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Y&G confident of affordable offerings

KUALA LUMPUR: Y&G Corp Bhd is confident it will weather any softening of property prices the market may predict, due to its focus on affordable housing and the owner-occupier segment within the property development sector.

Speaking to reporters after the group’s extraordinary general meeting last Friday, Y&G corporate planning manager Yap Jun Wei said due to the group positioning itself in suburban areas within the Klang Valley surrounded by mature markets, it would be more resilient to market volatility.

“We can see that developers are getting quite cautious, but our focus is primarily on the mass market and affordable housing, so that would mean we are more resilient to the ups and downs of the market. [Our projects are] going to be based more on the needs of people who want to stay there, not so much on speculation,” he said.

“We are definitely focused on providing an element of affordable housing ... looking at our projects in Jalan Kapar, Beserah, Sentosa and Serdang, those are definitely affordable housing. So we have a fair mix of affordable housing and the more premium houses.”  

Y&G currently has ongoing projects in Jalan Kapar and Sentosa in Klang, Beserah in Kuantan, Sri Jaromas in Jenjarom and LaVille in Balakong.

Late last year, the company proposed the acquisition of 267 acres  (108.03ha) of leasehold land from the Malaysian Agriculture Research and Development Institute (Mardi) for a total cash consideration of RM100 million. It also proposed to acquire three privately-held companies with a total of 37.31 acres of land in the respective vicinities of Kapar, Shah Alam and Seri Kembangan for a total of RM25.82 million.

All have ongoing developments or developments which are expected to commence soon.

Looking ahead, Y&G executive director, Yap Jun Jien said the group is expecting  double-digit growth in profit for the financial year ending Dec 31, 2014.

“We are launching three projects this year with a total gross development value (GDV) of RM350 million,” he said.

The most anticipated of the projects will be the mixed development comprising residential and commercial properties on the leasehold land purchased from Mardi, with a GDV of more than RM1 billion. The land is located within the vicinity of the Kesas highway as well as major urban centres such as Subang Jaya, Klang and Shah Alam.

“This will be our new flagship project, showcasing our development ability in innovative designs and concepts to create new communities in affordable homes,” said Jun Jien.

As for future landbank acquisitions, Jun Jien said that while the group’s priority was to complete its current acquisitions, it was open to any opportunities within the Klang Valley.

The stock closed three sen down at 78 sen last Friday, bringing its market capitalisation to RM120 million.


This article first appeared in The Edge Financial Daily, on April 14, 2014.

 

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