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Thursday, June 30, 2011

Mah Sing to continue land acquisitions, JVs

Property developer, Mah Sing Group Bhd, will continue to acquire prime land and enter into joint ventures in future, to further boost its expansion strategy.

Managing Director, Tan Sri Leong Hoy Kum said the group is keen on both privately held and government land, that could be developed, as it had the track record, experience, branding and financial capacity to unlock and enhance the value.

"This year should be another good year, particularly for developers, with a knack for creative product development and market strategies, among others.

"The mid to high-end residential segment in well established locations should continue to thrive together with the mass housing market, echoing the government's call to provide affordable housing," he told reporters after Mah Sing's Annual General Meeting here, today.

To date, the group has a total of 34 projects in Greater KL (Kuala Lumpur and Klang Valley), Penang and Johor Bharu, which yield a combined remaining gross development value (GDV) and unbilled sales of approximately RM14 billion to last for five to seven years.

Leong also expects the positive sentiment for the property market to continue, riding on the favorable employment conditions and stable economic growth.

"It is a good time to buy properties now, in view of the rising construction cost environment as buyers can lock in current property prices and enjoy borrowing rates, which are still very reasonable.

"Buyers should consider the developer’s track record, in terms of product delivery, quality, service and potential upside of the property," he said, adding, the group will maintain its focus on the local property market for its expansion plan.

For the first quarter ended March 31, 2011, Mah Sing reported a net profit and revenue of RM41.2 million and RM311.8 million respectively.

"We surpassed our shareholders' expectations last year and are working hard on achieving another good year in 2011 with more launches coming up in the second half," Leong said.

Macquarie Equities Research, the latest research firm to have initiated coverage of the group, has forecast Mah Sing' earnings to grow at a compound annual growth rate (CAGR) of 54 per cent over financial years 2011-2013.

In order to provide continuous value enhancement to shareholders, the group is aiming for a RM5 billion market capitalisation within five years, from its present RM2.2 billion.

By Bernama

Merge Housing to go private

PETALING JAYA: Property developer Merge Housing Bhd's chief and his two brothers are looking to take the company private, by offering to buy up all remaining shares not owned by them, or some 69.2 million shares, for RM45mil.

In a Bursa Malaysia announcement yesterday, Merge Housing's managing director Lee Kuang Chong and his two brothers, Lee Fatt Chong and Lee Heng Choong, proposed to undertake a conditional take-over offer to buy all the remaining shares of RM1 each in Merge Housing (net of treasury shares) not owned by them for 65 sen per share.

The brothers collectively hold 75.83 million shares in the company, or representing 52.37% of the issued and paid-up capital of Merge Housing (excluding 5.21 million treasury shares). Lee Kuang Chong holds a direct equity interest of 30.11%, Lee Fatt Chong has a 17.36% stake and Lee Heng Choong's holding is 4.9% in Merge Housing.

The offer price represented a premium of 5.5 sen or 9.24% above the closing price of Merge Housing shares on Tuesday of 59.5 sen, being the last trading day prior to the date of this notice.

The announcement said that the offer price was arrived at after taking into consideration a premium of 9.8 sen or 17.75% above the five-day volume weighted average market share price (VWAP) of Merge Housing shares up to and including June 28, of 55.2 sen and a premium of 10.4 sen or 19.05% above the one-month VWAP up to and including June 28 of 54.6 sen.

The consideration for the offer will be satisfied in cash and should the company declare or pay any dividend and/or other distributions on or after the date of the announcement but prior to the close of the offer, shareholders were entitled to retain the dividend and/or distributions.

However, the consideration for each offer share shall be reduced by the quantum of the net dividend and/or distribution per Merger Housing share.

No rationale was provided for the privatisation exercise.

Based on the company's annual report 2010, a net profit of RM1.13mil was posted against a revenue of RM92.6mil for the financial year ended May 31 2010. Meanwhile, it made a net loss of RM24.6mil against a revenue of RM83.6mil for the financial year ended May 31 2009.

According to the group's website, its major land bank is located in Subang 2, Mon't Kiara, Puchong/Old Klang Road as well as Bukit Jelutong. Although it initially catered to the mass low to medium cost market, the group has now shifted into landed properties and higher end properties.

By The Star

Keep politics off affordable housing schemes

It would appear that demand for super high-end homes is showing absolutely no sign of abating. YTL Land & Development issued a press release that its Grove at Lake Fields project in Sungai Besi, from a starting price of RM1.8mil, has been snapped up by eager buyers ahead of its launch.

Maybe its the name of the developer that led to a such a reception towards its project.

YTL has certainly created a reputation for itself in the property market with buyers appreciating the quality of the houses it builds.

But its that kind of mismatch that has created somewhat an imbalance in the supply of property especially in the major markets natiowide like Kuala Lumpur.

With economic activity chugging away and jobs still being created, more so when economic programmes by the Government start to see more investment and employment being created throughout the country, demand for housing in the hot markets will be on the rise.

Unfortunately, most of the homes being launched are beyond the reach of many Malaysians, especially those who are early in their careers, and the gap is set to widen as a larger percentage of Malaysians enter the age of employment year after year.

Given the penchant for developers to reap as much profit from their landbank, the vast majority of Malaysians will be priced out and just cannot afford to shell out that kind of money to buy a house, regardless of how big or how good the developer is, and at the same time keep up with the escalating cost of living.

It therefore comes to no one's surprise that the Government is now looking to step in and fulfil that demand gap by coming up with two affordable housing schemes ranging between RM100,000 and RM300,000 for Malaysians who do not yet own a home.

Both those schemes which will cater for households earning under RM3,000 a month and RM6,000 a month, which together would form the bulk of Malaysians today.

It was revealed that a portion of the redevelopment of the old Sungai Besi airport development which is called Bandar Malaysia would be carved out to build affordable homes for Malaysians.

Similar projects are being hatched in other areas where the Government owns land and eventually, such schemes would require the support of all parties including state governments as more projects are built throughout the country.

But the building of affordable home should not be subject to partisan politics. The last thing people would want is politicians trying to gain mileage at the expense of people's welfare.

It is also worth watching the impact of new public affordable housing on the price of comparably priced houses currently in the secondary market, which is there but not in the choice locations.

Deputy news editor Jagdev Singh Sidhu misses eating tasty food that is bad for your body.

By The Star (by Jagdev Singh Sidhu)