Glomac revises FY21 launch target to RM500m on pandemic effects
Datuk Seri Fateh Iskandar Mohamed Mansor 

During time of uncertainties, people always think twice before buying big-ticket items

by FARA AISYAH / pic by TMR FILE

GLOMAC Bhd has revised its new launches planned for the financial year ending April 30, 2020 (FY21), to RM500 million worth of projects versus RM612 million previously, due to the impact of the Covid-19 pandemic.

The property developer has decided to delay its launches to tweak its original plan and adapt to the new normal, its group MD and CEO Datuk Seri Fateh Iskandar Mohamed Mansor (picture) said.

“For now, we might launch about RM500 million worth of projects. We lost about RM154 million due to the GreenTec development, in which Glomac Alliance Sdn Bhd has recently sold a piece of land in Puchong, Selangor, to its related company, Glomac Al Batha Sdn Bhd.

“The new partner gave its input in the project, so we are changing the concept now and need to get the approval for a new development order. So, it won’t be done this year,” he told The Malaysian Reserve in an interview.

Glomac Al Batha is 51%-owned by Glomac, while Al Batha Real Estate of the United Arab Emirates owns the remaining.

According to Fateh Iskandar, Phase 1 of the GreenTec project is planned for launch in early FY22.

With an estimated gross development value of RM154 million, GreenTec is adjacent to the group’s existing Lakeside Residences project in Puchong and comprises 480 SoHo units, serviced apartments and affordable serviced apartments.

Fateh Iskandar added that some of the developer’s new launches are currently on hold as the group is tweaking its plans to adapt to the current Covid-19 pandemic.

“For example, we are working closely with Telekom Malaysia Bhd to increase the speed and reliability of Internet connection in our development(s).

“If we initially planned for a storeroom, we are making changes to the room to make it a small study for the home. There are more things that we are doing, but these are what we can share for now,” he said.

Demand for high-speed stable Internet has spiked amid the pandemic, as more people adopt work-from-home arrangements that rely heavily on strong Internet connections. Subsequently, work or study spaces at home have also become a need.

Glomac’s launches planned for FY21 include four phases of properties comprising terrace houses and affordable townhouses worth RM226 million in Saujana Perdana, Sungai Buloh in Selangor.

Among them is the Tresna Triandra, a two-storey terrace houses development that was fully taken up within three weeks after its launch.

As at end-April 2020, the group’s unbilled sales stood at RM650 million, contributed largely by 121 Residences and [email protected] Jaya.

The 121 Residences have a take-up rate of 75% as of end-FY20, while [email protected] Jaya was 80% taken up.

In FY20, Glomac sold RM385 million worth of properties. More than RM300 million were contributed directly or indirectly by the Home Ownership Campaign (HOC), which was held throughout 2019 and offered incentives such as stamp duty exemptions and 10% discount on property prices.

The HOC was reintroduced in June this year, in a bid to boost the property sector and boost homeownership rates among Malaysians. However, property sales are not expected to bounce back just yet as consumers struggle with unemployment, pay cuts and other pandemic-induced uncertainties.

“A lower Overnight Policy Rate and the reintroduction of the HOC will assist the property market but the level of confidence is not there yet,” Fateh Iskandar said.

“People always think twice before buying big-ticket items because they don’t know once the moratorium ends, will their salaries remain the same or whether they still have jobs or not.”

Despite good bookings received by most developers due to pent-up demand during the Movement Control Order (MCO), the conversion rate will remain a challenge in this tough time, he added.

Earlier this month, Glomac collaborated with luxury interior decorator brand Point 21 to style up one unit in Suria Stonor, Kuala Lumpur, to attract investors and homeowners for the remaining units of the 23-storey premium condominium.

There are very limited developer’s units left available out of the 138 total units, ranging from 3,282 sq ft to 5,414 sq ft in size.