Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum says the mid to long-term outlook for the real estate sector remains positive supported by strong fundamental demand for property.
The young demography and strong household formation outstrip annual supply, he said.
Also, the attractive low-interest-rate environment driven by the multiple rounds of Overnight Policy Rate (OPR) and the reduction provides a better position for buyers to own properties.
Leong said the reintroduction of the Home Ownership Campaign (HOC) and other various property-friendly incentives would further help to help stimulate the property market.
“This serves as an impetuous to promote homeownership particularly for first-time homebuyers,” he said in a statement.
With a healthy balance sheet with cash and bank balances at about RM1.13 billion as at June 30, 2020, Leong said that Mah Sing will continue to focus on increasing land banks in Klang Valley with a key focus in the affordable segment.
“Echoing our strategy of fast execution and financial prudence, we have successfully launched all three lands that we bought in 2019. As a market-driven developer, we are always on the lookout for prime lands to continue to roll out products that are in line with the market demand.
“At the same time, we also have remaining landbank of about 805 hectares with gross development value and unbilled sales totalling about RM24.64 billion as of June 30, 2020, which can provide earnings visibility for at least eight years,” he said.
For the six-months to June 30, 2020, Mah Sing posted a pre-tax profit of RM65.6 million on the back of revenue of RM669.8 million.
Revenue from the property development segment was RRM510.8 million, whilst operating profit was RM75 million for the period under review.
The group achieved property sales of about RM418.6 million for the period, with an additional RM1.6 billion sales bookings on hand.
According to Leong, the projects which contributed to the group’s earnings include M Vertica in Cheras, M Centura in Sentul, Southville City in KL South, Meridin East in Johor, and Lakeville Residence in Jalan Kuching.
Other projects, which also contributed, include M Oscar in Off Kuchai Lama, M Aruna in Rawang, Ferringhi Residence and Southbay City in Penang, Sierra Perdana, Meridin @ Medini, and Mah Sing i-Parc in Johor, he said.
“While the market has been relatively quiet, Mah Sing has bucked the trend launching M Luna in Kepong in June 2020 and M Adora in Wangsa Melawati last month after increased digitisation efforts to reach out to buyers. This proved to be a good decision as both launches achieved 90 per cent take-up for the maiden phase during their respective weekend launches,” Leong said.
For the remainder of 2020, Leong said Mah Sing plans to launch more projects in the affordable segment. The projects include Carya in M Aruna, Rawang, remaining blocks of M Vertica in Cheras and Ferringhi Residences 2 in Penang, as well as Acacia, Jasmine 1 & 3 link homes in Meridin East, Johor Bahru.
Mah Sing will also focus on converting the RM1.6 billion in sales bookings, clearing the existing stocks and to catch up with the construction progress of the group’s projects, Leong said.
The group is revising its 2020 sales target to RM1.1 billion from RM1.6 billion previously given a longer period required to convert existing bookings to sales. Leong said although there was a jump in mortgage loan applications in June, the approval rate deteriorated to 24.6 per cent compared to 32.6 per cent in May 2020, primarily due to banks becoming more stringent in approving loans amid weak macroeconomic indicators.