Crest Builder sets RM500 million order book target for 2017, yet to secure new projects year to date

KUALA LUMPUR: Crest Builder Holdings Bhd has reiterated its aim for a construction order book of RM500 million for 2017 even though it has not secured any projects year to date, and expects its tender book to hit RM3 billion in the next few months, from RM1.8 billion currently.
Managing director Yong Shang Ming said it is actively tendering for jobs, with the bulk of them in the Klang Valley. These tenders include building contracts for new and existing clients, as well as property privatisation and land swap projects.
“We hope to secure something within the next quarter or so and it will be sizeable. Nonetheless, we have an order book of RM1.1 billion, which will last us well into 2018,” Yong told a press conference after its AGM here yesterday.
He believes the group’s outlook this year is “a lot better” than in 2016 and looks to post good numbers, mainly contributed by its construction division.
Yong said the group is looking to complete a few projects this year, including its largest contract (worth RM438.3 million) to date, the Quarza, KL East, which consists of 36-storey towers and a six-storey mall that will go into full swing this year.
The integrated construction and property developer expects its construction and property revenue contribution to hit 60:40 this year, from 70:30 in the first quarter this year.
“Construction remains our bread and butter. Of course the ideal target is 50:50 (construction and property revenue contribution) in 2018 because property still gives us a better margin,” Yong said.
He added that in the last two to three months, it has seen a lot more tenders coming up.
“Major developers are beginning to gain confidence in the market and they are ready for launches so they are calling tenders for contracts. Based on the current outlook, we believe the (property) market will pick up substantially within the next two quarters.”
Meanwhile, the group is looking to launch the residential portion of its Latitud8, Dang Wangi project with a gross development value (GDV) of RM750 million in the end of the year. Yong said it is planning for a soft launch in September and a public launch in December or January, targeting 50% local buyers and 50% foreigners.
“We did preview launches in Hong Kong and China and the response was encouraging. As long as the market does not change, I believe these (foreign) purchasers will snap up Malaysian properties,” Yong said, adding that it is targeting buyers from China, Hong Kong, Australia and Singapore as they have a larger investment appetite.
Yong opined that the market has bottomed out in the property sector, especially in the middle and affordable housing segments.
He said the high-end property segment is facing some knee-jerk effect and slowdown in property sales due to capital controls in China. “But with the current weak ringgit, we believe Malaysian (high-end) property is still an attractive investment for international investors,” said.
It has launched the Residensi Hijauan, a 646-unit medium-cost condominium with a GDV of RM390 million, and sold 40% of the first phase.