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Titijaya confident of prospects despite challenges

KUALA LUMPUR: Titijaya Land Bhd is confident of its prospects going forward into 2015, despite a potentially challenging environment in the property sector.

Its deputy group managing director Lim Poh Yit said the property industry is cyclical and the group has a flexible strategy to deal with the ups and downs.

“In every cycle, there are opportunities and we will always respond by rolling out different kinds of products. During a downturn, we will move to more affordable properties to cushion any bad times,” he told The Edge Financial Daily after the group’s annual general meeting yesterday.

“Malaysia’s population is moving towards the Klang Valley, which is where we operate, and in terms of birth rate, the population is still growing positively. So, we are supported by that growth and a young population that have strong housing needs,” he said.

Lim expects this year’s property prices to moderate compared with 2013, although this is dependent on any further policy changes.

“If prices do fall, it will depend very much on the overnight policy rate (OPR) or any policy relating accessibility to credit. If there is a credit crunch, then that will affect the market,” he said.

“Besides demand, I think our industry is also facing cost-push inflation. The goods and services tax, fuel costs and the cost of labour will also increase the placement cost for our products.

“There is also the issue of limited land availability in the Klang Valley right now, so the supply is also coming down and at the same time cost is going up,” he added.

Titijaya aims to launch property projects with a gross development value (GDV) of RM6.9 billion over the next eight years, beginning 2015.

The projects will be centred around the Klang Valley, with one upcoming development in Penang. These include TRIO, a mixed development in Shah Alam, H2O, featuring four blocks of residential and serviced apartments in Ara Damansara, and a mixed development in Penang with an estimated GDV of RM2.6 billion.

Lim said the group will be launching between RM700 million and RM800 million worth of properties next year, and aims to achieve between RM500 million and RM600 million in sales for the financial year ending June 30, 2015 (FY15).

This compares with the sales achieved of RM450 million in FY14 and RM280 million in FY13.

Titijaya shares closed down 0.45% yesterday at RM2.19, with a market capitalisation of RM773.8 million.

 

This article first appeared in The Edge Financial Daily, on November 28, 2014.

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