Bina Puri to launch RM500m new residential projects


Bina Puri Holdings Bhd is expected to launch more than RM500 million worth of landed and non-landed residential developments in the Klang Valley and Johor in 2018.

Group ED Datuk Matthew Tee Kai Woon said the projects would begin with a few nonlanded parcels including the Riveria Sentral in Brickfields, as well as other properties in Cheras Utama, Karak Land in Bentong, and a landed development in Johor.

“The upcoming launches would target local buyers as the main priority before we open up the remaining lots to overseas buyers, who are mainly from Singapore, Hong Kong and the Middle East,” he told reporters at a media briefing in Kuala Lumpur yesterday.

Currently, Bina Puri’s unbilled sales stand at approximately RM400 million. The company is also expected to hit the century mark in total property sales by year-end, from the RM40 million sales recorded to date.

The property division’s contribution to the group’s overall turnover accounts for about 9%, or RM90 million year-on-year.

Despite the number of projects that have been lined up, the company is still facing some pressure from its property division due to the current state of the property market, which seems to have bottomed-up over the last few months.

As a hedge against the tepid market environment, Tee said the management is taking proactive measures to boost take-up rates in future developments, by formulating strategies that are outside of the conventional thinking and practices.

“We have reached a point where there is already saturation in our local market. “Therefore, we need to partner with smart property agents to help boost our overall margins, by tapping into the overseas buyers while strengthening the domestic market.

“One of the main contributors to the worsening of the market is the central bank’s stringent clamp down in endfinancing, which has further dampened the margin of financing for loan disbursements,” he added.

Tee said lenders are only allowing between 60% and 70% of margin financing, which in turn reduces buyers’ purchasing power due to insufficient financial backing.

“If the central bank could be more lenient on the lenders, I am positive that the market will correct itself in view of the current mismatch of supply and demand in the housing market,” he said, adding that current loan approval rate for a house purchase is hovering at between 40% and 50% on average.

Currently, Bina Puri’s ongoing property projects are worth RM3.16 billion in gross development value. The projects are expected to sustain the company’s earnings until 2020.

Meanwhile, group CFO David Lee Tuck Wai said the company’s construction tenderbook is currently at the region of more than RM1.5 billion, with some projects expected to be secured over the next 12 months.

“At present, we have managed to secure the Pan Borneo Sabah and Sarawak projects, as well as the Tun Razak Exchange and Wawasan 20 development, along with several other government-linked developments,” he added.

Bina Puri’s existing outstanding construction orderbook is valued at RM1.2 billion, which would sustain the company within the next two to three years.

While construction remains the firm’s biggest top line contributor in the financial year 2016, Bina Puri’s other revenue earners including property development and power supply are expected to improve in the next two financial calendars.

Among the ongoing construction projects include Bonus Regional Sewage Treatment in Kuala Lumpur (RM291 million), Movenpick Spa Resort in Kuala Terengganu (RM129 million), as well as the Medini Tower at Iskandar in Johor (RM195 million).

Bina Puri is also expected to finalise the RM15 billion Kuantan Waterfront Resort City (KWRC) deal by the first quarter of 2018 (1Q18).

Lee said KWRC’s construction works are scheduled to begin by 3Q18 after the corporate exercise is completed.

“On the surface, we have already started development for two service residences, which is part of the first phase,” he added.