Kuala Lumpur-based property development companies in Penang are expecting sales contributions from the state to increase significantly for their upcoming financial year amid a tough property market environment.
Eco World Development Group Bhd, Eastern & Oriental Bhd (E&O), IJM Land Bhd and Mah Sing Group Bhd are some of the Kuala Lumpur-based property companies expecting strong contributions from the state.
Mah Sing, for example, is projecting for Penang to contribute 9% of its revenue for the fiscal year ending Dec 31, 2016 compared to 1% for the previous financial year.
Says group managing director Tan Sri Leong Hoy Kum: “With no project launches in 2015, our properties in Penang contributed 1% or RM26mil to our total sales of RM2.3bil last year, leveraging on the take-up for projects launched before 2015.
“The group has set a target of RM2.3bil for 2016 for all our properties (throughout the country) and Penang is expected to contribute 9% of the revenue for the (current financial) year.
“With the value of the ringgit at an attractive level, we foresee strong buyer interest, particularly from foreigners, who represent 30% of our purchasers in Penang, as well as locals,” says Leong, who is also the CEO of the group.
Ferringhi Residence in Batu Ferringhi and Southbay Plaza in Batu Maung, both on the island, performed well in 2015, says Leong, with take-up rates of 92% and 96%.
Mah Sing plans to launch Ferringhi Residence 2, a high-end condominium project in Batu Ferringhi, in the second half of 2016, while the Southbay Plaza, a mixed-development project, will be completed this year.
Eco World expects its projects in Penang to generate about RM600mil this financial year ending Oct 31, 2016, compared to RM200mil in the previous year.
Its general manager Khoo Teck Chong says the targeted revenue for the 2016 financial year is RM4bil, compared to RM3bil in 2015.
“The contribution in Penang would come from Eco Terraces in Paya Terubong, which is 40% sold, Eco Bloom, scheduled to be launched in June, and the first phase of Eco Marina, scheduled for launching in October 2016.
“The Eco Terraces and Eco Bloom are priced respectively at over RM850,000 and below RM400,000, which are still considered as affordable by the locals, given the strategic locations of the projects,” he says.
IJM Land is expecting its projects in Penang to generate RM240mil to the revenue for the current financial year ending March 2017, compared to RM168mil in the last financial year.
Its senior general manager Datuk Toh Chin Leong says the projects planned for launch this year are The Trehaus (with a gross development value or GDV of RM64.7mil) in Bukit Jambul, The Senjayu (RM69mil GDV) in Jawi, South Seberang Prai, and The Waterside Residence (RM260mil GDV) for the second phase of The Light Waterfront.
“These projects should help the group realise the targeted RM240mil sales,” Toh says.
E&O also expects the contribution from Penang to improve significantly this year compared to a year ago.
Its marketing and sales general manager (Penang) Christina Lau says that given the strong sales of the last financial year in excess of RM1bil, the group believes that there will be sustained interest in its Penang projects comprising existing launches such as 18 East at Andaman, The Tamarind, and its landed super-luxe terraces Amaris and Andorra, which collectively tally an estimated GDV of RM1bil.
“The sale of these properties coupled with upcoming launches on the remaining plots within Seri Tanjung Pinang Phase 1 (STP1) will keep us busy, as STP1 approaches its maturity, evolving since the maiden launch of the Ariza courtyard terrace homes in 2005. “Now in its eleventh year, STP1 has developed into one of Penang’s most preferred addresses with a vibrant community of more than 20 nationalities,” she adds.
Ivory Properties Group Bhd is carrying out RM1.8bil worth of projects on the island this year.
These are the first phase of Penang WorldCity called Tropicana Bay Residences with a GDV of RM933mil, The Wave with a GDV of RM494mil, and The City Residence and City Mall with a GDV of RM313mil.
Group chief operating officer Goh Chin Heng says The City Residence and City Mall and The Wave will be the main contributors to the group’s current fiscal year revenue ending next March 31.
“The City Residence and City Mall is expected to contribute RM40mil, while The Wave, RM90mil.
“Both projects have done very well and should enable the group to achieve better results for the current fiscal year.
“There are only a handful of units left for both projects,” he adds.
Ideal Property Development Sdn Bhd plans to undertake RM2.723bil worth of condominium projects on the island this year.
Of the amount, the group has already launched the RM378mil Summerskye Residences in Bayan Lepas in January 2016.
The upcoming projects, comprising 3,648 units to be launched between May and November 2016, are strategically located in Bayan Lepas in the south-west district, which is close to the Penang International Airport and the first and second bridges.
The projects are Forest Ville (RM495mil GDV) in May, Bukit Ayun Development (RM1bil GDV) in August, Queens Residences (RM550mil GDV) and Amarene (RM300mil GDV) in August.
Besides the Queens Residences and Bukit Ayun Development projects, which will be priced between RM600,000 and RM900,000, the rest of the schemes are priced between RM450,000 and RM600,000.
“Some of these projects are among those that will be injected into Ideal United Bintang Bhd (IdealUBB) this year,” says Ideal Property executive chairman Datuk Alex Ooi. Ideal Property is the parent company of IdealUBB.
Ooi said that while most developers were holding back launches, the group has decided to go ahead with a variety of property products priced between the RM450,000 and RM900,000 range.
According to Ooi, properties within such a price range are still the most marketable, especially if the location is very strategic. - The Star