LBS targets higher sales for 2018
> Property developer to focus on affordable and medium cost properties, Zhuhai circuit project to accelerate growth
PETALING JAYA: LBS Bina Group Bhd which has raised the bar for its 2018 sales to RM1.8 billion, despite falling shy of its targeted RM1.5 billion last year, is scrutinising a few financing options for the Zhuhai International Circuit (ZIC) project in China, which may include an initial public offering (IPO) exercise.
The group had raked in about RM1.42 billion in sales in 2017, while its unbilled sales stood at RM1.52 billion as at Dec 27. It has eight launches with a total gross development value of RM2.19 billion for this year.
LBS Bina’s managing director Tan Sri Lim Hock San told reporters at a media briefing yesterday the group’s focus will be on affordable and medium cost properties, in particular landed properties.
About 40% of the RM2.19 billion will be landed properties, while 3,139 units will be affordable homes priced below RM500,000.
“This year we are going to have two townships with landed properties, that is LBS Alam Perdana in Puncak Alam and Cyber South in Dengkil,” he said.
Lim added that the group continues to see demand for affordable housing which will enhance its “cash flow” due to the high takeup rates and cheap land cost.
On top of that, LBS is also banking on its subsidiary MGB Bhd’s (formerly known as ML Global Bhd) Industrial building system (IBS) and precast concrete products to speed up the building process.
Having seen a 42% cancellation rate from buyers last year, Lim acknowledged that while end financing is a problem among buyers, many are also facing problems in terms of forking out the 10% upfront for their purchases.
Hence, LBS which has a money lending license has been addressing the issue by giving out loans to buyers who could not afford their down payment.
With an existing undeveloped land bank of 3,806 acres, LBS is also eyeing land acquisition measuring more than 400-500 acres, which are suitable for township development.
Besides LBS Alam Perdana and Cyber South, its other township projects includes D’Island Residence in Puchong, Bandar Putera Indah in Batu Pahat and Cameron Golden Hills in Cameron Highlands.
Meanwhile, the group which obtained the development order for the ZIC project, a racing circuit cum mixed development project, after delays in approval – is slated to begin works next year.
The project is being jointly undertaken by LBS and its local partner Zhuhai Jiuzhou Group Holdings Ltd on a 60-40% basis.
Under this partnership, Zhuhai Jiuzhou will provide 264-acre land while LBS will contribute the capital to develop the racing circuit.
While at this juncture, the listing of the joint venture entity Zhuhai International Circuit (ZIC) Ltd is not a definitive plan, it is however among the options that are being scrutinised along with other fund raising options.
“It is one of the method (IPO) we can go but we cannot finalise. We’ve got our people to study the feasibility,” Lim said. The group is expected to decide on its financing method by the end of the year.