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  • Mah Sing Banks On Affordable Housing
  • BY ANGIE NG

    PETALING JAYA: Despite the generally-held view that the property market will be more subdued in 2014 and 2015, Mah Sing Group Bhd is going ahead with five projects worth a total of RM10.35bil.

    The projects, to be launched in the first quarter, comprise mainly affordable housing, in various locations around the country.

    Group managing director/chief executive Tan Sri Leong Hoy Kum said this was part of the strategy to meet sales target of RM3.6bil for 2014, which would be a 20% growth from that recorded last year.

    He said the new projects would be mostly in the affordable range to meet the needs of the present market environment.

    “Houses with built-up of 1,000 sq ft will do well in the current market environment as the size will cater to the needs of young families,” Leong added.

    Among the projects to be launched or previewed, The Loft in Southbay City, Penang would comprise 78 low-density service residences in the first tower while the launch at Southville City@KL South would feature 197 garden link homes; and D’Sara Sentral, Kuala Lumpur would comprise 322 D’SoVo Suites, 103 D’Style Shops and 247 D’Residenz Suites (first tower).

    Furthermore, the company would be launching its maiden project in Kota Kinabalu called Sutera Avenue with 120 service apartments in the first tower.

    Leong pointed out that Mah Sing’s landbanking strategy over the past two years had focused on locking in larger township land for the affordable range mid-priced products.

    The company’s land bank includes 480 acres in Rawang offering mostly link homes priced from RM400,000; 428 acres in Bangi for the Southville@KL South with the first phase offering mainly affordable apartments from RM318,000; and the 1,352 acres in Bandar Meridin East acquired recently and planned for mostly link homes.

    Despite the softening market conditions, Leong believes residential developments in well-planned townships would see a good take-up due to the integrated nature of the developments. The company would continue sourcing for land to expand its market presence.

    The company appears to be able to weather the slower market as net gearing of 0.21 times remains under the internal target of 0.5 times. This would allow it to increase borrowings for land acquisition since the company has a cashpile of RM788.1mil.

    Leong would still target products at owner occupiers or for long term rental income as demand would still be strong for this group.

    “There is still a large supply-demand gap as supply growth for properties has been declining since 2003, with Malaysia’s supply growth in the second quarter 2013 at only 0.8%. This contributed to the increase in house prices and the strong take up,” he pointed out.

    The company’s unbilled sales of some RM4.185bil as at Sept 30, 2013 provides for strong earnings visibility going forward. Besides this, the company has some RM28.78bil in remaining gross development value (GDV) and unbilled sales.

    The bulk of its remaining GDV is focused in the central region, with 55% in the Klang Valley and Greater Kuala Lumpur, followed by 25% in Iskandar Malaysia, 13% in Penang island and 7% in Sabah.

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