Mah Sing overseas expansion still on, but it will plan cautiously

An artist's impression of the Mah Sing Group's Soouthbay Penang project in Vatu Maung

Mah Sing Group Bhd hopes to launch its maiden offshore project next year.

President and group chief executive Datuk Seri Leong Hoy Kum said the company had not put its regional expansion plans on the backburner but was weighing all the risks and returns before venturing overseas.

“Although we are not in a hurry, we see opportunities overseas. We are exploring Vietnam and China, and hope to identify the right local partners and land for our project later this year,” he told StarBiz.

Mah Sing’s plans to venture abroad at end-2007 were put on hold when Vietnam’s economy encountered overheating problems.

Leong said having seen how fast the country succumbed to its currency and economic problems, Mah Sing learned that it paid to be patient in its overseas plans.

“Now that Vietnam’s economy and property market are stabilising, it is the right time to revisit our overseas ambition. The good thing is that land owners are more willing to negotiate now and we believe there is room for better terms for us,” Leong said.

He said Mah Sing would study projects that fitted well with its business model of fast turnaround time and incurred minimum capital outlay, preferably with deferred payment terms.

“The product types will depend on the results of the feasibility studies and could range from townships, landed or high-rise residences to commercial projects,” he added.

He said Mah Sing would be using its war chest of RM900mil for its overseas expansion and to buy more land in the Klang Valley and Johor.

Locally, it is holding talk with a few landowners for land acquisition of between 500 and 2,000 acres for greenfield township developments when the economy and property market recover.

“We expect to firm up two or three land deals before year-end,” Leong said.

Mah Sing has 16 ongoing projects in the country with estimated gross development value (GDV) of RM3.8bil over the next five to seven years.

For the financial year ending Dec 31, it plans to launch RM400mil worth of property products and expects to record sales of RM450mil. Some of the sales will be from its pre-constructed and on-going projects.

Leong said sales from Mah Sing’s pre-constructed projects and the completion of The Icon Jalan Tun Razak in June would provide it with the necessary cashflow to ride out the slow market now.

Meanwhile, income from the sale of The Icon office building for RM430mil two years ago will still be realised this year.

According to Leong, the market is still very challenging and the company has to put in extra efforts to ensure good take-up for its products.

For this year, it is looking at sales mainly from its Penang project, Southbay Penang, and other Klang Valley projects including Aman Perdana, Hijauan Residence, One Residence, Southgate and StarParc Point.

In Johor, sales will be from Sri Pulai Perdana 2 and Sierra Perdana.

By The Star (by Angie Ng)