KUALA LUMPUR, Feb 18 — Kedah-based property developer, Bina Darulaman Bhd, plans to acquire land in Perak for possible residential development and focus on affordable housing given the softer property market.
Group Managing Director Datuk Izham Yusoff said the company’s ample cash pile of RM79.01 million would enable it to take advantage of the softer market and secure any good opportunities.
“Considering the tight market, our strategy this year is to focus on affordable housing whereby about 70-80% of our launches will be priced RM500,000 and below,” he told a press conference at the company’s fourth quarter financial results briefing here today.
The company made its maiden foray into Perak last year when it acquired 3.48 hectares of land in Kuala Kangsar, along with 19.7 hectares in Kedah, which had a combined gross development value of RM475 million.
For the financial year ended Dec 31, 2015, Bina Darulaman posted a 20 per cent higher pre-tax profit of RM40.77 million from RM33.86 million in 2014 and on the back of 26% lower revenue of RM243.3 million from RM328.88 million.
Izham said the lower revenue was due to a slower recognition of sales considering the credit tightening.
“There is still demand for property in Kedah as proven by our high bookings. However, there is a challenge in converting those bookings to sales, as buyers are having a hard time securing financing from banks.
“In our past experience, converting bookings to sales took up to three months, but has since expanded to six months,” he added.
Despite a slowdown in sales, the property division contributed 45% to the company’s revenue, followed by its roads and quarry division (43%), engineering and construction (10%), as well as, hotel and golf (2%).
The better profit was attributed to lower costs arising from the finalisation of accounts of completed projects.