Plenitude reviews projects on soft property sector

Plenitude Bhd is reviewing next year’s proposed launch of three housing projects in Kuala Lumpur and Penang, in view of the softening local property market.

Executive director Tan Seng Chye said the company was monitoring the economic conditions and market demand before proceeding with the projects.

“We hope to go as planned but we will be looking at the situation closely and study the demand first,” he said after the company AGM yesterday.

The Kuala Lumpur projects, comprising bungalows, have a gross development value (GDV) of RM147mil for Damansara Heights and RM78mil for Bukit Tunku. Bungalows in the two areas carry price tags from RM3mil.

The Penang project comprises three-storey semi-detached houses and condominiums with a GDV of RM184mil.

Tan said Plenitude expected to maintain pre-tax profit margin for the financial year ending June 30 (FY09) at a level similar to FY08’s 31%, as building material prices had come off their peaks earlier this year.

“We were not affected by the high prices earlier as our projects were near completion.

“Building material prices have eased in the last few months. We’ll be able to maintain margins, going forward, if the prices stabilise,” he said.

Although the property market had seen a slowdown since the first half of this year, Plenitude’s earnings for FY09 would be supported by its unbilled sales of RM216mil, he said.

Earlier this year, the company launched Tebrau City Residences in Johor which has a GDV of RM321mil.

The project, comprising serviced apartments, has secured a take-up rate of 60%.

Plenitude said it currently has 1,849 acres of undeveloped land, which it could use for projects in the next 10 to 15 years.

For FY08, Plenitude’s net profit rose 39% to RM78.6mil while revenue surged 46% to RM347.8mil.

By The Star

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