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Monday, November 28, 2011

LBS has land-bank with GDV of RM9bil, wants more land

Ongoing project: Lim looking at a model of the D’Island Residence project in Puchong which has a GDV of RM3.5bil.

PETALING JAYA: LBS Bina Group Bhd is looking at a few avenues to raise funds to finance new land acquisitions for its projects.

Managing director Lim Hock San said the options included internal funds, bank financing and private placement.

“We are still in the assessment process and nothing has been firmed up yet. An announcement will be made if a plan has been finalised,” he told StarBiz.

According to Lim, LBS is currently studying a few proposals on possible land acquisitions to expand its landbank.

LBS currently has a land-bank of about 2,300 acres worth an estimated gross development value (GDV) of RM9.1bil.

Some 46% of its land-bank, or 1,071 acres, is in Selangor, while those in Johor make up 25% of its land-bank (574 acres), Perak 18% (406 acres), and Pahang 3% (70 acres). It also has 197 acres in China.

Its ongoing projects include D'Island Residence on 175 acres in Puchong comprising 237 super-link houses, 298 semi-detached units, 148 bungalows and 352 condominiums.

The project with a GDVof RM3.5bil will also have two blocks of commercial units. Its other flagship development is Bandar Saujana Putra that spans over 835 acres in Selangor.

The township launched in February 2003 has a GDV of RM3bil.

LBS also has projects in Cameron Highlands and Bandar Putera Indah in Batu Pahat, Johor.

In Cameron Highlands, LBS is the developer with the largest market share and the company intends to add land-bank there to cement its leadership position.

According to Lim, D'Island Residence will be the biggest growth driver contributing to 41% of its project GDV for the current financial year ending Dec 31, while contribution from Bandar Saujana Putra is expected to make up 36%.

LBS is targeting sales of RM650mil this year and RM800mil in 2012.

As of Nov 20, it had recorded sales of RM604mil. It also had unbilled sales of RM639mil as of Nov 15.

Lim said for the year to-date, the company had launched 1,295 property units worth a GDV of some RM630mil.

Next year, there will be 17 project launches comprising 2,085 units with a GDV of RM1.4bil.

The sales target for FY12 is RM800mil.

OSK Research said in a recent report that LBS Bina should be able to record decent revenue growth over the next few years since it had moved into the mid to high-end market segments from the low to medium-end segments.

The growth in revenue was underpinned by strong unbilled sales and take-up rate for its recent launches.

“To achieve its sales target, LBS plans to launch more than RM1bil worth of projects for this year, with its flagship Bandar Saujana Putra to account for about 45% of the value of the launches,” the report added.

The research house said the company's decision to move up the value chain in the residential market and re-position itself to focus on medium to high-end projects had enabled it to record over 70% year-on-year growth and make a return to the black with profit after tax and minority interests of RM16.5mil in FY10.

It said the unique concept incorporated in the D'Island project contributed to the strong take-up rate, and the project should provide a strong foundation for LBS to further strengthen its position in the high-end market segment.

As for the Cameron Highlands and Batu Pahat projects, although the market size in those areas was rather limited, having a presence there should be able to provide the right balance for LBS through geographical and demographic diversification.

By The Star

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