Prinsiptek expanding property ops


PRINSIPTEK Corp Bhd is keen to make a bigger foray into the local and regional property sector to widen its earnings base and to take advantage of the positive property market.

According to executive director Foo Chu Pak, the overseas ventures are strategic to reduce its dependence on local projects and to tap opportunities in neighbouring countries, including Thailand and Laos.

The group has secured a turnkey project from the National Housing Authority of Thailand worth RM194mil and entered into a joint venture to undertake a mixed development in Bangkok with a gross development value (GDV) of RM175mil.

The mixed development by Prinsiptek International Co Ltd planned for launch at the end of the year will comprise double-storey link houses, semi-detached houses, medium-cost apartments and 3½ storey shop offices.

“With the 48.4 acres of freehold project, our land situated in Sriayutthaya Province about 60 km from the heart of Bangkok is more suitable for landed residential property such as bungalows, semi-detached units and terrace houses,” Foo told StarBiz.

“In Bangkok, purchasers prefer convenience, security, facilities and affordable housing which is why studio or one bedroom apartments are the most popular.

“But in the suburban areas, the preference is for landed residential units that are spacious within gated and guarded enclaves,” he added.

The company is already undertaking a turnkey construction project for Thailand’s National Housing Authority of Thailand to build low-cost apartments worth a contract value of RM194mil.

In Laos, Prinsiptek is in advance talks with the landowner of an eight-acre site for a four-phase development.

Locally, Foo said Prinsiptek was eager to build more high-end residential projects, including gated and guarded communities, in the Klang Valley.

“In the next two to three years, property sales will contribute 40% to group earnings compared with 15% now while the share of construction earnings will be reduced,” Foo said.

He said with the expansion of the property division and growing number of projects in its portfolio, the company expected its property sales to double this year.

For the last financial year ended Dec 31, Prinsiptek recorded a net profit of RM18mil on revenue of RM316.4mil. It is targeting a 10% growth in earnings and revenue.

Since venturing into property development five years ago, Prinsiptek has made good inroads in the market.

According to Foo, to reduce holding cost and ensure good cash flow, the company would opt for projects that are small and have fast turnaround time.

“We are looking for good joint venture partners with strategic land bank for development,” he said.

Prinsiptek has a total land bank of 150 acres that have a potential GDV of RM400mil over the next four years.

Presently, it is undertaking 14 property projects in various parts of the Klang Valley and Malacca.

Its ongoing projects include double-storey terrace houses within a gated and guarded community in Section 7 Shah Alam, service apartments and medium-cost apartments in Serdang Perdana, 2½-storey terrace houses in Seri Kembangan and Ampang Prima condominiums.

Foo said coming up for launch soon would be the Taman Selaseh Commercial Complex shop houses on 4.08 acres near Batu Caves worth a GDV of RM31mil.

The 42 shop houses in Taman Selaseh are priced from RM498,000 to RM628,000 for the double-storey units and RM788,000 to RM1.98mil for the three-storey type.

In Sri Gombak, a 9.5 acre site will be developed into 60 semi-detached houses and bungalows in a gated enclave. Priced from RM750,000 to RM1mil each, the project with a GDV of RM45mil project is currently awaiting building plan approval.

In Penang, a 2-acre site beside Universiti Sains Malaysia will be developed into 11 semi-detached units and bungalows worth a GDV of RM15mil.

Other projects lined up include service apartments in Jalan Pahang, shop offices and terrace houses in Seri Kembangan, terrace houses and shop offices in Shah Alam and terrace houses in Bangi and Malacca.

Meanwhile, Prinsiptek’s construction division is looking to clinch projects under the Ninth Malaysia Plan (9MP), especially the small and medium-sized contracts valued at RM10mil to RM60mil.

It has an unbilled construction order book of RM400mil that will keep it busy over the next three years.

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