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Wednesday, January 21, 2009

Crisis not slowing down Gamuda projects

KAJANG: Gamuda Bhd’s property arm Gamuda Land Sdn Bhd will continue with its projects despite the softening market.

Managing director Chow Chee Wah said there were enough funds to complete its projects, some of which would be on a long-term basis.

Chow Chee Wah explaining the development of Jade Hills.

“Based on our experience during the last financial crisis, it is better to finish the projects soon so that when the market is stable, the products are ready for the buyers,” he said.

He said, for example, when the property sector was badly hit during the financial crisis in 1997, Gamuda continued to develop its Kota Kemuning integrated township in Shah Alam. Two years later, when the economy recovered, sales increased as the products were already there.

“When the economy is bad, we can’t just stop the development and wait for the recovery. By then, it may be too late to do sales as buyers want a ready product,” Chow said.

The Kota Kemuning township will be fully developed in three years.

Gamuda Land is also the developer of Bandar Botanic in Klang, Valencia in Sungai Buloh, Jade Hills in Kajang and Horizon Hills in Nusajaya.

It is also developing a condominum project in Jalan Madge, Kuala Lumpur, which is scheduled for completion in three years.

Gamuda Land contributes about 30% to group revenue.

On the results of its first quarter ended Oct 31, Chow said the reduced revenue from the property division was due to the economic slowdown which made buyers more cautious.

“They prefer to wait and see because of the current uncertainty. However, with the Government initiatives and banks now offering attractive housing loans, we hope buyers will regain their confidence,” he said.

He added that based on the cycle of the property market, a recovery could be seen next year.

On Jade Hills, Chow said Gamuda Land would transform the 366 acres into a fully integrated township by 2018.

“About 260 acres are reserved for residential development, including terrace and semi-detached houses and bungalows.

“In total, only 800 houses will be built at Jade Hills, making it a low-density development,” he said.

Located in the fast-growing southern Klang Valley corridor and just 20km from Kuala Lumpur, the project is accessible via major highways.

“The gross development value of this township is RM1.5bil and we will develop it in phases,” Chow said, adding that there would be a total of 12 phases.

Prices of the houses will range from RM700,000 to RM2.4mil. There will be proper road and traffic systems, amenities for a healthy lifestyle and also commercial facilities.

“Our target buyers are people living around the Cheras, Serdang and Kajang areas who want to upgrade their lifestyle. We are also targeting expatriates,” he said.

When the first phase was launched last month, the company brought in sales worth RM50mil.

“The first phase of Jade Hills will be ready by mid-2010,” Chow said.

By The Star (by Edy Sarif)

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