Focus on affordable homes

KAJANG: Protasco Bhd, whose property division has been hit by soft market conditions, will focus on building affordable homes in the next two to three years, said group managing director Datuk Seri Chong Ket Pen.
“In order to buck the market trend, we have to concentrate more on affordable housing. In fact, from the recent Budget, that is also in line for us to support government policy, to build more affordable housing. That is the trend to go, at least for the next two to three years, as affordable housing demand is still there,” he told reporters after Protasco’s EGM yesterday.
Chong said it will focus on building smaller units priced at RM300,000 to RM350,000. Its next launch, slated for the second quarter of 2017, will offer units of 500 to 600 sq ft each.
Located within its De Centrum City project in Kajang, the affordable units will be developed in two phases of four acres each, with gross development value (GDV) of up to RM700 million.
Chong said plans for the affordable units are almost finalised and Prostasco has received many enquiries.
Next year, the group will also launch a RM150 million project in Kelantan. The project, which was announced last year, is a joint venture with the Kelantan government and will take up 4.5 acres.
Chong said it has obtained almost all approvals and construction will begin latest by the second quarter next year. The take-up rate for the project is at 60-70%.
However, the construction of its villa and apartment project named Rimbawan has been delayed. Also located within De Centrum City, the units are priced between RM800,000 and RM1.5 million each.
“We were supposed to launch in June this year but we scaled back. Looks like we need to scale back at least six months to one year. We will still carry on with the project but we will only start building when bookings touch 40%. Now it is at 20-30%,” said Chong.
Due to the delay in the RM350 million Rimbawan project, he said, its unbilled sales are at RM30 million, although it is due to improve when it launches the affordable units next year.
Chong said Protasco has 130 acres of freehold land in Johor, Sabah and the Klang Valley. It plans to develop shoplots in Johor and is studying the market in Sabah. Of the 100 acres at De Centrum City, 40% has been developed and the rest will take 15-20 years to complete.
“We are on the lookout for more land. We are contemplating venturing into mass housing, so we are looking outside the Klang Valley. We are looking at a few offers now,” Chong said.
He added that Protasco is in “intense discussions” for land acquisition and hopes to announce a deal next year. The group is eyeing large landbanks of 100-150 acres that are suitable for township projects.
Meanwhile, Protasco’s construction division is “sustainable” with an order book of RM1 billion and a tender book of RM3 billion. Chong said it replenished its order book by RM500 million this year and is confident of maintaining the replenishment rate every year.
Yesterday, shareholders approved a one-for-four bonus issue that will raise Protasco’s paid-up capital to between RM212.18 million and RM212.41 million. The bonus shares are expected to be issued and listed by the end of this month.