Mah Sing Group intends to enlarge its land holdings in Klang Valley over the next three years to the point that it will account for 75 percent of its overall landbank from 67 percent currently, reported Bernama.
According to its Executive Director Datuk Steven Ng, the company is still able to borrow up to RM1 billion to fund future land acquisitions, given Mah Sing’s low gearing ratio of 0.02 times versus an internal cap of 0.5 times.
“If land acquisition constituted 10 percent of the gross development value (GDV), then we can have projects with potential GDV of up to RM10 billion.”
He explained that the company is focusing on Klang Valley in light of the region’s large population, which is forecasted to hit 10 million by 2020. The government is also continuing to invest in upgrading the area’s public transportation.
However, Mah Sing’s new land acquisitions need to meet several criteria. For instance, the site should be located strategically, its selling price should be acceptable and the payment method should not significantly increase its net gearing ratio beyond a certain limit.
Ng is also optimistic that the firm can achieve its RM1.8 billion sales target this year, after it secured RM410.3 million in sales in Q1 2017, with around 70 percent coming from developments in Greater Kuala Lumpur.
At present, Mah Sing’s overall landbank spans around 883.42ha, while the remaining GDV and unbilled sales amount to RM30 billion. This is expected to sustain the company over the next eight years.
Meanwhile, Ng praised the government’s plan to form a regulatory body to oversee low-cost residential properties as it would give a clearer definition on the price limit for such houses to buyers and banks.
However, the price cap should not be fixed for all affordable houses. It should depend on the location and should take into account the construction cost, he added.
Image sourced from The Star
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