L&G plans RM788mil apartment project

PETALING JAYA: Land & General Bhd (L&G) plans to launch its second Ampang serviced apartment project by the end of this year or early next year, having obtained shareholder approval.

The joint-venture (JV) project with the Malaysia Land Properties Sdn Bhd (Mayland) group has a gross development value of RM788mil.

With a gross development cost of RM558mil, L&G should see an estimated profit of RM230mil from this project in its 2015 financial year.

Managing director Low Gay Teck said the project would not contribute to the group’s revenue in the current financial year.

“We are launching the project later this year or early next year. Hence, there will be no financial impact in the 2014 financial year ending March 31,” he told the media after its EGM.

The long period before the launch, he said, was due to some amendments the group had in mind for the design and planning of the development.

“We are trying to include features like dual-key units and 3+1 bedroom units and are awaiting approval from local authorities,” Low said.

The new development will have four 46-storey apartment blocks and will be launched in two phases.

Low said the group was looking to price the units at about RM900 per square foot.

For the next 15 months, however, the group is targeting to achieve unbilled sales of RM600mil, supported mainly by its Bandar Sri Damansara and Ampang projects.

The group had in January proposed a JV between its wholly owned unit Pillar Quest Sdn Bhd and Mayland’s wholly owned subsidiary Positive Valley Sdn Bhd to develop a 2.29ha land off Jalan Ampang for a total cash consideration of RM118.49mil.

The land is adjoining its Elements@Ampang project. The property developer secured a 100% vote for the JV.

Low said the JV with Mayland followed the successful collaboration between both developers for the Elements@Ampang serviced apartment project.

“Based on our buyers’ profile for Elements, 80% of the purchasers were locals from the 25-to-45 age group,” he said.

On the expected softer property market in 2014, Low said statistics continued to show that the Malaysian population growth outweighed the number of new residential products in the market by six-to-one.

“As a long-term developer, we have to look from a macro perspective. There is no glut.

“Sales may be slow for a while from a knee-jerk reaction, but the actual demand or interest in property has not waned.”