signals a bright future for residential, commercial and tourism developments.

 

&ldquo Additionally, Malaysia&rsquo s electronics and semiconductor sectors are thriving, making Penang an increasingly vital hub in South-east Asia&rsquo s industrial ecosystem,&rdquo Teng added.

 

Leveraging regional growth

 

An artist impression of the Straits City project in Butterworth, Penang. The 10-phase development is expected to be completed by 2038. IMAGE: STRAITS DEVELOPMENTS

Teng noted that the Straits City project is a long-term bet on Malaysia&rsquo s economic resilience and regional influence.

 

&ldquo Penang&rsquo s position at the northern tip of Peninsular Malaysia is strategically crucial. It sits at the gateway to Thailand, making it a key point in China&rsquo s Belt and Road Initiative, which aims to enhance trade links across Asia,&rdquo he said.

 

Furthermore, the state&rsquo s Vision 2030 plan to transform Penang into a &ldquo World-Class Tourist Destination&rdquo with green and sustainable development aligns well with Straits City&rsquo s mission.

 

Smart future city

Straits Developments envisions Straits City as a &ldquo smart future city&rdquo , blending residential, retail, and commercial spaces into an integrated mixed-use development.

 

The first phase of Straits City wrapped up in mid-2024, marking a significant milestone. It includes a 343-room hotel under the Crowne Plaza brand, a retail podium called Straits Galleria, and a three-acre concept centre showcasing the broader development&rsquo s vision.

 

The Crowne Plaza hotel, slated for a grand opening in January 2025, is tailored for business travellers, offers high-end amenities and is expected to draw regional visitors, helping to raise Butterworth&rsquo s profile as a viable commercial destination.

 

Straits Galleria, spanning 42,000 square feet, is designed to appeal to both international tourists and local residents, offering diverse dining and retail experiences.

 

&ldquo The concept centre will serve as a nexus of creativity and innovation, highlighting the development&rsquo s future potential and fostering community engagement,&rdquo said Teng.

 

Phase two, set to break ground in 2025, will introduce serviced apartments, catering to a growing population looking for modern living spaces.

 

Over the next decade, the project will unfold in about 10 phases, with an estimated completion timeline by 2038.

 

On the sustainability front, Straits City incorporates several eco-friendly initiatives. The development will feature energy-efficient systems, AI-driven energy monitoring, and green-building solutions.

 

Teng envisioned the development as a live-work-play hub, transforming Butterworth from an industrial area into a vibrant, sustainable urban community.

 

He noted that the project has attracted other investors and developers, who expressed their interest in exploring joint-venture opportunities. On this, Teng said the company is open to partnerships for future phases, allowing flexibility in funding and leveraging the expertise of others.

 

Diversification and revenue prospects

Straits City represents more than just a real estate venture for the Straits Trading Company. Teng said the development embodies a strategic branding and diversification initiative.

 

As the first major smart and sustainable development in Butterworth, the project positions the company as a leader in innovative urban design in Malaysia.

 

&ldquo Financially, with phase one just completed, it&rsquo s too early to assess long-term returns. We will be looking at the overall business environment and what the market requires as we plan out the phases over time,&rdquo he added.

 

Nevertheless, he noted that there will be non-financial returns such as joint-venture opportunities, strong branding recognition, and contributions to the local community through job creation and placemaking.

 

Despite the optimism, Teng is realistic about the challenges ahead, including macroeconomic uncertainties and government policy changes.

 

&ldquo We are targeting 2038 as an internal timeline for the completion of the project. Along the way, there could be short-term challenges or opportunities that could lead to us to accelerate or extend the timeline,&rdquo he added.