MK Land mulls unlocking asset value via landbank disposal

By NG MIN SHEN / Pic By TMR File

MK LAND Holdings Bhd is expected to sell a part of its 4,800 acres (1,942ha) landbank that is potentially valued at RM16 billion in the near term.

Group CEO K Mohanachandran (picture) said the property developer will make its final decision on landbank disposals once the company completes the revision of master plans for its major developments including Damansara Perdana in Petaling Jaya, Selangor; Bukit Merah Laketown in Perak and Bandar Technopolis Perdana (formerly known as Lembah Beriah) in Perak.

“Some of these masterplans were done almost 20 years ago, so over time, they need to be reviewed. Our focus is to realise the value of our assets, namely our landbank of 4,800 acres, and there are three options to do so.

“The first option would be developing the land ourselves. Secondly, we will consider collaborating with other parties who have better resources and capacity.

“And, if we see no immediate or mid-term advantage in developing the land, we will look at disposing of those parcels,” he told reporters after the company’s AGM in Kuala Lumpur yesterday.

According to the group’s annual report for the financial year ended June 30, 2018 (FY18), its remaining landbank has a potential gross development value (GDV) of RM16 billion.

The developer has already commenced talks with interested parties for potential land disposals, although no firm commitments have been made.

“We already have people enquiring about our landbank. We’ve been discussing with parties, and they’ve already come to see the land parcels. But, which parcels we sell depends on the (revised) masterplan. We’d rather complete the exercise before we go into serious discussions,” Mohanachandran said.

He added that the larger parcels of land are located in Perak, while those in the Klang Valley are smaller, but have higher value.

“The interest has mostly been for our Klang Valley land, specifically for Damansara Perdana which is seen as a good location. We have had proposals from other developers for our land, but we have not committed to anything,” he said.

Damansara Perdana is MK Land’s first mixed high-end property development, with a GDV to date of close to RM3.6 billion.

In its FY18 annual report, the group said it has remaining undeveloped land of about 196 acres in Damansara Perdana.

The bulk of the developer’s revised masterplan, which includes the decision on whether to develop, collaborate with others or sell its land, will be finalised before the end of its FY19.

Going into FY19, the property player is upbeat on its ability to beat total sales achieved in FY18, which totalled RM117 million.

“We are optimistic, yes. We’ll probably be able to do better than RM117 million, though it’s subject to new launches especial ly the affordable homes in Taman Bunga Raya, Selangor — that will be the catalyst to help us achieve better numbers than FY18,” Mohanachandran said.

To tide the group over during economic downturns, it will also focus on growing recurring income gained from rentals as well as from its resort operations and education segment, although property sales will remain the key driver of earnings expansion.

“The 126 acres we’ve leased out to a solar panel and solar farming company will bring us close to RM500,000 per year in rental. So, we can work with other parties not only for land, but we also have completed commercial buildings where we’re getting good rentals,” Mohanachandran added.