TEFD: What are your expectations for 2012, for your company and the property sector?
Leong: Having achieved more than RM2 billion in sales for 2011, we want to continue the momentum and have set a sales target of RM2.5 billion for 2012.
We are optimistic that we can continue our strong sales momentum as our products cater to market needs and are well sited in strategic locations.
Furthermore, we offer products with good concepts in strategic locations, and with our complete range of properties, we can meet buyers’ needs on many levels and for multiple purposes.With 36 landed residential, high-rise, commercial and industrial developments in our stable, we have a property to meet every need.
As for the property sector outlook, property investments have proven to be a reliable asset class. The key drivers that will continue to sustain and drive this sector will be our young population base, new household formation, high saving rates, low unemployment market and strong economic growth.
Looking at individual segments of the property market, products below RM1 million should do well, and demand should be maintained at the same momentum for products above RM1 million if they are in good locations.
We see continued demand for landed residential properties in good locations, especially in gated and guarded schemes. We also believe that smaller units of serviced apartments which are affordable, yet meet the buyers’ needs will be in demand.
For the commercial segment, smaller SoHo and SoVo properties will continue to be popular due to the affordable price points and the lack of such supply in selected locations, especially in integrated development projects.
Besides location, buyers will focus on the design concept, security, lifestyle, environment, community, amenities and accessibility when acquiring a property.
What impact, if any, do you expect from the euro crisis?
Should the European crisis be prolonged, sentiment may be affected and we are all hoping for a soft landing. At the moment, Malaysia is still projecting a minimum 5% growth in GDP this year and 5% to 6% for next year.
The property market in Malaysia is mainly driven by domestic consumption. For Mah Sing, most of our buyers are locals who are buying for own stay and investment, not speculation.
Thus, there will continue to be demand for these products. These are serious buyers who will still go for properties in good locations and concepts by branded developers.
Judging from our recent preview of M Residence@Rawang, the take-up is still good for products that meet market needs. Over one single weekend, 228 units of link homes valued at RM102 million were taken up in this new township.
These were beginner homes priced from RM360,800 to approximately RM500,000 and meet the current need for quality housing at an accessible entry level.
Will BNM’s recent tightening of consumer borrowings have an impact?
Historically, the tightening of consumer borrowings or an increase in interest rates (if any) does not have a significant correlation with property purchases.
In Malaysia, property demand is mainly driven by two things — job security and sentiment.
On a fundamental level, our young population base, new household formation and high saving rates will continue to drive demand for properties. Furthermore, property has always been seen as a good hedge against inflation.
So we look at these two things. In terms of job security, our unemployment is very low, only 3%, and people generally have job security.
We believe that at this juncture, it is more on sentiment, and branded developers offering products that meet market needs in good locations will still see good take-up rates. Developers need to be sensitive to market demand to prevent any mismatch in demand and supply when planning their launches.
What is the company’s plans and focus for 2012?
We hope to achieve another bumper year in 2012, and will focus on launching projects that meet market needs and expectations to support our sales target of RM2.5 billion.
We shall create our market by tapping the pent-up demand of selected sectors and would include new phases in existing projects like Icon City (Petaling Jaya), M City (Jalan Ampang), Icon Residence Mont’ Kiara, Kinrara Residence (Puchong), Garden Residence (Cyberjaya) and Garden Plaza (Cyberjaya), as well as new projects like M Residence@Rawang, all located in the Klang Valley.
Having done very well with iParc@Bukit Jelutong, which was recently named the Best International Industrial Development, we intend to roll out Mah Sing iParc@Iskandar with the same concept in Johor Baru. We will also continue marketing our Sierra Perdana, Sri Pulai Perdana and Austin Perdana (Austin Suites serviced residences) in Johor Baru.
As for Penang island, purchasers can look forward to the maiden previews or launches of Southbay Plaza @Southbay City, Icon Residence Penang and Ferringhi Residence, as well as select units from the Legenda@Southbay bungalow project.
We will continue to be very market-driven, and ride on our branding and expertise to offer niche products which are of good design and value. We shall also focus on and enhance the development appeal of our projects for greater returns to the group and buyers of our properties.
So far, we have met and exceeded market expectations in both sales and financial performance. 2011 was a very good year for us, and we look forward to an even better year in 2012. We have very strong earnings visibility, with unbilled sales of approximately RM2.14 billion as at Sept 30. This is more than twice the revenue we recognised from property development for the whole financial year 2010.
We will also look out for more good landbank even though our unbilled locked-in sales and remaining GDV is estimated at more than RM15 billion and should last the group for five to seven years. We are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth.
What is your personal wish list for 2012?
I look forward to the smooth implementation of the MRT, Greater KL and other infrastructure projects which are expected to have high impacts. These are expected to have strong impact in terms of economic growth, job creation, improving the standard of living and increase the income level of our people. These initiatives will attract foreign direct investments, expand our growth and increase purchasing power as well as improve our infrastructure and accessibility. All these could potentially improve property values further.
After a rather turbulent year of natural disasters, it is my fervent hope that 2012 will be a calmer and prosperous year for everyone.
The 2012 CEO Outlook series started on Dec 19 and will run every day into January next year. The Edge Financial Daily has so far interviewed Geoffrey Briscoe of BMW Malaysia, Tan Sri Teh Hong Piow of Public Bank Bhd, Jeffrey Chew of OCBC Bank (M) Bhd, Osman Morad of Standard Chartered Bank Malaysia Bhd, Yvonne Chia of Hong Leong Bank Bhd, Tan Sri Lee Oi Hian of Kuala Lumpur Kepong Bhd and Datuk Kelvin Tan of TSH Resources Bhd.
This article appeared in The Edge Financial Daily, December 29, 2011.
Leong: Having achieved more than RM2 billion in sales for 2011, we want to continue the momentum and have set a sales target of RM2.5 billion for 2012.
We are optimistic that we can continue our strong sales momentum as our products cater to market needs and are well sited in strategic locations.
Furthermore, we offer products with good concepts in strategic locations, and with our complete range of properties, we can meet buyers’ needs on many levels and for multiple purposes.With 36 landed residential, high-rise, commercial and industrial developments in our stable, we have a property to meet every need.
As for the property sector outlook, property investments have proven to be a reliable asset class. The key drivers that will continue to sustain and drive this sector will be our young population base, new household formation, high saving rates, low unemployment market and strong economic growth.
Looking at individual segments of the property market, products below RM1 million should do well, and demand should be maintained at the same momentum for products above RM1 million if they are in good locations.
We see continued demand for landed residential properties in good locations, especially in gated and guarded schemes. We also believe that smaller units of serviced apartments which are affordable, yet meet the buyers’ needs will be in demand.
For the commercial segment, smaller SoHo and SoVo properties will continue to be popular due to the affordable price points and the lack of such supply in selected locations, especially in integrated development projects.
Besides location, buyers will focus on the design concept, security, lifestyle, environment, community, amenities and accessibility when acquiring a property.
What impact, if any, do you expect from the euro crisis?
Should the European crisis be prolonged, sentiment may be affected and we are all hoping for a soft landing. At the moment, Malaysia is still projecting a minimum 5% growth in GDP this year and 5% to 6% for next year.
The property market in Malaysia is mainly driven by domestic consumption. For Mah Sing, most of our buyers are locals who are buying for own stay and investment, not speculation.
Thus, there will continue to be demand for these products. These are serious buyers who will still go for properties in good locations and concepts by branded developers.
Judging from our recent preview of M Residence@Rawang, the take-up is still good for products that meet market needs. Over one single weekend, 228 units of link homes valued at RM102 million were taken up in this new township.
These were beginner homes priced from RM360,800 to approximately RM500,000 and meet the current need for quality housing at an accessible entry level.
Will BNM’s recent tightening of consumer borrowings have an impact?
Historically, the tightening of consumer borrowings or an increase in interest rates (if any) does not have a significant correlation with property purchases.
Leong says 2011 has been a very good year for Mah Sing.
In Malaysia, property demand is mainly driven by two things — job security and sentiment.
On a fundamental level, our young population base, new household formation and high saving rates will continue to drive demand for properties. Furthermore, property has always been seen as a good hedge against inflation.
So we look at these two things. In terms of job security, our unemployment is very low, only 3%, and people generally have job security.
We believe that at this juncture, it is more on sentiment, and branded developers offering products that meet market needs in good locations will still see good take-up rates. Developers need to be sensitive to market demand to prevent any mismatch in demand and supply when planning their launches.
What is the company’s plans and focus for 2012?
We hope to achieve another bumper year in 2012, and will focus on launching projects that meet market needs and expectations to support our sales target of RM2.5 billion.
We shall create our market by tapping the pent-up demand of selected sectors and would include new phases in existing projects like Icon City (Petaling Jaya), M City (Jalan Ampang), Icon Residence Mont’ Kiara, Kinrara Residence (Puchong), Garden Residence (Cyberjaya) and Garden Plaza (Cyberjaya), as well as new projects like M Residence@Rawang, all located in the Klang Valley.
Having done very well with iParc@Bukit Jelutong, which was recently named the Best International Industrial Development, we intend to roll out Mah Sing iParc@Iskandar with the same concept in Johor Baru. We will also continue marketing our Sierra Perdana, Sri Pulai Perdana and Austin Perdana (Austin Suites serviced residences) in Johor Baru.
As for Penang island, purchasers can look forward to the maiden previews or launches of Southbay Plaza @Southbay City, Icon Residence Penang and Ferringhi Residence, as well as select units from the Legenda@Southbay bungalow project.
We will continue to be very market-driven, and ride on our branding and expertise to offer niche products which are of good design and value. We shall also focus on and enhance the development appeal of our projects for greater returns to the group and buyers of our properties.
So far, we have met and exceeded market expectations in both sales and financial performance. 2011 was a very good year for us, and we look forward to an even better year in 2012. We have very strong earnings visibility, with unbilled sales of approximately RM2.14 billion as at Sept 30. This is more than twice the revenue we recognised from property development for the whole financial year 2010.
We will also look out for more good landbank even though our unbilled locked-in sales and remaining GDV is estimated at more than RM15 billion and should last the group for five to seven years. We are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth.
What is your personal wish list for 2012?
I look forward to the smooth implementation of the MRT, Greater KL and other infrastructure projects which are expected to have high impacts. These are expected to have strong impact in terms of economic growth, job creation, improving the standard of living and increase the income level of our people. These initiatives will attract foreign direct investments, expand our growth and increase purchasing power as well as improve our infrastructure and accessibility. All these could potentially improve property values further.
After a rather turbulent year of natural disasters, it is my fervent hope that 2012 will be a calmer and prosperous year for everyone.
The 2012 CEO Outlook series started on Dec 19 and will run every day into January next year. The Edge Financial Daily has so far interviewed Geoffrey Briscoe of BMW Malaysia, Tan Sri Teh Hong Piow of Public Bank Bhd, Jeffrey Chew of OCBC Bank (M) Bhd, Osman Morad of Standard Chartered Bank Malaysia Bhd, Yvonne Chia of Hong Leong Bank Bhd, Tan Sri Lee Oi Hian of Kuala Lumpur Kepong Bhd and Datuk Kelvin Tan of TSH Resources Bhd.
This article appeared in The Edge Financial Daily, December 29, 2011.
