SUBANG JAYA, November 23— Property developer Titijaya Land Bhd is expanding its business portfolio to include affordable housing as part of its strategy to enhance its future earnings visibility.
Its Deputy Group Managing Director, Lim Poh Yit said the company was currently developing mid to high-end residential properties, as well as industrial and commercial projects.
“The move to grow this market segment, the country’s biggest untapped housing segment, is in line with our business transformation.
“It is also in sync with the government’s initiatives to assist low and middle-income groups to own homes,” he told a press conference, here today.
Lim said the affordable housing project would commence in June 2017 with a RM2.4 billion gross development value (GDV) on a 2.42-hectare site.
Going forward, Lim said the company would be focusing on the Klang Valley and Penang for future developments following continuous demand in the metropolitan cities.
Titijaya Land’s total land bank of 95.1 hectares (including that of joint-venture projects), with potential GDV of RM10 billion, could sustain the company for the next 10 years.
The company is gearing up for three more launches in 2017 — another block at the existing H2O serviced apartments in Ara Damansara, and Park Residency in Cheras and the first phase of Brickfield’s Riveria Sentral.
“Total unbilled sales to date have reached RM512 million, while the sales target for financial year (FY) 2016 and FY2017 is estimated at RM300 million each,” he said.
Currently, Titijaya Land’s commercial-residential ratio is 50:50 and moving forward, the company plans to reverse it towards the residential-commercial ratio of 70:30, with the inclusion of affordable housing projects.
He said Titijaya Land’s recent acquisition of NPO Builders Sdn Bhd, which owned two plots of land in Mukim Bukit Raja, Petaling District, would also significantly enhance the group’s affordable housing portfolio.
The proposed development in Bukit Raja will entail commercial units, serviced apartments and affordable homes.
The affordable units in the mixed development housing would fetch from RM300,000 to RM450,000.
“We have sufficient land bank, sourced at relatively low cost, earmarked for long-term development horizon in each locality.
“And our land cost-GDV ratio remains attractive. We foresee demand for mid or affordable houses, as well as mass market segments that are within strategic locations.
“Besides targeting the affordable housing segment, we are also promoting our products to foreigners via the Malaysia My Second Home programme.
“Our strategic tie-up with CREC Development (M) Sdn Bhd (CRECD), whose ultimate holding company is China Railway Group Ltd, will pave the way for such efforts,” Lim said.
Titijaya Land, through its unit, had entered into an agreement with CRECD for the proposed acquisition of Ampang Avenue Development Sdn Bhd for a total purchase consideration of RM80 million.
The JV involved the construction and development of a 2.45-hectare leasehold land at the Embassy Row, Jalan Ampang with a GDV of RM2.1 billion.
As for FY 2017 growth, the company expects it to be consistent with that of FY2016.
“FY2017 will be quite flat and we expect it to pick up in FY2018 onwards with new projects in the pipeline,” Lim said.