Mah Sing plans to spend up to RM1bil to buy more land
KUALA LUMPUR: Property developer Mah Sing Group Bhd is prepared to spend up to RM1bil to acquire more land primarily within the Klang Valley for potential residential and industrial development.
Mah Sing corporate and investment executive director Datuk Steven Ng said the company is also able to leverage on its low gearing levels if it wanted to fork out more cash for land acquisition purposes.
“Our borrowing now is very low, at 0.18 times. Our internal policy is not to exceed 0.5 times. If it’s 0.5, we’ll have RM1bil to spend on land,” he told reporters after the company’s AGM yesterday.
Mah Sing founder and group managing director Tan Sri Leong Hoy Kum said the company currently sits on a healthy balance sheet with cash and bank balances of RM1.3bil and is looking for new land “practically every day”.
“In the urban area, you can’t afford to have large pieces of land due to scarcity. Most of the central business district projects comprise high-rise developments. So, we will do pocket-sized developments in the Klang Valley, comprising residential projects within the affordable range.
“As for the outskirts, we will focus more on townships, like our project in Rawang. It all depends on the gross development value (GDV) that is generated from the land, not the size of the land.”
Mah Sing’s landbank stood at 2,099 acres as at March 31, 2019, constituting a total remaining GDV and unbilled sales of RM25.1bil, which can sustain the company’s growth for the next eight to nine years.
In spite of the current property market glut, Leong said now would be a good time to acquire more land.
“Now is the right time, where our cashflow is healthy and there is less competition from other developers.
“I think it’s the right time to lock in potential, to find land in good locations that provide quick turnaround. Not all land suits us. We’re very selective and prudent in our cashflow management.”
Leong added that the company is exploring the possibility of developing industrial land.
“With the current China-US trade war, a lot of Chinese manufacturers are thinking of relocating to South-East Asia and Malaysia is one of the countries they are looking at.”
Separately, Leong said Mah Sing is on track to achieve its sales target of RM1.5bil for 2019, underpinned by a healthy take-up from the group’s affordably priced properties so far this year.
He said more than 80% of the company’s residential target sales were priced below RM700,000.
“Most of our projects are also strategically located and we’re optimistic about our prospects going forward.
“When the market recovers, we will continue to cater to more high-end products and cater to the T20 segment.”
Mah Sing recorded a net profit of RM55.01mil in its first quarter ended March 31 compared with RM64.20mil in the previous corresponding period, while revenue came in at RM450.33mil compared with RM584.76mil a year earlier.
Source: TheStar