Mah Sing to focus on landbank expansion in Klang Valley

Prospective buyers checking out a Mah Sing project. Credit Suisse says the developer

KUALA LUMPUR: Property developer Mah Sing Group plans to increase its landbank in the Klang Valley to make up 75% of its total landbank in the next two to three years from 67% currently.

Executive director Datuk Steven Ng, said considering the company’s low gearing ratio of 0.02 times against 0.5 times limit set internally, it had the ability to borrow up to RM1bil for future land acquisitions.

“If land acquisition constituted 10% of gross development value (GDV), then we can have projects with potential GDV of up to RM10bil,” he told reporters on the sidelines of Invest Malaysia 2017 conference here today.

He said the company’s move to focus on the Klang Valley was due to the region’s high population, which is targeted to reach 10 million by 2020, and better public transport development as the government continued to spend on public transport infrastructure.

However, he said the new land acquisitions would need to fulfill certain criteria such as strategic location, fair prices and method of payment as the company continued to adhere to prudent financial policy of maintaining a healthy net gearing ratio.

On outlook, he said the company was on track to achieve its RM1.8bil sales target after recording RM410.3mil sales in the first three months of this year, with about 70% of the sales from projects in Greater Kuala Lumpur.

He said currently, Mah Sing’s total prime landbank stands at about 883.42 hectares with a total remaining GDV and unbilled sales of RM30bil, which could support the company’s revenue and earnings growth for the next eight years.

Meanwhile, Ng commended the plan by the government’s to introduce a regulatory body to oversee affordable housing, saying it would give more clarity to the buyers as well as the lending institutions on the affordable housing threshold.

However, he said the threshold must be varied according to the locations and cost of developing the property and should not be fixed across the board.

Invest Malaysia 2017, co-organised by Bursa Malaysia Bhd and CIMB Investment Bank with the theme “Malaysia at 60: Maximising Potential”, has attracted over 900 fund managers with total assets under management of US$19.9 trillion (US$1 = RM4.28), a significant increase from US$11 trillion last year. - Bernama