Magna Prima targets fivefold jump in revenue

PROPERTY developer Magna Prima Bhd is targeting revenue to increase fivefold to RM1.6 billion in four years, contributed mainly by Magna City Kuala Lumpur, its five-in-one integrated lifestyle development.

The RM1.1 billion Magna City, on a 4.12ha freehold site along Jalan Kuching, will be developed in phases over four years, starting from the third quarter.

It will include shop-lots, signature offices, two blocks of serviced apartments comprising 800 units, a boutique hotel and a three-level retail mall.

"With a total current gross development value (GDV) of RM2.6 billion and estimated future revenue of RM1.6 billion, the group is confident of sustaining its earnings visibility for at least the next four years," chief executive officer Lim Ching Choy said after Magna Prima's annual general meeting (AGM) yesterday.


INTEGRATED DEVELOPMENT: Lim talks about Magna City at the AGM

The RM2.6 billion GDV will come from its 34.4ha in the Klang Valley, currently under development.

In the fiscal year ended December 31 2007, Magna posted a higher net profit of RM26.6 million compared with RM93,000 in 2006, largely due to sales from its six-star Avare condominium at the Kuala Lumpur City Centre and the Dataran Otomobil township in Shah Alam, Selangor.

Revenue jumped 326 per cent to RM344.44 million.

"We are taking this occasion (AGM) to unveil Magna City. We have opened it for registration and expect sales to be encouraging as it is the first five-in-one concept project in the northern corridor to meet the integrated needs of consumers," Lim said.

He added that the RM100 million boutique hotel will offer 250 rooms, while the RM445 million lifestyle non-conventional retail mall will be retained to strengthen its recurring income stream.

The serviced apartments are targeted at local as well as overseas buyers from Hong Kong, Singapore, Indonesia, India, South Korea and Australia, and those who have previously purchased Magna Prima properties.

The one-, two- and three-bedroom apartments will have built-ups of 600, 900 and 1,350 sq ft respectively, while the penthouses will offer 3,300 sq ft space.

The units will be priced from RM230,000, or RM350 per sq ft, to RM1.25 million each.

Magna Prima is also looking for land within the Kuala Lumpur city boundary to launch additional integrated developments. It is negotiating with a landowner and expects to conclude a deal for a piece of land in two months, Lim said.

"Our business model is to go for urban pocket-size developments where the GDV is of significant value.

"The group will focus on strengthening its position as a niche integrated lifestyle developer and leverage on the demand for exclusive products in prime locations to ensure sustainable growth in sales and earnings."

On the rising cost of raw materials, Lim said that Magna Prima has ventured upstream into the ready-mix concrete business to ensure regular supply of materials for its projects. It is also sourcing globally to reduce building costs.

Yesterday, shareholders approved the proposed final dividend of seven sen per share for 2007.

By New Straits Times (by Sharen Kaur)

For more information, please visit the official website: http://www.magnaprima.com.my/future.htm