Property

KUALA LUMPUR: The Malaysian property sector is expected to continue growing with the number of potential infrastructure projects, active land transactions and an influx of investments in the pipeline, especially those revolving around green energy, data centres and the manufacturing sector. RHB Investment Bank (RHB IB) said developers with sizeable landbank and industrial segment exposure should see greater benefits from infrastructure developments and rising investment flows. “We expect the property sector to continue to be driven by positive news flow on potential infrastructure developments such as the Kuala Lumpur-Singapore high-speed rail (HSR), Johor Bahru light rail transit (LRT) and Penang LRT, active land transactions (particularly in Iskandar Malaysia) and the influx of foreign direct investments and expansion by local manufacturing players,“ it said, adding that pump priming across the Klang Valley, Iskandar Malaysia and Penang region should lift the sector’s overall valuation. The research house also noted that most developers – apart from UEM Sunrise Bhd, Sime Darby Property Bhd and SP Setia Bhd – are turning more optimistic with a 10-15 per cent higher sales target for the 2024 financial year (FY24). So far, the property sector has appreciated about 18 per cent year to date. “Although UEM Sunrise has set a lower sales target of only RM1 billion versus the RM2.1 billion achieved in FY23, we think the company may have something more exciting ahead, as its management has just revealed a revised masterplan for Gerbang Nusajaya, which saw a significantly higher proportion of industrial development,” the research house noted. According to RHB Research, aggregate property sales in the fourth quarter (Q4) of 2023 were flat year-on-year (YoY) and down by only 5 per cent quarter-on-quarter (QoQ) due to stronger sales in Q2 and Q3. On a full-year basis, it said that aggregate property sales rose 19 per cent YoY to RM19 billion versus RM16 billion in 2022. “IOI Property Group Bhd (IOIPG), Mah Sing Group Bhd and Sunway Group saw encouraging growth in property sales from the Johor region last year,” the report said. “This reaffirms our bullish view on the property sector. Demand is expected to pick up strongly as interest rates stabilise and economic growth improves, supported by favourable government policies, such as the easing requirements for Malaysia My Second Home programme and new infrastructure projects concentrated in Johor,” it said. RHB Research has maintained an ‘Overweight’ call on the property sector with top picks UEM Sunrise, IOIPG and Eastern & Oriental (E&O).

KUALA LUMPUR: Kimlun Corporation Bhd’s forward earnings trajectory is expected to improve after turning in poor FY23 earnings, backed by the gradual execution of its RM2.2 billion orderbook, the highest tally since listing. Hong Leong Investment Bank Bhd (HLIB Research) considers Kimlun’s replenishment targets conservative, considering multiple factors pointing to the upside. The bank-backed research firm said its record in Johor and Sarawak helps this end. HLIB Research said Kimlun’s post-sluggish FY23 with core profit after taxation and minority interests (PATAMI) of RM7.1 million, which was down 80.6 per cent year-on-year (YoY), the trajectory is expected to reverse in FY24. “Both construction and precast segments were transitioning between old and new projects. “We believe missing earnings expectations for three consecutive quarters (Q1-Q3 of 2023) resulted in it being a relative laggard among ‘Johor themed’ stocks. Going forward, Kimlun expects decent performance in FY24 before delivering numbers in FY25 – more reflective of its RM2.2 billion orderbook. “We gather that the RM780 million SSLR Lawas-Long Lopeng road project has reached a completion rate of about 25 per cent. With the site-clearing phase effectively completed, the project will move into the active execution phase. “We believe the successful execution of its current peak orderbook could serve as a treating catalyst,” HLIB Research said in a report. HLIB Research also noted that as of December 31, 2023, the unbilled orderbook stood at RM2.2 billion. This does not include the RM133.6 million contract for a landed residential project in Johor Bharu secured in January this year. Construction forms the bulk or orderbook at RM1.9 billion, while precast manufacturing is RM300 million. HLIB Research said that despite a lower proportion from manufacturing, the segment typically commands an average group profit margin that is 3x higher than that of construction. “We note that the RM2.2 billion orderbook tally matches Kimlun’s highest since listing, last achieved in FY18. “During its better days, the orderbook ranged between RM1.5 billion to RM2.2 billion while core PATAMI ranged between RM58.4 million to RM81.9 million,” HLIB Research said. The research firm noted that Kimlun is looking to expand its precast manufacturing capacity by 20-25 per cent and could deploy capital of RM40-RM50 million. The additional capacity in Ulu Choh, Johor, will come online in the third quarter (Q3) FY24. “We attribute this expansion to higher demand for industrialised building system (IBS) components, demand from data centres, impending infra upcycle in Singapore mass rapid transit (MRT) Cross Island Line (CRL) Phase 2 and 3, Changi T5, Tuas Ports and mega projects rollout in Malaysia. “While there will be associated start-up costs, the expansion is timely to ride on the coming infra upcycle in Johor and Singapore,” HLIB Research noted. The research firm has maintained a Buy call for Kimlun with a target price of RM1.38 a share, a reasonable range for a small-cap contractor. “We reckon FY25 earnings better captures earnings potential from its strong orderbook. “At current market valuation, Kimlun trades at near 50 per cent price-to-book (P/B) multiple discount to the KLCON Index consistent only with periods of sector down-cycle. “The company is a proxy to infrastructure rollouts in Malaysia and Singapore,” it said.

KUALA LUMPUR: Property developer Gamuda Land and Samsung Malaysia Electronics have collaborated to redefine modern living by integrating cutting-edge artificial intelligence (AI) technology into homes, enhancing convenience and significantly reducing carbon footprints. Under the partnership, Gamuda Land and Samsung will collaborate to furnish Gamuda Cove’s The Camellia show unit with the comprehensive Samsung Bespoke AI ecosystem, the first in Malaysia. Gamuda Land chief executive officer Chu Wai Lune recognises that, as a township developer, the company must create townships that will last. “We meticulously design our masterplan components with sustainability at the forefront. Our homes are thoughtfully prepared for the future, being solar-ready with pre-installed conduits for seamless solar panel installation. “Recognising the significance of sustainable living, we are excited to collaborate with Samsung, a renowned leader in the market for sustainable and smart home appliances, to further enhance the eco-friendly infrastructure already in place at Gamuda Cove,” he said in a statement. Chu said Gamuda Land remain committed to pushing the boundaries of innovation in sustainable living, and this collaboration exemplifies its dedication to creating smarter, more efficient homes that align with the needs of modern consumers. “By integrating AI technology into our smart home systems, we can provide better value to our homeowners. This is facilitated by the fact that Gamuda Cove is a 5G-ready township, which opens up new possibilities and opportunities for smart city planning. “It enables us to monitor, manage, and control devices remotely and to create new insights and actionable information from massive streams of real-time data,” added Chu. Samsung Malaysia Electronics president Denny Kim said Samsung is harnessing the power of AI to unlock new and impactful experiences that make life better and simpler for all. “We are pleased to collaborate with Gamuda Land to demonstrate the capabilities of our Bespoke AI appliances to homeowners, enabling them to enjoy the advantages of an intuitive and connected home environment,” he said. Samsung’s Bespoke AI Home offers future homeowners an opportunity to enhance their lifestyles by streamlining household chores and enabling them to prioritise personal activities. With AI-driven energy management, personalised recommendations based on user behaviour, and seamless integration with various smart devices such as refrigerators, washers, air conditioners, vacuums, and TVs, homeowners can enjoy heightened convenience and efficiency. The Bespoke lineup features intelligent functions like AI Energy Mode to optimise energy consumption, AI Wash for tailored laundry cycles, and AI Pro Cooking remotely monitoring oven-cooked dishes. Continuously learning from users’ habits, Bespoke AI adapts appliance performance to provide customised services that cater to individual preferences and needs. “In envisioning Gamuda Cove, our aim was to create a township that can stand the test of time. At the core of smart cities lies the seamless integration of urban functions like digital, infrastructure, mobility, environmental monitoring, safety and security, energy systems, sport and recreation, waste, and sustainability management. “This interconnectedness leverages data to enhance services, elevate living standards, and promote environmental sustainability. With AI, the possibilities are endless,” Chu said. He said deploying IoT devices such as surveillance cameras, smart street lighting, and emergency response systems can make neighbourhoods safer and improve community well-being. Additionally, he said AI can aid in the creation of smart parking systems, streamlining the search for available parking spots through real-time data from sensors and cameras. Moreover, AI-driven predictive maintenance systems can enhance the upkeep of mobility infrastructure such as roads, bridges, tunnels, and highways by analysing data to forecast maintenance needs, thereby preventing accidents and minimising downtime. Leveraging AI and 5G technology, Gamuda Land is exploring the integration of 5G-connected smart grids into their townships. This initiative aims to boost energy efficiency, promising a substantial decrease in energy consumption for sustainable long-term development.

KUALA LUMPUR: Eco World Development Bhd’s (EWD) first quarter (Q1) FY24 net profit was RM69.6 million, which was within Public Investment Bank Bhd’s (PublicInvest) and consensus full-year estimates. PublicInvest noted that the property developer secured RM1.26 billion in pre-sales in 4 months, with 57 per cent or RM723 million from Iskandar Malaysia, or about 36 per cent of its FY24 sales target of RM3.5 billion. The strong sales momentum increased EWD’s unbilled sales to RM3.88 billion as of February 2024, PublicInvest noted. Separately, PublicInvest said that EWD’s share of results of its joint ventures for Q1 FY24 was 9.4 per cent higher year-on-year (YoY) due to Eco World International Bhd (EWI) recording a profit instead of a loss during the quarter. EWD’s gross and net gearing levels as of January 2024 remained low at 0.52x and 0.28x, respectively, even after completing the 403.78-acre Kulai land acquisition (balance 90 per cent land price of RM190 million) and paying its FY23 final dividend, amounting to RM58.9 million, to shareholders in Q1 2024. On sales, PublicInvest noted that EWD’s FY24 sales target is within reach. Sales momentum continued into Q1 FY24, with about RM1.26 billion secured in four months. “We understand that its projects in Iskandar Malaysia have performed well, with about RM723 million secured or 57 per cent of EWD’s total year-to-date (YTD) sales for FY24,” PublicInvest noted. Currently, EWD has eight ongoing projects in Iskandar Malaysia. Sales of residential homes remain the biggest contributor for the company, with Eco Townships and Eco Rise Pillars bringing in RM799 million or 63 per cent of total sales. These include sales from new launches of landed homes at Eco Spring and Eco Tropics in Iskandar Malaysia as well as Eco Grandeur in the Klang Valley. “EWD also recently launched Sa.Young D’ Eco Botanic in Iskandar Malaysia which we understand is well received by the market. “Going forward, the company is preparing for the launch of Se.Duduk D’ Kajang, which is its first duduk apartments to be developed outside an EcoWorld township,” PublicInvest said. Relatively, EWI secured RM243 million in property sales plus reserves of RM203 million, adding up to a total of RM446 million for the first four months of FY24. This was driven mainly by Embassy Gardens, which brought in RM105 million in sales, followed by Wardian (RM75 million) and Yarra One (RM20 million). “We understand that as of February 29, 2024, EWI has approximately RM650 million of completed and nearly completed stocks available for sale, of which the company’s effective share is approximately RM500 million,” PublicInvest noted. The research firm said completed stock sales are estimated to generate excess cash up to RM500 million for EWI over 2024 and 2025. Separately, the company has 18 existing and upcoming projects in the United Kingdom and Australia, with a total gross development value of GBP4.6 billion and A$0.7 billion, respectively. “We keep our earnings unchanged and maintain our Neutral call. Our target price increased to RM1.30 from RM1.15 previously as we narrowed the discount to book value to 20 per cent from 30 per cent as sector valuations improved. “We believe it deserves a premium given its strong sales track record and attractive dividend yield,” PublicInvest said.

KUALA LUMPUR: Melaka-based property developer Teladan Group Bhd’s (TGB) wholly-owned subsidiary Riverwell Resources Sdn Bhd (RRSB), signed a memorandum of understanding (MoU) with Melaka Corporation (MCorp) to develop a 341.2-acre German Technology Park at Ayer Panas, in Jasin, Melaka. The project aims to attract German investment into Melaka and strengthen Malaysia-Germany economic ties. It encompasses various industrial developments, including industrial bungalow lots, semi-detached factories, shop offices, and centralised labour quarters. Under the MoU, both parties will collaborate on feasibility studies and development planning for the project. The agreement seeks to leverage TGB’s construction expertise and its landbank located along Jalan Gapam. MCorp, the Melaka state government development agency, will lead the development and sales of the Project. Melaka chief minister Datuk Seri Utama Ab Rauf Yusof said this collaboration strengthens Malaysia’s position as a preferred investment destination within ASEAN and deepens economic ties with Germany. “The project aligns with the government’s economic growth initiatives by promoting industrial advancement and attracting high-tech industries to Melaka. “By leveraging Malaysia’s strategic location in Southeast Asia and its robust infrastructure, we aim to drive Melaka’s industry, business, and trade forward. “The project represents a significant step towards advancing international trade activities, creating job opportunities, and broadening the country’s market access. “At MCorp, we are committed to supporting Malaysia’s economic growth and development,” he said in a statement. Ab Rauf Yusoh and the ambassador of the Federal Republic of Germany Dr Peter Blomeyer graced the recent signing ceremony. This project builds on the robust trade relations between Malaysia and Germany, which have flourished over the past decade. Germany has remained Malaysia’s top trading partner in the European Union, while Malaysia is now Germany’s largest trading partner in Southeast Asia. Furthermore, Malaysia remains an attractive destination for foreign direct investments (FDIs), with German companies investing EUR€8.5 billion (RM43.61 billion) as of 2023. TGB managing director Richard Teo Lay Ban said the company is confident in its contribution to this project’s success, given its proven track record of developing over RM2.9 billion in combined gross development value (GDV) across residential, commercial, and industrial projects. “Looking ahead, we are optimistic about Melaka’s economic trajectory, driven by the 2024 Budget’s focus on enhancing Melaka’s competitiveness and the government’s commitment to positioning the state as a global tourism hub and trade and investment centre. “With TGB’s deep experience in Melaka, we are well-positioned to explore new development opportunities and unlock significant long-term commercial value,” he said. As of December 31, 2023, TGB holds 1,071.5 acres of undeveloped land, a significant portion of which is located in Melaka. This land has a potential GDV of RM2.7 billion.

KUALA LUMPUR: Kwasa Land Sdn Bhd, the master developer of Kwasa Damansara and  a wholly-owned subsidiary of the Employees Provident Fund Board (EPF), has partnered with Impiana Land and Development Sdn Bhd (Impiana) on a new residential development in the township. The project, Impiana’s second in Kwasa Damansara, will entail the construction of landed homes, as well as low and mid-rise condominium on a land area of approximately 47 acres. Coined as Serene Kwasa Damansara, the project will be spread across three plots with a gross development value (GDV) of RM1.5 billion. The project will be delivered in phases, with the first phase expected to be completed in the fourth quarter (Q4) of 2028. Formerly the site of the renowned Rubber Research Institute, the first and largest of three plots retains its heritage. Kwasa Land managing director Datuk Adenan Md Yusof said the company is pleased to partner with Impiana again on their second development within Kwasa Damansara. “It will be developed with surrounding green spaces, great connectivity to transportation networks, and also designed with the family unit in mind, meeting the lifestyle needs of Malaysians today. “Serene Kwasa Damansara will complement our efforts as the master developer, boosting the value of this township. “We look forward to offering various residential offerings with Impiana, leveraging their vast experience in high-quality development equipped with top- notch facilities,” he said in a statement. Serene Kwasa Damansara’s Serene South Lakes offers 141 neo-colonial-themed homes, including bungalows, link villas, and semi-detached homes. Perched on sloping terrains, these homes command scenic vantage views of the lake. The second phase measuring 4.6 acres, The Park, will consist of two modern tropical-themed mid-rise blocks of 311 units with facilities amid lush landscapes and refreshing greenery. The Serene Hillside is a 12-acre hillside plot comprising four blocks of low and mid-rise condominiums with 468 units surrounded by greenery. Serene Kwasa Damansara can offer vistas and vantage viewpoints to its future residents. It will be developed in a conducive, green environment, offering dedicated clubhouses, swimming pools, and landscaped gardens. Neighbouring mature neighbourhoods such as Tropicana Indah, Ara Damansara and Kota Damansara, the project is also close to future commercial centres, retail and dining offerings, and two mass rapid transit (MRT) stations connected directly to the Putrajaya and Kajang lines. Impiana managing director Datuk Haris Onn Hussein believes a home must be more than a building. “It has to be a space generous enough for life to expand and grow, enclosed in structure but open in spirit, to nurture a lifetime of cherished memories. “We are excited to be a development partner to Kwasa Land as we embark on a dynamic and future-forward residential development at Kwasa Damansara, a burgeoning location in the Damansara region – one where we see people converge to live, work and play as an attractive address and neighbourhood,” he said. Impiana’s maiden project in the township is known as Linari Damansara. Sitting on an 8.9-acre site, the development consists of two towers housing 480 units of condominiums and 16 units of Park Homes. Linari is positioned to offer a mass-transit-oriented lifestyle adjacent to the Kwasa Damansara MRT station. Once completed, it will offer residents a dedicated security entrance and pedestrian walkway to the station. Linari is planned with a host of features and facilities, including a community garden, lap and kid’s pools, jogging and cycling trail, BBQ area, gym, yoga lawn, and many more. It will be launched this year and is expected to be completed by 2027.

KUALA LUMPUR: Domestic property companies are setting higher new sales targets to express optimism about the outlook for the financial year 2024 (FY24). MIDF Research said Sunway Bhd targets to achieve new sales of RM2.6 billion in FY24 after recording new sales of RM2.4 billion in FY23. Similarly, Mah Sing Group Bhd is setting a higher new sales target of RM2.5 billion for FY24 after hitting new sales of RM2.26 billion in FY23. “SP Setia recorded bumper new sales of RM5.1 billion in FY23, including land sales of RM836 million. “Excluding land sales, new property sales are estimated at RM4.2 billion in FY23 as SP Setia is setting a new sales target of RM4.4 billion for FY24,” the research firm said in a report. Eco World Development Group Bhd has set a sales target of RM3.5 billion for FY24. MIDF Research, quoting Bank Negara Malaysia (BNM) loan data, said the total loan application for property purchase in 2023 was higher at RM605.3 billion, up by 5.7 per cent year-on-year (YoY). The data said the higher loan application was supported by stronger demand for property as the outlook for the property sector improved. Further, it noted that BNM’s pause in the Overnight Policy Rate (OPR) hike since July 2023 had also underpinned the recovery in buying interest on property. Meanwhile, loan application data is off to a good start in January 2024 as it was higher at RM51 billion, up by 46.5 per cent YoY, as buying sentiment on property remains healthy. “Moving forward, we maintain our  view that demand for properties would be stronger in 2024 as the landscape for the sector is improving,” MIDF Research said. Further, BNM data also showed that the approved loans for the purchase of  property was strong at RM261 billion, up by 7.3 per cent YoY in 2023, driven by the higher loan application in 2023. Besides, the higher percentage of total approved loans over total applied loans of 43 per cent in 2023 against 42 per cent in 2022 had also lifted the approved loan in 2023. Meanwhile, approved loan data in January this year remained encouraging as it grew by 40.8 per cent YoY and 14.1 per cent month-on-month (MoM) to RM20.4 billion, driven by the higher loan application. MIDF Research said the higher approved loan bodes well for new sales outlook for property developers. MIDF Research also noted that for the recently concluded earnings reporting season, four out of six property companies reported earnings that came in within expectations namely Sunway, Matrix Concepts Holdings Bhd, UOA Development Bhd and Mah Sing. Meanwhile, SP Setia reported earnings that came in above expectations as earnings in FY23 were lifted by land sales gain of RM110 million and better margin, MIDF Research noted. “On the flip side, earnings of IOI Properties Group Bhd missed expectations as earnings contribution from China was weaker than expected. “Meanwhile, property companies that concluded FY23, namely Sunway, SP Setia, Mah Sing Group and UOA Development, reported higher new sales in FY23,” MIDF Research said. Touching on overhang units, MIDF Research said data released by the National Property Information Centre (NAPIC) showed residential overhang increased marginally to 25,816 units in the fourth quarter (Q4) of 2023 from 25,311 units in the third quarter (Q3) of last year. Perak had the highest number of residential overhangs, at 4,598 units in Q4 2023, up from 3,625 units in Q3 2023. Meanwhile, Johor has the second-highest residential property overhangs at 4,228 units in Q4 2023, which declined from 4,500 units in Q3 2023. Kuala Lumpur has the third-highest residential property overhangs at 3,535 units in Q4 2023, an increase from 3,111 units in Q3 of the same year. “Despite the marginal increase in the overhang, we think that the overall declining trend in overhang eased concern on oversupply of property. “Note that the residential property overhang of 25,816 units in Q4 2023 was lower than 27,746 units in Q4 of 2022 and 36,863 units in Q4 of 2021,” MIDF Research said. MIDF Research maintains a Positive stance on the property sector and remains sanguine about the outlook for property companies. The research firm said buying sentiment on properties is expected to remain healthy going forward as the property sector’s landscape improves. New sales of property companies are improving, which should translate into better earnings visibility going forward, it said. “Our top picks for the sector are Mah Sing (Buy with a target price of RM1.12) and Matrix Concepts (Buy with a target price of RM1.91). “We like Mah Sing for its quick turnaround strategy and high exposure to affordable homes via its M series projects. “Besides, its growing presence in the industrial property segment will support earnings growth in the medium to long term. “Meanwhile, we like Matrix Concepts as its new sales remain encouraging while landbank expansion in Labu, Negeri Sembilan, will further buoy earnings growth. Besides, the dividend yield of Matrix Concepts is attractive at 5.6 per cent,” MIDF Research said.