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Friday, September 2, 2011

Glomac: No chance of asset bubble in Malaysia

Glomac's group managing director says prices of properties in Malaysia have not "skyrocketed" as compared with Hong Kong, China and Singapore.

Kuala Lumpur: The chief of Glomac Bhd has quashed talks that the local housing market is overheating and will lead to an asset bubble.

Group managing director cum chief executive officer Datuk FD Iskandar FD Mansor Iskandar said prices of properties in Malaysia have not "skyrocketed" as compared with Hong Kong, China and Singapore. The countries have been recording sharp price jumps of 40 per cent to 60 per cent since 2009.

"We are in a highly-regulated industry so it won't be possible to have an asset bubble here," Iskandar said in an interview with Business Times.

He said in general, property prices in the local housing have been increasing by 5 per cent to 10 per cent per year, which he described as healthy.

"Property prices will continue to appreciate as land and raw materials become more expensive," said Iskandar, who is also deputy president of Real Estate and Housing Developers' Association Malaysia (Rehda).

He is confident that Glomac will record strong double-digit growth of 30 per cent in the next two years, led by sales from its current projects.

Glomac has 13 ongoing projects in Kuala Lumpur, Sungai Buloh, Rawang and Johor, with a balance gross development value of RM3.8 billion.

The company's unbilled sales remain high at RM550 million as at April 30 2011.

Iskandar said the RM950 million Glomac Damansara project in Petaling Jaya, Selangor, will contribute significantly to its net profit and revenue.

For fiscal year ended April 30 2011, Glomac chalked up 54.2 per cent gain in net profit to RM63 million, while revenue surged 90 per cent to RM601.5 million.

"The MRT (Mass Rapid Transit) project will instill confidence in buyers and many residential projects are expected to benefit from the implementation," Iskandar said.

By Business Times

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