IOI Properties to launch RM3b worth of projects in FY19

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Source: The Edge
IOI Properties to launch RM3b worth of projects in FY19

KUALA LUMPUR (Oct 31): IOI Properties Group Bhd said it will be launching projects worth a total of RM3 billion in gross development value (GDV) during its current financial year ending June 30, 2019 (FY19) — higher than FY18's RM2.8 billion.

The group's chief executive officer Lee Yeow Seng told reporters after its annual general meeting here today its FY19 sales too could hit a minimum of RM3 billion, lifting bottomline by at least 20%.

According to Lee, the optimism is premised on the strong demand for its projects in China and Singapore.

"Our overseas investments are doing well. In China, our last launch (in September) was almost fully sold out within a day. So we're quite confident our new launches in China going forward will receive very positive response," he said.

He added the group still has projects worth RMB4 billion (approximately RM2.4 billion) there to be rolled out over two fiscal years, which includes mid- to high-rise condominiums and town villas in IOI Palm City, Xiamen.

And in Singapore, Lee said the group will be able tap into the strong interests for prime Grade A office space with its Central Boulevard project that is strategically located within Marina Bay and business district.

"Malaysia's [property market] will still be a little subdued for the time being. We don't expect the market to rebound too quickly until the fundamental problems are adjusted, such as the oversupply of office space and affordable housing across Malaysia," Lee added.

As such, the property group is looking at a 60:40 profit contribution from its overseas and local projects this fiscal year.

Meanwhile, responding to Finance Minister Lim Guan Eng's call for property developers to lower housing prices in Malaysia by up to 10% given the sales and service tax exemption on construction services and building material costs, Lee said the group's upcoming projects are likely to trend higher instead.

He pointed out that the 10% price cut in selling price is challenging, with labour and material costs on the rise.

"We think that it's healthier for our new launches to have a price increase, instead of a drop in selling price. Our house buyers who have bought earlier on would be upset," he added.

At noon break, shares in IOI Properties settled three sen or 2.4% higher at RM1.28, valuing the group at RM6.99 billion.