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Mah Sing expects better 2015 sales, driven by launches

KUALA LUMPUR: Mah Sing Group Bhd, the country’s second-largest property developer by sales value, expects to post higher sales this year, driven by pipeline launches worth RM5.96 billion in gross development value (GDV).

“We are targeting a minimum of RM3.43 billion in sales in 2015, same as 2014, but of course we are aiming to do better,” group managing director and chief executive officer Tan Sri Leong Hoy Kum (pic) told pressmen after the group’s extraordinary general meeting (EGM) yesterday.

New launches this year will come from its Bandar Meridin East township in Iskandar, Johor Baru, M Residence 3 in Rawang, Selangor, Icon Residence in George Town, Penang, and Star Residence in Subang Bestari, Selangor. The launches have a combined GDV of RM5.96 billion.

Some 67% of sales for 2015 will be contributed by its launches in the Klang Valley region, 20% from Johor, 11% from Penang, and 2% from Sabah, said executive director Datuk Steven Ng Poh Seng. 

Earlier at the EGM, Mah Sing shareholders approved its proposed rights issue with warrants to raise up to RM630 million, out of which RM530 million has been earmarked for the acquisition of land banks and property development activities in Puchong, Selangor, and Seremban, Negeri Sembilan.

The group plans to develop an integrated mixed development for the 88.7-acre (35ha) site in Puchong, comprising serviced residences, office towers, retail lots, shop offices, a retail mall and a hotel. The development has a GDV of RM9.3 billion.

Meanwhile, the 960-acre site in Seremban will be for an integrated township with a GDV of RM7.5 billion, comprising 2-storey terrace houses, priced from RM350,000 onwards, superlink homes, semi-detached units, bungalows and commercial components.

Both the Puchong and Seremban developments will be open for preview by the fourth quarter of 2015, said Leong.

Going forward, Leong said the focus will be on affordable housing, in line with the government’s initiative to encourage home ownership under the Malaysian Youth Housing Scheme outlined in Budget 2015.

“Our strategy this year is to keep it affordable. This is in line with market needs and also in response to the government’s move for affordable housing,” said Leong.

Hence, about 84% of Mah Sing’s residential launches this year will be priced below RM1 million, 80% below RM700,000 and 44% below RM500,000.

On the weaker ringgit and low global oil prices, Leong said the two factors will not have any significant effect on Mah Sing’s performance, but he hoped that they could act to mitigate higher costs after the implementation of the goods and services tax (GST).

“With the oil price coming down, manufacturing costs for construction materials may be lower. Hopefully, it could reduce the effects of GST. But it’s too early to tell,” said Leong.

Mah Sing’s share price fell 2 sen or 0.88% to RM2.26 yesterday, giving it a market capitalisation of RM3.34 billion.

 

This article first appeared in The Edge Financial Daily, on January 8, 2015.

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