LBS Bina expects higher property prices on rising development costs

Construction costs likely to increase by 5% to 10% this year and stabilise in the next few months, says chairman 

by ANIS HAZIM / Pic by TMR FILE PIX

LBS Bina Group Bhd foresees higher property prices in 2022 due to increasing building raw material prices. 

Its executive chairman Tan Sri Lim Hock San said the price won’t escalate very high to ensure everyone can still afford to buy home property. 

“For sure the property price will go up but not too much because we cannot simply go up so much as the price of houses is based on the construction price and we want to make sure that people can afford to buy,” Lim said after the LBS media briefing yesterday. 

The developer saw higher take-up for its property as people expected an increase in property prices this year. 

“I believe people may assume the property price will go up this year, so people tend to buy the existing project. People were rushing to buy as we saw about RM300 million loan houses approved by the bank last month (December 2021),” he said. 

He expects construction costs will increase by 5% to 10% this year and stabilise in the next few months. 

Last year, LBS recorded RM1.58 billion in property sales, surpassing its RM1.2 billion target. 

For this year, Lim is confident LBS can achieve its sales target of RM1.6 billion as more projects are launched. 

“Our plan is to launch 14 new projects in 2022 which will cover the Klang Valley, Johor, Pahang and Perak — amounting to 3,733 units with a gross development value (GDV) of RM1.77 billion,” he said. 

In the Klang Valley, LBS intends to launch 2,604 units with a total GDV of RM1.11 billion this year. 

“Specifically for the KITA at Cybersouth township, LBS will launch 2,128 units with RM853 million in GDV including the serviced apartments, single and doublestorey terraced houses, and double-storey townhouses in 2022,” he added. 

Other new projects include the Bayu Hills apartment in Genting Highlands (642 units with a total GDV of RM492 million), Taman Kinding Flora single-storey and terraced houses in Chemor, Perak (248 units with a total GDV of RM64 million). 

The group will also have property launches in Johor, namely the Emerald Garden 3 single-storey terraced houses, Royal Garden double-storey semi-dee houses and Laman Bayu 4 double-storey terraced houses with about 239 units and a total GDV of RM108 million. 

LBS also has a joint partnership with the Selangor state government on the Rumah Selangorku Idaman MBI which will deliver 7,210 affordable homes across six locations with a total GDV of RM2.01 billion. 

“LBS Bina targets to launch four Rumah Selangorku Idaman MBI in 2022, namely Idaman BSP in Bandar Saujana Putra, Idaman Cahaya in Shah Alam, Idaman Sari in Puchong and Idaman Melur in Cybersouth. 

“Whereas, Idaman KITA @ Cybersouth and Idaman Perdana in Bandar Puncak Alam are scheduled to launch in 2023,” he noted. 

Concurrently, LBS aims to diversify its property development into small retail buildings such as neighbourhood malls. 

“We are looking into the neighbourhood mall and another project we are going into is the two-storey shops in Bukit Jalil — we are looking at this kind of diversifying projects that will generate the group’s longterm income,” Lim said. 

Currently, LBS owns a neighbourhood mall, namely the M3 Mall in Kuala Lumpur, while the group’s tourist attractions are located in Pahang namely, the Scapes Hotel in Genting Highlands and Cameron Centrum in Cameron Highlands. 

As of Dec 31, 2021, the group’s landbank stood at 2,744 acres (1,110ha), while the group has 18 ongoing development projects with an estimated GDV of RM5.3 billion. 

Lim said LBS will continue to maintain the group’s dividend policy to pay out at least 30% of the profit after tax to enhance the stakeholder value.