Glomac caters to demand for affordable property in 2018

Affordable property is ‘the right product’ to suit current market and economic conditions, says CEO


Glomac Bhd plans to launch RM810 million worth of development for the financial year ending April 30, 2018 (FY18), the bulk of it to meet rising demand for affordable properties.

CEO Datuk Seri FD Iskandar Mohamed Mansor said affordable property is “the right product” to suit current market and economic conditions and will reactivate the company’s new development.

“For the last two years, we only launched about RM564 million worth of projects. But now with the RM810 million, we think we have the right products at the right location,” he said after the company’s AGM in Kuala Lumpur yesterday.

He said the launches for FY18 would more than double the RM290 million worth of projects the company launched in FY17.

The company has also taken note of public demand for more housing projects priced within the affordable range, he said.

“We definitely have to be more sensitive to what the market wants. Everybody is talking about affordability. With our FY18 launches, the majority will be under the affordable category,” FD Iskandar said.

The developments include affordable apartments and homes, shops, shop offices, semi-detached homes, serviced apartments and terraced houses.

About 62% of the planned launches are landed residential properties, while high-rise residential and commercial components would comprise 25% and 13% respectively of the overall mix.

FD Iskandar said the first launch will be a development for terraced houses and affordable homes at Saujana Jaya in Kulai, Johor.

The developer’s unbilled sales to date stand at RM570 million which will last for about two years.

“We usually hit 70% to 80% sales within six months of a launch. Hopefully, we can maintain that momentum or better that figure for the new launches,” FD Iskandar said.

The company is also keen on seeking suitable land, mainly in areas where it already has presence such as Greater Kuala Lumpur, Selangor and Johor.

“We are seriously looking into a couple of pieces of land now. In the last two to three years, land prices have been rising but over the past six months or so, we’ve seen the prices stabilise,” he said.

Glomac’s net gearing ratio stood at 0.2 times as at end-April 2017, with total cash and cash equivalent of RM307.5 million.

“For our gearing ratio, we try not to exceed 0.5 times and we’re currently at 0.2 times. So, we still have the capacity to borrow,” FD Iskandar said.

He said the company’s present landbank has a current and future gross development value of slightly over RM9 billion.

Glomac’s net profit for FY17 rose 36.5% to RM110.44 million from RM80.93 million posted a year earlier, largely due to a 306% earnings jump recorded in the first quarter of 2017 (1Q17), while 3Q17 and 4Q17 recorded losses.

Revenue dipped 5.6% to RM581.79 million in FY17 from RM616.6 million registered previously, attributed to the completion of Glomac Centro and Reflection Residences, as well as projects in Saujana Rawang having reached their tail end.