Fajarbaru targets new project launches in 2H21

by S BIRRUNTHA / pic credit: FB fajarbarubuilder

FAJARBARU Builder Group Bhd is targeting to launch several new residential projects by the second half of this year (2H21), amid expectations the property market will continue to improve.

Its group CEO Datuk Eric Kuan Khian Leng said the group recently completed its maiden development Rica Residence @ Sentul in Kuala Lumpur (KL) on schedule, and started handover in mid-March this year.

He said the handover was originally due to kick off three months earlier, but was delayed due to Movement Control Order (MCO) restrictions. The project has a GDV of RM292.49 million, with an 82% take-up rate which includes bookings.

“The property division remains a significant revenue generator for the group in addition to our core business in construction. We have property development interest not just in Malaysia but in Australia as well.

“Although the Covid-19 pandemic has certainly affected the property segment, there are positive signs that market conditions will improve and we can capitalise on it as long as we adapt and innovate accordingly,” he said in a recent statement.

The company is positive on the outlook of its property segment in anticipation of the economic recovery supported by the National Covid-19 Immunisation Programme.

Despite its construction-based background, the group’s property development segment under its wholly owned subsidiary, Fajarbaru Land (M) Sdn Bhd, has kept its promise of quality to its first customers and delivered extra value to buyers with the instalment of polyurethane flooring for its car parks, and three electric vehicle charging stations.

On the balance units, Kuan said the group is currently in the middle of releasing the remaining developer units.

“We believe there will be a strong take-up after the MCO. The near-completion of the Mass Rapid Transit Line 2 in 2022 is also a positive boost for us to do so smoothly.

We target to sell off the remaining units by the end of 2021.

“Once market condition improves, we will also look into the possibility of launching the Rica Residence @ Kinrara project in 2021 which will be based on a condominium development concept,” he added.

In Melbourne, Australia, Kuan said the group has recently completed its Paragon Queen Street development with GDV of A$182.84 million (RM583.92 million).

The project’s latest take-up rate stands at 93%, and the developer is confident of the sales of the remaining units in its project which has won awards in the Asia Pacific Property Awards 2018-19 and iProperty Development Excellence Award 2019.

This is Fajarbaru’s second development after the success of its first sold-out “Gardenhill” project in Melbourne in 2017.

The group is now onto its third development in the coastal capital, a project comprising 15 residential two-storey houses along Merri Creek in Northcote, Melbourne.

“The construction from Northcote has not yet started, but it is scheduled for a soft launch sometime in mid-2021 and the interest has been encouraging due to the location.

“This project will increase our presence in the property market in Melbourne and expand the group’s earning base,” Kuan said, noting the estimated GDV for the Northcote development is around A$40.2 million (RM127.03 million).

Kuan said Fajarbaru is also looking to expand its local property development footprints not just in the Klang Valley, but also in Penang and Putrajaya once the economy fully reopens.

He said for projects in prime locations, high-end landed property development will be viable but the market demand for affordable housing and family upgraders cannot be neglected.

Kuan added that Fajarbaru will continue to seek landbank in locations that can generate income, while being on the lookout for potential joint ventures to develop properties in Malaysia and Australia.

The group is cautiously optimistic on the growth prospects of its property development segment in 2021 and beyond in line with the expected recovery of market conditions.

Fajarbaru’s shares have surged by about 200% over a one-year period from 26 sen to 74.5 sen at close last Friday. Year-to-date, its share price has climbed by 40%. The group has a market capitalisation of RM278.54 million.

Last month, the group proposed to undertake a rights issue with free warrants to raise up to RM37.39 million to fund the group’s existing and future construction and property development projects, business expansion and future viable investment in the logging and timber trading, as well as plantation segments.

On March 26, the group announced it won a RM3.89 million contract from Malaysia Airports Sdn Bhd for the proposed development of business aviation 1 at the Sultan Abdul Aziz Shah Airport in Subang, Selangor, for a period of six months commencing from April 12.