Hap Seng Land Sdn Bhd, a wholly-owned subsidiary of Hap Seng Consolidated Bhd, expects double-digit revenue growth in the financial year ending Jan 31, 2009.
"Our revenue comes from housing project developments in Sabah and the rental from Menara Hap Seng. The office tower of Menara Hap Seng has been fully occupied, while 80% of The Podium (retail complex) has been rented out.
"Tenants are coming in and The Podium will be fully taken up by year-end," its property division's chief executive Datuk Paul Ng told The Edge Financial Daily yesterday.
The leading property developer in Sabah has developed the state's biggest township, Bandar Sri Indah, on 1,368 acres of the company's former oil palm estates.
The division contributed 8.5% or RM191 million to the group's revenue of RM2.24 billion in the last financial year ended Jan 31, 2008. It is a 15.5% increase from the RM165.3 million a year earlier.
Meanwhile, in the financial year ended Jan 31, 2008, its operating profit increased 4% to RM39.6 million from RM38 million. It accounted for 10% of the group's operating profit of RM395.7 million.
"Our revenue and profits have been improving. Given the track record, we are positive that the company would be able to contribute more to the group's revenue in the coming year," Ng said.
Hap Seng Land has submitted two applications to Kuala Lumpur City Hall (DBKL) for commercial developments on its land in Jalan Tun Razak and Jalan Klang Lama.
"We will build offices on the 1.27 acres in Jalan Tun Razak. The application was submitted in the middle of this year. We can build an office block of a maximum 20 storeys," Ng said.
As for the two adjoining parcels of land of 2.6 acres and 1.8 acres in Jalan Klang Lama, the company will build an office block with a retail complex. The application was submitted early this year. "We hope to get the approval from DBKL by year-end," Ng said.
He also said the company expects to launch a residential development in Puchong by the second half of next year.
"We will develop the project on the build-then-sell concept and launch it (the sales) after we get the CF (certificate of fitness)," he added.
The project, involving 78 acres of housing land and 12 acres of commercial land, is divided into five phases. Phase 1 consists of 450 units of two-storey link houses and two-storey semi-detached cluster houses.
Ng said the project, with gross development value (GDV) of at least RM500 million, will also comprise bungalows, condominiums, middle-cost apartments and commercial buildings.
Asked if Hap Seng Land would pass on the higher building material cost to buyers, Ng said the company would minimise wastage to offset the higher prices as well as to purchase the raw materials in bulk.
"Even though we increase the house prices, we would install extra facilities such as an alarm system for the buyers," he said, adding that construction cost had increased by 18%-20%.
He noted that raw materials and labour constituted 75% to 80% of overall building cost.
Ng said: "We are still eyeing land and existing buildings (in the Klang Valley), but nothing is concrete yet. Our priority is in the Golden Triangle." He added that Hap Seng Land has a landbank of 3,000 acres.
On Budget 2009, he hopes the government will table a "people-friendly" budget that includes a waiver of stamp duty on house purchase for the lower-income group and first-time buyers.
Source: The Edge Daily
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