In the blink of an eye, we are already at the end of the second quarter of 2012. We sit down with Mah Sing Group Berhad’s Managing Director cum Group Chief Executive, Tan Sri Dato’ Sri Leong Hoy Kum, to keep abreast of Mah Sing Group’s latest developments amidst them gearing up for the 1Q 2012 results release at press time.
iProperty: It is reported that you plan to acquire RM5 billion worth of land bank. What has been bought and how much is left to buy?
Tan Sri Dato’ Sri Leong Hoy Kum (Mah Sing Group Berhad): In 2012 the Group has targeted land acquisitions with a RM5 billion in Gross Development Value (GDV) potential yield. This may be attained through joint ventures with other land owners and participation in Government land privatization. As at May 2012, we have already achieved 73% of the year’s land banking target.
The Group’s remaining undeveloped land bank of 1,638 acres is expected to yield approximately RM 18.24 billion in GDV and unbilled sales. As 98% of these land banks are still in the growth and planning stages of their life cycle, we should be busy for another five to seven years.
Building in Borneo
iP: With Sabah’s growth projections well above the Klang Valley this year, what is Mah Sing’s presence and plans in Borneo?
MSB: We have commenced registration of interest for our Sutera Avenue project in Kota Kinabalu’s CBD, and the first phase of shops will be launched in the third quarter. These multi-storey shop offices will front the Coastal Highway and will be complemented by street mall retail lots and serviced apartments spread out through 4.26 acres.
These shop offices with generous lot sizes will incorporate a brand new unique concept inspired by Mah Sing’s 30 Jewels and Gourmet Street shops in the flagship Icon City Petaling Jaya. The units are designed for F&B and a street mall retail concept, in synergy with the shop-offices, to create a vibrant retail buzz with alfresco opportunities.
iP: Will it be a unique challenge for Mah Sing in crossing over to Borneo?
MSB: I think it will be putting our property development experience and knowledge in Peninsula Malaysia to good use in Sabah as an established developer of 39 projects in Greater KL, Penang island, Johor Bahru and even Sabah currently. We do have a wealth of know-how and a broad base of good consultants, both local and international, that help add value to the projects we build.
Leveraging on our experience and expertise in bringing together good architecture, new lifestyle concepts and designs that make property management easier all create value for the property. Besides crafting a building faade that is aesthetically pleasing and easily identifiable (making it a new landmark), a lot of thought will be given to the property’s layout design. This drives strong pedestrian traffic that is crucial for retailers, making it easier to manage the property and is instrumental in ensuring the property retains and increases in value.
Property Market Projections & Performance
iP: As we are almost at the end of May, what is your financial outlook for 2H 2012?
MSB: We believe that selected segments of the property market would still be robust this year and next and it is just a matter of fitting supply to demand. Our Sales achievement as at March 30, 2012 of RM676 million already covers almost 27% of 2012’s sales target of RM2.5billion and there will be an update on sales achievement which will be release after your press time, as I have been told. We are optimistic of our strong sales momentum as our products cater to market needs and are located in strategic locations.
In light of the current market sentiment and pent-up demand in this segment, close to 70% of our launches will come from bread and butter products which are mainly smaller units of serviced residences or link homes in townships.
We also see continued demand for landed residential properties above RM1million in good locations, especially for gated and guarded concepts. Some 30% of our launches are in the RM1 million to RM 3 million range, mainly semi-detached homes or bungalows in matured developments. These are expected to still see good take-up as construction would have commenced for certain parcels, lending stronger confidence to buyers.
As for the commercial segment, the smaller SoHo and SoVo properties will continue to be popular thanks to the affordable price points and lack of supply in selected locations especially in integrated developments.