Mahmud: We have plans to list some of our commercial buildings under a REIT on Bursa Malaysia by early next year to raise fresh capital for the development of the CBD and other projects.
SHAH ALAM: Perbadanan Kemajuan Negeri Selangor (PKNS) or the Selangor State Development Corp, plans to develop property projects with a gross development value (GDV) of RM800mil to RM1bil in 2024.
Group chief executive officer Datuk Mahmud Abbas said the state-owned development arm aims to become more commercially driven going forward, as state funding has been cut while its financial obligations require it to grow and move away from its past perception of being a builder of low-cost housing in the state.
“PKNS spends about RM63mil annually on corporate social responsibility programmes. To cover that, we have to sell at least RM1.2bil worth of property yearly.
“Furthermore, we are also facing competition in the affordable housing segment from other developers as they are required to ensure 50% of their project has affordable housing (for land area of 10 acres and above).
“Our plan is to grow PKNS’ revenue of RM2bil now by four fold by 2030 through the growth of our various businesses,” he said at a media event ahead of its rebranding exercise on Aug 8 in line with its 60th anniversary.
Mahmud said PKNS is no longer a property developer per se. It has, via its subsidiaries, ventured into areas like power generations, waste management and medical device manufacturing through Worldwide Holdings Sdn Bhd and healthcare services through Selgate Corp Sdn Bhd.
It also has other businesses such as trading in building materials, insurance, smart and green technology and roof top solar through Selangor Industrial Corp Sdn Bhd.
The power segment could start contributing some RM2bil to the group’s coffers when all its new generation facilities are commissioned, he said.
PKNS’ two key projects that will help take it to the next level are SA Sentral and the Green Industrial Park (Grip) at Kota Puteri Crown City.
SA Sentral will seek to rejuvenate Shah Alam city centre by transforming it into a vibrant central business district (CBD) that encompasses residential development and commercial spaces much like the golden triangle in Kuala Lumpur.
The rejuvenation of the place will include setting up of meetings, incentives, conferences and exhibitions facilities.
“We have plans to list some of our commercial buildings under a real estate investment trust (REIT) on Bursa Malaysia by early next year to raise fresh capital for the development of the CBD and other projects,” said Mahmud, adding that the proposed REIT would have assets yielding at least 6% returns.
Grip, meanwhile, will be an integrated development area with facilities conducive for businesses that seek to be leaders in environment, social and governance initiatives.
The state government wants PKNS to support its industrial plans through the setting up of infrastructure, such as industrial parks, to support job opportunities with every township and achieve the First Selangor Plan which aims to make the state a smart, prosperous and liveable state.
“PKNS, however, does not want to attract businesses that cater to the mass market. We want to attract businesses that have a high barrier to entry now, which have high value add to the economy.
“We have also diversified our products into building and owning central labour quarters at our few industrial parks, driven by demand following the Covid-19 pandemic. The quarters meet international standards and provide recurring income,” he said.
PKNS also remains involved in the development of industrial parks to help the state government attract investors into the state.
“We’re trying to put up industrial parks that meet international standards with all the latest facilities and design and green with clubhouse facilities and recreational facilities,” Mahmud said.
He said the group is also involved in the assisted and senior living space in response to the ageing of the population.
It already has an assisted living facility in Section 13 of Shah Alam and is complementing this with its venture into the healthcare space by building hospitals and managing the facilities via Selgate.
Housing will remain an important part of PKNS’ business model.
Its ongoing township developments include Kota Puteri, Antara Gapi, Selangor Cyber Valley, Bernam Jaya and Siera Alam.
To note, since 60 years of its establishment, PKNS has developed 11 townships in Selangor and built over 160,000 homes covering a total land area of more than 64,000 acres.
Most of its residential developments were low-cost or affordable in nature. But times have changed and so has the housing market due to the development of the state’s economy over the decades.
Mahmud added the state government requires PKNS to pay premiums like other developers, so its land cost had increased by 10% to 15%.
