Wanted: Land in Iskandar region

Wanted: Land in Iskandar region

MAH Sing Group Bhd chief executive Datuk Leong Hoy Kum said the time was right to “strike” and that the company was in the process of raising capital to fund the expansion of its property division.

Leong said the combination of Government support, better economic times as well as an “air of optimism” in the property sector, especially in the Iskandar Development Region (IDR) has made Mah Sing proactive in looking for more land in south Johor and Kuala Lumpur.

“We plan to acquire more prime land that Mah Sing can value-add to by building niche and high-end commercial and residential houses. The IDR has definitely caught our interest because of the region's high growth potential,” he said.

The company currently has just over 500 acres of land bank but Leong said it was never the policy of the company to buy huge parcels of land.

“We are more interested in quality land in good location with good capital gains and high yield potential,” he noted.

Leong said Mah Sing was no stranger in south Johor.

The property developer has been developing residential homes in the area since 2000, including Austin Perdana in Tebrau.

Mah Sing's other property projects include Hijauan Residence (Cheras), Duta Perdana (Puchong), Kemuning Residence (Shah Alam), Sri Pulai Perdana (Skudai), Sierra Perdana (Tebrau-Plentong) and a commercial project in Mount Kiara.

An analyst with CIMB Securities said Mah Sing was unique due to its quick “turnaround model” which allowed the company to register quicker return on equity, compared with most of the other property developers.

He said most property developers had target prices pegged to their revised net asset value, however, this was not the case with Mah Sing.

“For Mah Sing, we have tagged a 20% discount to the targeted property sector price earnings of 18 times to reflect the company's strong earnings growth and consistent ability to secure strategically located land bank at reasonable prices,” he said.

Mah Sing reported a return on equity (ROE) of 21%, which made the company one of the best performers among property developers (in terms of ROE).

Another property developer that has a firm footing in the IDR is Mulpha International Bhd.

Executive chairman Lee Seng Huang said the company's Leisure Farm Resort in south Johor would benefit from the strong Government support and allocation under the Ninth Malaysia Plan to develop the IDR.

“We believe Leisure Farm Resort will present itself as one of the prime residential areas in the region,” Lee said, adding that over the years, the company had dedicated a lot of effort to unlock values in the Malaysian property market.

He said Mulpha was pleased that its Leisure Farm Resort development had started to produce results from years of hard work.

Lee said Mulpha also had sizeable land bank, especially in Gelang Patah, Johor, with over 700 acres of land there yet to be developed.

“Mulpha’s concept is only to build when the time is right and not just build for the sake of earning revenue,” he noted.

Other property developers that have a presence in south Johor include SP Setia Bhd, UEM Land Sdn Bhd (the property unit of UEM World Bhd) and Gamuda Land Bhd.

UEM Land and Gamuda Land have formed a 50:50 partnership to jointly develop Horizon Hills, which has 12 precincts worth RM2.6bil in Nusajaya.

The Horizon Hills project would be the residential nucleus of Nusajaya, one of the five key flagship zones for other developments in the IDR.

UEM World managing director and chief executive officer Datuk Ahmad Pardas Senin said: “We hope the first phase – The Gateway - scheduled to be completed by year end will act as a catalyst to further accelerate other developments in the IDR.

“The township will consist of 5,787 housing units, an 18-hole golf course, a signature resort club and themed gardens,” he said.

Gamuda group managing director Datuk Lin Yun Ling said the township would be developed in 11 phases and would take eight to nine years to complete.

An official spokesperson from SP Setia said the company had purchased huge land parcels in south Johor before the Asian financial crisis in 1997.

She said SP Setia was now benefiting from the upswing in property demand and property appreciation in south Johor as a result of the Government’s initiatives to make the region an economic powerhouse.

“Many of SP Setia's property development projects there have now been revived,” she said.