Gamuda Land targets RM5b property sales over next 2 years

KUALA LUMPUR: Datuk Lin Yun Ling, Gamuda Bhd group managing director, said the company's property arm, Gamuda Land Sdn Bhd, is targeting RM5 billion worth of sales over the next two years as it embarks on a "high-growth" phase in 2011.

Lin said some RM2 billion in sales is expected to come from Gamuda Land's various local projects while the remaining RM3 billion would be contributed by its two real estate projects in Vietnam.

"For us, that is a giant leap, so we are busy making sure we don't have bottlenecks to achieve that RM5 billion," Lin told reporters after Gamuda's annual general meeting here on Thursday, Dec 9.

Gamuda Land's current unbilled sales stand at RM800 million while the total gross development value (GDV) of its Vietnam property ventures is currently at over RM12 billion, Lin said.

Gamuda Land's two projects in Vietnam are Gamuda City, a 500-acre mixed township development in Hanoi, and Celadon City, which incorporates a fully landscaped lake and park in Ho Chi Minh City.

The GDVs for Gamuda City and Celadon City are expected to be USD$9 billion (RM28.3 billion) and RM5.5 billion, respectively, over the next nine years.

Both flagship developments are set for their launches in early 2011. Gamuda expects them to drive its revenue and profit growth in FY2011.

In its annual report, Gamuda said its property division contributed 24% of the group's overall pre-tax profit in FY2010 ended July 31.

For the 12-month period ended July 31, Gamuda's property division reported a 29.2% increase in revenue to RM526.36 million, from RM407.36 million a year ago.

During the same period, the group's property division's pre-tax profit rose 18.93% to RM88.15 million, from RM74.12 million a year ago.

For FY2010, Gamuda's net profit surged 45% to RM280.69 million from RM193.68 million in the previous year despite a slight drop in revenue to RM2.45 billion from RM2.72 billion.

As at July 31, Gamuda's portfolio of developments has a total GDV of RM22 billion over the next ten years, the company said in its annual report.

Gamuda Land's Malaysian projects include Madge Mansions in Kuala Lumpur, Jade Hills in Kajang, Horizon Hills in Iskandar Malaysia and Kota Kemuning in Shah Alam.

Lin said Gamuda was not overly concerned with the recent slew of proposed mergers by big names in the property development sector and that Gamuda Land's priorities were different.

Lin said the merger strategy were likely to be favoured by those concerned about the depletion of their land banks, which was not a key concern for Gamuda.

"We are embarking on a high-growth phase. If anything, our concern is not on whether our land bank is ample. Our priority now is to sell down our land bank through innovative developments," Lin said.

However, when asked if he would rule out a merger involving Gamuda Land, Lin answered, "Never say never".

Lin also said there were no plans to spin off Gamuda Land.

Last month, the property industry was kept abuzz with the news of three mega-mergers involving six property developers.

If the proposals come to fruition, the Malaysian property landscape will see the combined UEM Land Holdings Bhd and Sunrise Bhd becoming the largest property player, followed by the merged IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB), SP Setia Bhd, and the merged Sunway group.

Moving forward, Lin said strong buying activity in the property market would likely be sustainable if interest rates remain low and consumer appetite for property remains robust.