Lim: For affordable housing projects ... the margins won’t be good, but we definitely can sell them and they will enhance cashflow.

KUALA LUMPUR: Property developer LBS Bina Group Bhd is targeting a 26% year-on-year growth in sales to RM1.8bil this year, underpinned by the launch of a number of affordable housing and landed projects with a total gross development value (GDV) of RM2.19bil.

Despite the current slowdown in the local property market, the growth margin is still larger than the 15% year-on-year sales growth the company achieved between 2017 and 2016.

Group managing director Tan Sri Lim Hock San said he is optimistic about the company’s sales target this year, despite admitting that affordable housing projects tend to generate lower profit margins, compared with other types of developments.

“For affordable housing projects ... the margins won’t be good, but we definitely can sell them and they will enhance cashflow,” he said during a media briefing yesterday.

LBS Bina achieved sales totalling RM1.426bil in 2017, with total GDV of RM2.327bil. The company achieved sales totalling RM1.24bil in 2016, a 21% growth from RM1.02bil in 2015.

Lim said LBS Bina will be launching more landed projects in 2018.

“About 40% of the properties will be landed properties,” he said, adding that he is positive about the outlook for the local property sector this year.

“Back in 1993 to 1995, people believed that the property market bubble would burst. But it didn’t happen.”

Likewise, Lim said the property market will not crash this year.

“It won’t happen. In Malaysia, most people buy a house to live in, not for speculation.”

On a separate issue, Lim said the company has no plans to acquire another mall, after it purchased M3 Mall in Gombak.

“We have no plans to buy another mall. The bulk of the catchment area within M3 Mall comprise Bumiputera citizens, and LBS Bina intends to build affordable homes in the area, which would be ideal for the population there.”

In September last year, the company announced that it was buying Gerbang Mekar Sdn Bhd, the mall owner and operator of M3 Mall, for which it will be paying RM105mil.

The mall, which was fully developed in the third quarter of last year, has a market value of RM107mil.

For its third quarter ended Sept 30, 2017, LBS Bina’s earnings rose 26% to RM25.9mil compared with RM20.5mil a year ago.

Revenue climbed to RM351mil from RM245mil previously.

For the nine-month period ended Sept 30, 2017, the company’s net profit grew to RM79.1mil from RM57.5mil, while revenue increased to RM955mil from RM671mil a year earlier.

LBS Bina currently has a landbank of 4,110 acres with total future GDV of RM29.04bil.

These include ongoing developments comprising 304 acres and a remaining 3,806 acres reserved for future developments.

The plots of land are in the Klang Valley (43%), Johor (40%), Perak (11%), Pahang (5%) and Sabah (1%). As at Dec 21, 2017, the company’s unbilled sales stood at RM1.523bil.