Prinsiptek to launch 3 property projects

KUALA LUMPUR: Prinsiptek Corporation Bhd is hoping to increase revenue contribution from its property development arm to 20% this year, with three projects worth RM220 million to be launched by the end of the year.

Its group managing director Datuk Foo Chu Jong said the projects — in Shah Alam, Bangi and Tamansari here — would increase contribution from its property arm to the group’s revenue that was now mainly derived from construction.

“Currently, our construction business contributes almost 100% to the group. Hopefully, with these launches, we would see more contribution from the development side,” he said after the company’s AGM here yesterday.

Foo said it would be launching 27 two-and-half-storey houses in Seksyen 7, Shah Alam with a gross development value (GDV) of RM20 million, with almost all the units already sold.
“In August, we will launch our RM50 million gated-community residential units in Bangi that are doing well. This would consist of 115 units of two-and-half-storey link houses as well,” he said.

The cream of the crop, however, would be the RM150 million Vue Residences near the Tamansari regeneration project to be launched by year-end, said Foo.

“The Vue Residences would consist of 272 serviced apartments in a 24-storey block which is located near the Tamansari high-end regeneration project where the Pekeliling flats once stood. We are upbeat on this as it is going to be a high-end development when it takes off,” he said.

Foo said the project was strategically located near amenities such as the Kuala Lumpur Hospital and train station. The project would consist of one- to three-bedroom apartments with a built-up of 500 sq ft to 1,300 sq ft and priced from RM500 psf.

Prinsiptek bought the 0.7-acre tract of land for RM20 million in 2006. The project is due to be completed by mid-2013. For the first quarter ended March 31, 2010, Prinsiptek posted a RM824,000 net profit versus RM731,000 a year earlier, while revenue rose to RM32.55 million from RM25.59 million. Basic earnings per share rose to 0.65 sen from 0.58 sen.

Apart from the three projects, Foo said the group was scouting for land in the Klang Valley and Penang.

“Our strategy is to look for pockets of land in these two places with ready-made infrastructure. The market and population are already there which save us cost. We are also looking at opportunities for joint ventures,” he said. On the construction side, Foo said the upcoming 10th Malaysia Plan augured well for the group as it expected government jobs to be rolled out soon.

“The prime minister has been announcing a lot of jobs under the upcoming 10MP. We anticipate a lot of the government land including those in Sungai Besi, Sungai Buloh and even the old Pudu jail to be released for development. This is good news for constructors like us,” he said.

Foo said Prinsiptek was hopeful of securing some of these government jobs.

“We currently have RM200 million worth of order book for our construction arm. The outlook for this year is better than last year, as we also anticipate more contribution from our property development side,” he said.

On overseas efforts, Foo said Prinsiptek would be launching an RM80 million mixed development in Bangkok by the end of this year.

“Last month, we successfully handed over 130 units of low-cost flats to the National Housing Authority in Thailand,” he added.

Foo said the group was also vying for construction projects in Brunei. “We have recently tendered for RM100 million worth of construction jobs from the Brunei government and we are waiting for its decision,” he said.