Magna Prima to launch The View Residence by end-2016

KUALA LUMPUR (Sept 26): Property developer Magna Prima Bhd said it will be launching the RM220.81 million gross development value (GDV) The View Residence, which will be constructed on its recently acquired Shah Alam land, sometime in the fourth quarter of 2016 (4Q16).

The group, in its extraordinary general meeting (EGM) last Friday, received unanimous approval by its shareholders for the acquisition of the 5.25-acre (2.12ha) land in Seksyen 13, Shah Alam, located in the vicinity of Kelab Golf Sultan Abdul Aziz Shah.

“We are looking to launch it before year end, so we can realise some of the sales within the current financial year,” Magna Prima group managing director Datuk Wira Rahadian Mahmud told The Edge Financial Daily after the group’s EGM.

According to independent valuer Messrs Khong & Jaafar Sdn Bhd, the price paid for the land was at RM5 million or a 13.2% premium over its market value.

Meanwhile, independent adviser Affin Hwang Investment Bank said although the price appears to be not fair, the acquisition on an overall basis is fair and reasonable, and is not detrimental to non-interested shareholders.

Rahadian justified the premium paid for the land as the purchase included all the necessary approvals needed to begin works, allowing the group to launch the property much earlier.

“We are buying the land with everything in, as the approvals have been obtained by the vendor. We are actually applying for the advertising permit and developer licence, and will probably get the permit in two months.

“Even though we are paying a premium for the land, we are saving costs in terms of time,” he explained.

To recap, The View Residence will comprise 315 units of three blocks of 15-storey residential apartments and five shop offices. Rahadian said the development is an “easy to digest” project with a GDV of RM220 million, compared to the group’s other prime land banks, with a potential GDV in the billions.

These tracts comprise the 2.62-acre Lai Meng School land in Jalan Ampang, which is still up for sale for RM400 million, and the lands in Seksyen 15, Shah Alam, and Seksyen 5, Petaling Jaya.

The group had previously planned the Jalan Ampang Iconic Towers (GDV: RM1.8 billion) on the Jalan Ampang plot, and an integrated mixed commercial hub (GDV: RM1.4 billion) for the Seksyen 15 land.

“We really didn’t want to start these kinds of billion-ringgit projects in this kind of market condition. So we went shopping around for smaller-sized land banks, which are easy to digest, and the Section 13 land was one of the targets,” he said.

He said the group is looking to acquire land every few quarters, adding that the group intends to purchase another bite-sized piece of land in 2Q17, but did not elaborate.

Going forward, he expects the group to do well for the financial year ending Dec 31, 2016, as Magna Prima has seen some pickup in sales.

“Sales have been picking up and I think we will be able to sell off our inventory before the end of the year, driven by our expanded marketing network,” said Rahadian.

He said the group had expanded its marketing network by employing more sales agents, which had accelerated sales.

“Previously, we used to sell our properties ourselves, but in this kind of market, it’s not as easy as before. Our network of agents are doing quite well and sales have increased,” he said.

This article first appeared in The Edge Financial Daily, on Sept 26, 2016. Subscribe to The Edge Financial Daily here.

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