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Tuesday, February 24, 2009

Mah Sing eyes Klang Valley land for quick development

KUALA LUMPUR: With a healthy balance sheet, Mah Sing Group Bhd hopes to acquire more land this year, according to managing director and group chief executive Datuk Seri Leong Hoy Kum.

He said the group was eyeing mature land in the Klang Valley that could be developed quickly.

“We will receive RM200mil payment upon the completion of The Icon Jalan Tun Razak (20-storey commercial building) by June. Coupled with our ability to borrow up to RM300mil, we will have RM500mil worth of cash,” he said yesterday.

As at end-2008, the company had a cash pile of RM172mil, and its net gearing ratio (total debt over total equity) stood at 0.07 times. Even if the company borrows up to RM300mil, the gearing will not reach more than 0.5 times.

“The potential cash flow is more than enough to fund our operations and I think we are one of the few companies that are still looking for land acquisitions at the moment. At times when everyone was very cautious, we saw the potential of StarParc Point (which Mah Sing acquired in November) simply because it was such a good buy – freehold in a place that is normally leasehold. There’s high traffic flow and not much land left in the area,” he said.

Going forward, the company is planning self-generating and less risky projects.

“This is not easy because it requires a lot of commitment and coordination from all departments.

“We believe medium and medium high-end properties will still be resilient to a certain extent this year,” Leong said.

Although Mah Sing’s sales in the fourth quarter last year were slow, the company’s innovative financing packages, such as the Easy Home Ownership programme last month, have boosted revenue.

The company is maintaining its sales target of RM400mil to RM450mil this year. Leong projected the domestic property market would recover by mid-2010.

Currently, Mah Sing has 16 ongoing projects in the Klang Valley, Johor Baru and Penang. As at Dec 31, it had unbilled sales and remaining gross development value totalling RM3.8bil. The company’s total sales in 2008 hit RM395mil.

By The Star (by K.C.Law)

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