Mah Sing eyes M40 housing market

By MARK RAO & NG MIN SHEN / Pic By TMR FILE PIX

MAH Sing Group Bhd is envisioned to launch RM2.2 billion worth of properties targeted at the middle-income housing market this year.

Its ED Datuk Steven Ng Poh Seng (picture) said the company is projecting higher property sales this year, while remaining conservative in light of the soft property and housing loan market.

“We are being very conservative at a RM1.5 billion sales target,” he said in a briefing during Invest Malaysia 2019 in Kuala Lumpur yesterday.

Ng said Mah Sing projects in Cheras, Sentul and Bangi are mainly built for the affordable segment, particularly the middle 40% income group (M40).

“We are not doing the B40 group because I think the government is taking care of that part,” he said.

Mah Sing managed RM1.5 billion in property sales last year, with 83% of sales coming from residential products priced below RM700,000.

This year, the property group expects 81% of its property sales to come from the same segment.

Mah Sing’s sales target this year is significantly lower than the RM3.4 billion it achieved in 2014.

However, the target is reflective of today’s property market, which continues to be plagued by an acute overhang, especially in the Klang Valley, Johor and Penang.

Mah Sing itself has a high number of unsold completed units which the company is currently addressing.

Despite the challenges, the property developer was in a net cash position last year, recording RM1.22 billion in cash and bank balances at Dec 31, 2018.

In view of this, Mah Sing is actively looking to expand its present landbank, particularly in the Klang Valley, and will focus on niche developments that can be developed immediately.

To date, the developer has 2,105 acres (851.86ha) of land in Malaysia with a gross development value and unbilled sales of approximately RM25.7 billion.

This will provide the group with eight years of earnings visibility, according to management.

On the government’s plans to reduce the exposure of government- linked companies to public-listed firms, Ng said the mandate will not be across the board.

“Surely, (local institutional investors) still want to invest in assets that give them good returns. It is the same for us,” he said.

Local institutional investors hold an approximately 41% combined interest in Mah Sing, with Permodalan Nasional Bhd holding the largest stake at about 17%.

Meanwhile, Mah Sing allocated RM28 million from 2017 to 2019 to step up its digital capabilities to provide easier and seamless access for buyers via its in-house app and to gain access to data on consumer behaviour.

The company has invested over RM6 million to date towards this end.