Selangor Dredging seeks land, says prices more reasonable now

KUALA LUMPUR: Selangor Dredging Bhd (SDB) is looking to replenish its landbank in Malaysia and Singapore as land prices have become more reasonable, said its managing director Teh Lip Kim.
“Land prices have become more reasonable. Before this, land prices increased to a level that was not feasible to be developed and we held off on land acquisitions for the last one year. We had refrained from buying land but now we are starting to look again,” she told reporters at its AGM yesterday.
She said in Malaysia, it is looking for land mainly in the Klang Valley. The group currently has 14 acres in Melawati and 18 acres in Bukit Serdang.
In Singapore, the group expects to handover its final project in April next year and is scouting for more land. Teh said property prices in Singapore have fallen by 20% to 25% and landowners are now more reasonable with prices.
Chairman Eddy Chieng Ing Huong said it is in a good position to replenish its landbank with RM200 million cash and close to RM1.5 billion asset base. The group’s unbilled sales currently stand at RM554 million.
“We will be very selective,” he added.
According to Teh, the economic situation has been very challenging over the last six months and expects the trend to continue for the next one year.
“Sales have been very, very slow. Due to the falling ringgit, people are holding on to cash. We have been lucky that our projects in Malaysia have been 70% to 80% sold and 95% to 100% sold in Singapore. Over the next six to 12 months, we will focus on selling the stock in our inventories,” she said.
She said the value of the unsold properties amounts to RM90 million and the group does not plan to reduce prices. Instead, it will ramp up advertising and promotional efforts to increase sales. These properties are located in Penang, Kuala Lumpur and Puchong.
Besides expanding its landbank and clearing its inventory of unsold stock, the group will also be focusing on its mixed project in Sungai Buloh named SQWHERE. The group is planning for the private preview of the service apartments and an office block in the next one year.
The total gross development value of SQWHERE is RM550 million, of which RM250 million is the GDV of the service apartments and office block.
The group’s hotel revenue dropped to RM23.2 million in its financial year ended March 31, 2015 from RM27.5 million a year ago while occupancy fell to 47% from 59%.
Teh said this was mainly due to the drop in foreign visitors after the airline tragedies.