Happy faces:
Property firm signs 99-year lease purchase deal with Iskandar Investment
Mah Sing group MD and group chief executive Tan Sri Leong Hoy Kum (second from left) exchanging documents with Iskandar Investment Bhd (IIB) president and CEO Datuk Syed Mohamed Syed Ibrahim while IIB executive vicepresident, strategic marketing John Ng (left) and Central Johor Baru Municipal Council president Md Fuzi Ahmad Shahimi look on after the signing ceremony yesterday for a mixed development project.
KUALA LUMPUR: Mah Sing Group Bhd will develop a mixed development project with an estimated gross development value (GDV) of RM1.1bil in Iskandar Malaysia, Johor.
To this end, the property developer has signed a 99-year lease purchase agreement for 8.19 acres with the Government’s commercial arm Iskandar Investment Bhd (IIB) for a total consideration of RM74.7mil.
This will come with a gross floor area of 2.14 million sq ft or RM34.90 per sq ft.
“The first 10% (of the land acquisition cost) will be paid upon signing, the rest of the payments are flexible and should come from internal funds,” said group managing director and chief executive Tan Sri Leong Hoy Kum.
Mah Sing has completed seven development projects thus far with 33 ongoing projects located nationwide.
So far, the take-up rate for all of its launched projects stood at 70%, said Leong.
The total unbilled sales and remaining GDV of the company currently stands at RM18.8bil. This provided the company with earnings visibility of up to eight years, Leong said at the agreement signing ceremony between Mah Sing and IIB here yesterday.
“We are very careful with our investments. We do not want to over-gear ourselves and are conscious of our cash flow,” said Leong, adding that the company’s gearing ratio as at June 30 was 0.3 times.
He said Mah Sing was “comfortable” being in Malaysia, when asked whether it was looking to spread its wings overseas.
This latest project called The Meridin@Medini is a stone’s throw away from the newly-opened Legoland Theme Park as well as the upcoming financial hub, Medini Business, according to a press release by Mah Sing.
It will comprise residences, small office versatile offices, retail and corporate towers.
The project would be officially launched in the second half of next year but registration commenced immediately, it added. .
The first phase of the project will offer residences from 500 sq ft to 1,500 sq ft indicatively priced from RM288,000 per unit. The entire development project will be undertaken in three phases over the next five years.
“We are targeting largely Malaysians who are working in Singapore,” Leong said of the first phase.
Currently, most of Mah Sing’s customers were Malaysians, constituting about 90% of its customer base, he added.
Meanwhile in a note issued to clients, AmResearch said it was “very positive on this land-banking deal”.
Apart from the “attractive pricing”, the key point to note was that the remaining 90% of the cost of the land would be paid over a period of five years which would boost its cash flow, it said.
The research outfit noted that Mah Sing would enjoy “healthy margins” from this project – pre-tax profit margins of about 25% – for which it would be exempted from corporate tax for 10 years as well as enjoy a slew of other special incentives, as it has Iskandar Development Region status.
The region is one of the corridors identified for high growth by the Government.