Kong: We have been lying low for a long time. So it is appropriate to buck up and move up to the next level.
KUALA LUMPUR: Guocoland (M) Bhd, the property arm of Hong Leong Group, wants to beef up its landbank in Greater Kuala Lumpur in order to become a renowned property company and brand in the next five years.
In an interview, group managing director Datuk Edmund Kong said since Guocoland is backed with strong cash reserves from its parent company, acquiring landbank is essential in the property business if it were to expand competitively.
“We have been lying low for a long time. So it is appropriate to buck up and move up to the next level.
“With a strong team now, we can move ahead with our plans once we have the raw materials (landbank) in our portfolio,” Kong said.
The company, which has a market value of RM826.5mil, is targeting RM1bil sales for the financial year 2018 (FY18).
Taking into account land scarcity in Greater KL, Kong said it would only be viable to target pockets of land to create more integrated development projects.
Therefore, future developments in the city fringe will be somewhat similar to the 8.5-acre RM2.5bil GDV Damansara City. That mixed integrated project, located in Damansara Heights, consist of Wisma Guocoland, DC Mall, Menara Hong Leong, Sofitel KL Damansara and DC Residensi.
Kong said it is pertinent to differentiate itself from other developers and focus on planning, execution and timely delivery as part of the branding strategy.
According to Guocoland’s 2017 annual report, property development segment remained the core driver of the group’s revenue stream, followed by property investment, hotel operations and plantation.
Kong said the company is looking to achieve 80% occupancy rate for DC Mall next month.
“Of the total 76 lots, we have 35 food and beverage outlets that are currently occupying the space at the mall,” he said.
Meanwhile, its hotel component – Sofitel – has also been gaining traction since its soft launch in August this year.
On Guocoland’s competitiveness once the RM9bil GDV Pavilion Damansara Heights is operational, Kong said despite the glut in the local office property market, he did not consider it a threat.
“It will complement our business, as our target markets were different,” he said.
“We see this as a good synergy more than a threat. Both developments will be an epicentre of Damansara Heights,” Kong added.
In the meantime, Kong said Guocoland would be launching the 47.36-acre freehold Emerald Hills in Alam Damai, Cheras in December, as part of its emerald brand series.
The project, with a GDV of nearly RM1bil, will have 21 acres of open space, which will be its “unique selling point.”
With construction expected to start in the first quarter of next year, the project comprises 1,378 condominium units with price ranging from RM600 to RM700 per sq ft.
There will also be 181 two and three-storey terraced houses with prices estimated from RM1.1mil to RM1.5mil.
For the financial year ended June 30 2017, GuocoLand’s net profit rose 6.5% to RM126.46mil from RM118.70mil a year ago, on lower revenue of RM285.61mil from RM315.08mil.
The improved earnings was attributed to higher profit contribution from GuocoLand’s associate company.
This is related to the disposal of land located in Sepang, Selangor, while the lower revenue was due to lower contribution from the residential project DC Residensi in Damansara City, partially offset by higher contributions from Oval Kuala Lumpur and PJ Corporate Park.
Guocoland shares closed up one sen, or 0.83%, at RM1.21 last Friday, with 175,900 shares traded.
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