PERHAPS a good example of a company that has successfully ventured into property when its core business was something totally different is Mah Sing Group Bhd.
Mah Sing was a major player in the plastics industry, with key clients such as Toyota,Samsung and Panasonic when it got listed in 1992.
However, head honcho Tan Sri Leong Hoy Kum decided to make his foray into property development two years later due to thinning margins in the plastics manufacturing business.
That decision also stems from a personal interest in property investment, he reveals.
Leong found out soon enough that the transition from plastic manufacturing to property development was very challenging and a steep learning curve for the firm.
The main challenge, he says, is to carve a niche in a crowded market place, he tellsStarBizWeek.
“We made a conscious decision to go medium-upper to high-end with our properties and came up with the tagline ‘premier lifestyle developer’ with our mantra being ‘location, quality and branding’. Between 1994 and 2000, Mah Sing completed property projects worth some RM500mil in gross development value (GDV) comprising mainly landed residential projects for the mass market as well as some industrial projects.
The company was redesignated to a property counter in 2000 to reflect its core business, and in that year, it ventured into its maiden lifestyle project – Sri Pulai Perdana in Skudai, Johor Baru.
Its first property project though was in Ulu Yam.
“It was a very practical product, single-storey link homes and it was a confidence booster for me.”
Mah Sing returned to the Klang Valley in 2003 for more lifestyle projects where its Damansara Legenda development project propelled it into the ranks of high-end, “branded” developers.
Damansara Legenda, comprising semi-Ds, bungalows and garden bungalows and situated adjacent to the Tropicana Golf and Country Resort, was completed in 2006, with home prices starting from RM1.5mil each.
The company has 45 property development projects in Greater KL, the Klang Valley,Iskandar Malaysia, Penang and Kota Kinabalu, Sabah.
It is the second largest listed property developer in Malaysia by sales value and it has RM28.38bil in remaining GDV and unbilled sales.
The bulk of the group’s remaining GDV is focused on the central region, with 56% concentrated in the Klang Valley and Greater KL, followed by 26% in Iskandar Malaysia, 12% in Penang island and 6% in Sabah.
Mah Sing chalked up approximately RM2.25bil sales for the first three quarters of this year and is on track to achieving its full year sales target of RM3bil, says Leong.
The need to finetune one’s products according to demand is an extremely important factor in the property industry, he notes.
“We need to be on the ball about what the market wants.
“For example, a few years ago we concentrated mostly on high-end development projects – semi-Ds and bungalows due to the lack of supply – at that time when such homes made up less than 10% of total residential supply.
“Over the past two years we have been concentrating on mass market development, bread and butter products for the middle income class, while maintaining some higher-end products only in selected locations.” _The Star Biz
Saturday November 30
Saturday November 30
