ISLAND & PENINSULAR Bhd (I&P) is on track to stamp its mark as the largest property developer in the country not only in terms of land bank, but also as a builder of several new mega townships in Selangor.
It has emerged from its first full year of rationalisation (that saw several of Golden Hope Group’s property companies merged under the I&P umbrella) with a new vision, new mission, core values and unified branding for all ongoing and future projects.
I&P managing director Datuk Jamaludin Osman has outlined three strategies for the group:
Jamaludin is confident of turning in an even better profit for fiscal 2007. “I have the figures with me but if I reveal them now, I may be queried,” he told StarBiz with a smile.
The performance of the property-centric group has surpassed the management's expectations, as shown in its financial year ended Jan 31, 2006.
The group achieved a revenue of RM574.1mil, an increase of RM32.6mil or 6%, compared with RM541.5mil in earnings for fiscal 2005. Profit before taxation for fiscal 2006 is RM159.9mil.
The increase from revenue was mainly contributed via the continued sale of homes in Kota Seriemas, Bandar Kinrara, Alam Sutera, Alam Damai and Bukit Damansara, the sale of a portion of its land bank and increased flow of revenue from assets management.
Jamaludin said two new developments to be launched this year were the mega township of Alam Impian in Shah Alam and the more upmarket Bayuemas in Klang.
The 1,235-acre freehold Alam Impian with a gross development value (GDV) of RM3.4bil will have 12,000 new homes with a future population of 60,000. It will also have a 100-acre town centre.
It is 3km off the Federal Highway and surrounded by matured townships like Kota Kemuning, USJ, Putra Heights and Shah Alam city. There is a new show gallery on Alam Impian at Wisma Consplant in Subang Jaya.
The 565-acre Bayuemas with 2,742 planned units will have a GDV of RM207.8mil. It will be designed with a “garden city” concept and will have man-made lakes, a central sports and recreational park, green belts and an entrance statement, neighbourhood parks, pedestrian walkways and smart home facilities. The project, near Glenmarie Cove, will be launched in the third quarter of this year.
Four other developments originally planned for launching this year have been put on hold, pending market conditions and the approval process.
They are Kota Seri Langat in Banting, the 432-acre Alam Sari (RM858mil GDV/3,562 planned units) in Bangi, 111-acre Alam Mutiara in Penang and a proposed development in the 772-acre Bangi Estate.
The 2,900-acre mega township of Kota Seri Langat with a GDV of RM2.5bil will have 10,000 housing units. Billed as the “Putrajaya” of Banting, it will be the future location for the Kuala Langat administrative centre. Its other main feature is a 112-acre botanical park with landscaped canal links.
“We've to be prudent as we do not want to open up too many (projects),” Jamaluddin said, adding that the group's total land bank, after the merger with plantation giant Golden Hope Plantations Bhd, now stood at around 16,000 acres.
I&P's existing developments include townships like the 2,400-acre Kota Seriemas in Nilai with 12,000 planned units launched in 2000 and expected to be completed in 2020; the 10-year-old, 772-acre Bayu Lakehomes in Negri Sembilan with 2,222 planned units and the 612-acre Desa Pinggiran Bayu with 3,301 planned units.
He said the group was also constantly adding value to its products and services such as the introduction of lifestyle concepts and unique entrance statements for new and current projects wherever possible.
For example, Bandar Kinrara would have more landscaping and linear parks. “We're also building bungalows with resort-style designs,” he said.
Jamaludin said the group had also launched a high-end gated development called Seri Beringin in Bukit Damansara last September. The 13 bungalows and 10 semi-detached houses under construction will all be rented out.
Other rental income properties are the TESCO hypermarket in Saujana Impian in Kajang (about RM4.8mil rental per year), Puteri Nursing College in Kota Seriemas (RM1.2mil rental).
SPPK also earned a total rental revenue of RM13.4mil per annum from Desa Damansara luxury apartments, Plaza Damansara 1 and 2, Block B of Plaza Damansara, Bangunan SPPK and others.
He said the Desa Damansara apartments were all rented by foreigners from RM7,000 to RM14,000 per month.
I&P, he said, was in no hurry to develop its land bank but would adopt a careful study of market needs first.
Is the group saddled with too much land bank after the deal with Golden Hope (the rationalisation exercise was completed in November 2004)?
Jamaludin said that it was important to look at things in the long term.
“We need to unlock the value of our land. It takes years to turn raw land into development land. In the meantime, we are also selling some land parcels to other developers. Our gearing is very low.
“We've some 9,000 acres of land in Selangor and another 3,000 to 4,000 in Kota Seriemas in Nilai where we have handed over 700 units. We have to work harder and be sensitive to the market.
“We have to be different. In terms of branding, we want to position I&P as a trusted developer that can deliver on time and can produce quality and affordable homes and innovative designs,” he said.