High-end landed property still in demand

Property developer Mah Sing Group Bhd group president and chief executive Datuk Seri Leong Hoy Kum gives his views on the future direction of the company and the outlook for the industry

WHAT are some project launches that can be expected from Mah Sing in the coming months?

We believe this year will see continued demand for medium- to high-end landed products and we have planned our launches accordingly.

For example, we will have Garden Bungalows in Hijauan Residence and designer bungalows in the re-branded One Legenda in Cheras.

The 30 Garden Bungalows come with a land size of 45’x80’ and a built-up area of about 3,407 sq ft and will be priced from RM1.1mil per unit.

One Legenda will offer only 26 limited-edition bungalows with a generous land size of more than 8,000 sq ft and a built-up area of about 5,000 sq ft. They will be priced from RM2.5mil each.

Kemuning Residence in Shah Alam is reaching completion and there will be a few last bungalows which we are offering on a build-and-sell concept.

We will also continue to launch semi-detached houses and bungalows in Aman Perdana, where the take-up rate has been very good.

For our commercial projects, we are optimistic about Southgate Commercial Centre which has done very well, with 90% of Vivo and 80% of Vox & Vertex blocks sold at about RM1,100 per sq ft (psf) for retail and RM550 psf for office suites.

We will also launch our new project, StarParc Point, a freehold commercial project in Setapak directly opposite the upcoming Parkson.

In Penang, we are offering medium- to high-end homes with Residence @Southbay, where there will be some 288 super-link homes with land size from 22’x75’ and built-up from about 3,000 sq ft, priced from RM755,000.

We also have 88 resort bungalows in Legenda @Southbay, which offers land size from 5,000 sq ft to more than 10,000 sq ft, as well as built-up areas of 3,800 to 8,000 sq ft.

These bungalows are priced from RM2mil to RM5mil.

In Johor, we plan to launch more phases in Sierra Perdana and Sri Pulai Perdana 2. Sierra Perdana is enjoying more visibility now as the construction of the upgraded six-lane coastal highway, which will cut through Sierra Perdana, has reached an advanced stage.

With the highway, we are only a few minutes to Permas Jaya and Johor Baru city centre. Sri Pulai Perdana 2 will ride on the success of Sri Pulai Perdana and the spill-over demand from this matured township where UTM is one of the key attractions for people moving into this area.
In your opinion, how has the global financial meltdown impacted the performance of the local property market?

We can still see transactions, albeit at a slower pace, as the medium- to high- end segment has a pool of buyers who are higher income earners. These people have a wider savings/expense ratio, and generally look to invest their excess funds in properties as there are limited investment options right now.

What is the impact on the company’s property sales and new project launches?

We achieved RM367mil in sales in the first nine months of 2008, against our sales target of RM450mil for the year. During the period, we launched properties worth RM399mil against our 2008 target of RM484mil.

For 2009, we are looking to maintain our sales and launch numbers. Besides that, we have pre-constructed projects worth some RM282mil for sale and launch, which will allow us to ride out these challenging times.

How is Mah Sing riding out the current property market slowdown?

Our balance sheet is very healthy with RM143mil cash as at Sept 30. We shall receive an additional RM213mil this year when our The Icon project at Jalan Tun Razak is completed by June.

We still have about RM3.9bil in outstanding gross development value and unbilled sales to last us for the next five years, of which RM282mil is pre-constructed products locked in at old construction costs. Our strong research and development, unique business model of quick turnaround and the right product mix have put us in a better position to ride through these challenges.

What is your outlook for the local property market in the next 12 months?

We expect the medium to high-end landed property segment to continue to yield decent long-term positive capital appreciation going forward.

By The Star