PPB foresees better property earnings with easing of movement restrictions

TheEdge Thu, Mar 04, 2021 04:13pm - 2 months ago

KUALA LUMPUR (March 4): PPB Group Bhd’s property division is expecting more progress billings as the movement restrictions are gradually lifted, which will allow more construction works to proceed.

“We will see more construction progress chalk up over the rest of the year; the earnings will improve,” said PPB property division chief executive officer (CEO) Low Eng Hooi during a media and analyst briefing today.

In terms of property sales, the Low said its Southern Marina Residences development, an integrated waterfront enclave in Puteri Harbour, Johor had been impacted by border closure as prospective buyers are based mainly overseas.

The pickup rate was almost nil at the moment, he updated.

Until the borders reopen, he does not expect much progress for that development.

Meanwhile, its Megah Rise condominium project in Petaling Jaya saw a surge in sales recently due to the release of bumiputera units for sale, though that is slowing. He said the group is providing an experiential gallery to move sales and show units to help market the development.

Overall, around 60% of the units available have been sold.

As for Southern Marina, 51% of the available units have been picked up.

“We have seen an uptick [generally] because of our release for the rest of the year. With the ending of the MCO (movement control order), hopefully, we will see more progress and entice more interest in our developments. In a nutshell, we do see an improvement in sales,” he said.

On tenancy of its malls, Low said the depressed market will still probably result in a reduction in rental revenue this year, but he expects a recovery next year. The occupancy rate of Cheras LeisureMall is currently at 95%, followed by Cheras Plaza at 64%, and its New World Park and Whiteaways Arcade in Penang at 64% and 81% respectively.

Meanwhile, PPB managing director Lim Soon Huat said the progress of the order book for its environmental engineering and utilities segment had not been significantly impacted by the MCO. As of Dec 31, 2020, the order book for the segment stood at RM409 million.

“The MCO has certainly affected everyone, including our site progress. But it has not affected us significantly because we are able to catch up with the work, and therefore we are confident that we will be able to deliver the various projects according to schedule,” Lim said.

Lim added that the group sees more opportunities in the water segment, especially in East Malaysia — with more opportunities likely to manifest in the second half of this year — after having secured a contract in Sarawak recently.

At the time of writing today, PPB shares were trading 1.27% or 24 sen lower at RM18.62, giving the group a market value of RM26.49 billion.

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