What is the master plan for the land at Ampang Ukay that includes 7 phases of development in term of the Gross Development Value and types of property to be built for each phase?
(page 24 of Annual Report)
• Our master development plan at Ampang Ukay is pending MPAJ approval which consists of Rumah Selangorku, condominium, SOHO, landed property and commercial buildings with a total Gross Development Value (GDV) of approximately RM4 billion.
The Group’s strategies, going forward, is to explore opportunities for future developments, either through outright acquisition of lands and/or projects, or by entering joint ventures and other forms of alliances to expand the Group’s property development portfolio.
(page 24 of Annual Report)
What is the success rate so far in terms of land acquisition or joint ventures with land owners? Please name the successful acquisitions/ventures.
• On 15 October 2020, we have entered into a Sale and Purchase Agreement to purchase a development land with approved Planning Permission (KM) from MBSA located at Cahaya SPK, Shah Alam, Selangor for purchase consideration of RM42 million
• Pending the progress of the regulatory authorities’ approvals, we plan to launch a RM311 million GDV project in 1st Quarter 2021. Further details of the proposed development are contained within the Bursa announcement.
The Group is currently awaiting the outcome of a proposal to build a pedestrian bridge that would link the KVMRT2 station to South City Plaza.
a) When is the Group expected to receive the approval from the relevant authorities?
• Barring unforeseen circumstances, we expect to obtain from relevant authorities including Planning Permission (KM) within 4 months.
b) What is the cost of construction of the pedestrian bridge?
• The cost of construction of the pedestrian link bridge is approximately RM3 million.
c) What is the expected increase in the footfall to the South City Plaza with the completion of the pedestrian bridge?
• There are many factors that influence footfall, including accessibility and also patrons’ preferences in view of the COVID-19 pandemic. The Group expects that not only the South City Plaza’s vibrancy and footfall will be enhanced, the value of properties will also be increased upon the completion of the above pedestrian link bridge.
The Group recorded a much lower sales of completed properties amounting to RM3.1 million in FY 2020 as compared to RM8.9 million in FY 2019. The inventories of completed properties stood at RM22.9 million in FY 2020 as compared to RM25.34 million in FY 2019, a reduction of RM 2.44 million or 9.6%.
a) What are the challenges the Group faced in disposing the completed properties?
• The challenges faced are the following:
i. In view of the market uncertainty, buying sentiment is still poor as the general public
adopt a wait-and-see attitude on new properties;
ii. Developers are competing with the sub-sale market given a decreased market price;
iii. Financial institutions have tightened the property financing due sluggish property
market and weak purchasing power of the consumers.
b) What are the measures the Group has taken to meet the challenges to clear the completed properties and whether the measures have been successful in reducing the units of completed properties?
• The property market will continue to soften in light of the Covid-19 pandemic and a more aggressive marketing approach will have to be adopted such as high incentive for real estate agents, buyers’ referral incentive scheme, low down-payment, zero interest instalment scheme and bulk purchase discounts. It is notable that even though the properties were completed a few years ago, we have been able to gradually sell some completed units in the past two years, attesting to its appeal.
c) Where are the long-aged (i.e. more than 2 years since completion) property units located and what is their value?
• The completed properties aged above 2 years are located at Ipoh, Perak and total selling value of these properties is approximately RM40 million.
The Group reported sales of investment properties amounting to RM8.86 million in FY 2020, a slight increase of RM1.25 million as compared to FY 2019 of RM7.61 million.
(page 97 of Annual Report)
a) Please provide the type and value of the investment properties that have been sold?
b) What is the rental yield from the investment properties prior to the disposal?
c) What is the financial impact of the disposed investment properties to the Group’s financial result?
We refer to Note 5, page 97 of Annual Report, the information disclosed is the component of Cost of Sales instead of Sales.