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Monday, January 14, 2008

Magna Prima on lookout for high-yielding land

Lim: Our aim is to go for hot spots, where land is ready for development

Property developer Magna Prima Bhd said it plans to continue buying high-yielding land in the Klang Valley and Selangor, to maintain its profitability.

It is also banking on its four existing projects in Kepong, Selayang and at the Kuala Lumpur City Centre area, and two new launches this year, all worth RM2 billion, to achieve better margins over the next few years, its chief executive officer Lim Ching Choy said.

The company recorded a net profit of RM93,000 in 2006 against a net loss of RM10.95 million in 2005.

For the nine months to September 30 2007, it posted a net profit of RM14.8 million.

"We will be able to churn in a higher profit for the last quarter as we registered better sales last year," Lim told reporters after its recent shareholders' meeting.

Magna has unbilled sales in excess of RM300 million, which will last the company for two years, he said.

"Our aim is to go for hot spots, where land is ready for development and there is fast turnaround, while increasing unbilled sales," Lim said.

Lim ruled out plans to buy land in Penang and Johor, or expanding overseas in the near future.

The company, in which Tan Sri Chua Hock Chin, the former executive vice-chairman of Road Builder (M) Holdings Bhd has a 6.25 per cent interest, is now targeting to launch new commercial and residential properties in Batu 3, Shah Alam, and Jalan Kuching, Kuala Lumpur, by March and June respectively.

For its Jalan Kuching property, it plans to build 20 units of three-storey shops, 200 units of signature offices, a 15-storey hotel/office block, a retail mall, and two blocks of service apartments comprising 800-units sprawled over 10.93 acres.

Magna is planning to sell these properties, which will be completed by July 2011, while retaining the shopping mall for recurring rental income.

"The acquisition of this land for RM57.93 million is in line with the company's business model that is to buy land with development order for fast project turnaround," Lim said.

In Shah Alam, the company plans to build residential and commercial units by 2010, targeting the medium class segment.

Meanwhile, Lim said that Magna is considering acquiring small firms to expand its property and construction activities, and plans to migrate to the main board of Bursa Malaysia in three years to enhance shareholders' value.

He said the company will also issue one fifth of its profit for 2007 as dividend to shareholders by the middle of this year.

By New Straits Times (by Sharen Kaur)

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