KUALA LUMPUR: Mah Sing Group Bhd is taking a big bet on Rawang in Selangor, which will be linked by the mass rapid transit to the city centre.
The property developer acquired another parcel of land in the once backwater town to develop its third township in the area, M Residence 3, which would increase its gross development value (GDV) in the area to RM2.13 billion.
The proposed development has an estimated GDV of RM520 million. It consists of two-storey link homes and two-storey semi-dees with amenities and facilities on a 96.71-acre (38.68ha) land.
With M Residence 3, the group has three township land parcels in Rawang measuring 480 acres. The township is projected to be developed within three to five years. A preview of M Residence 3 is expected in the second half of next year.
Mah Sing acquired the land through its wholly owned unit Mediterranean View Development Sdn Bhd for RM68.66 million cash or RM16.30 per sq ft from Ng Tan Moi and Tan Lee Kau.
In its filing with Bursa Malaysia, the group said the land is situated less than 5km from its existing projects, M Residence and M Residence 2, in Rawang.
“The proposed acquisition is timely and opportunistic for the group, allowing it to capitalise on the branding already established in Rawang and tap into the spillover demand from the two existing projects,” said the developer.
Mah Sing will fund the proposed acquisition and the development cost of the land via a combination of bank borrowings and proceeds raised from a rights issue or internally generated funds.
The property developer announced a 16% rise in net profit to RM69.8 million for its second quarter ended June (2QFY13) from RM60.1 million for 2QFY12. Revenue grew to RM475.7 million from RM455.2 million.
For the first six months ended June (1HFY13), the group posted a higher net profit of RM139.3 million compared with RM120 million for 1HFY12, although revenue was lower at RM898.9 million against RM913 million.
The lower revenue was caused by “year-to-date contributions from high-rise projects that were at early stages of construction”, according to Mah Sing.
The group’s operating profit margin improved to 22.2% for 1HFY13 from 20.1% previously due to its product mix and higher profit recognition from properties delivered to customers.
The developer said it had achieved RM1.5 billion in real estate sales for 1HFY13, hence it is on track to meet its full-year sales target of RM3 billion.
Mah Sing said in view of the strong fundamentals and performance to-date, the group is well placed to deliver a strong set of results for FY13.
This article first appeared in The Edge Financial Daily, on August 28, 2013.
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