SELAYANG: THE soft property market will continue to put pressure on small and mid-sized property developers such as Hua Yang Bhd at least until next year, said its top executive.
However, the acquisition of a 30.95 per cent stake in Magna Prima Bhd could offer an escape route for Hua Yang to grow from sluggish sales once both companies undertake new launches.
Magna Prima holds landbank in strategic locations which are easily accessible and surrounded by ready amenities, including 1.06ha of prime land in Jalan Ampang, Kuala Lumpur.
Hua Yang chief executive officer Ho Wen Yan said the current weak property market had put the brakes on new project launches, but the company is planning for market recovery by end of the year.
“The market conditions are still quite challenging, so hopefully we would see demand recovering and the market improving. At the moment, we will maintain our sales level and plan for market recovery by the end of the year,” he said, here, yesterday.
Starfish Training Sdn Bhd director Warrick Singh said the small- and mid-tier developers are struggling in this tough property market and some of them are holding back launches.
“The property market is expected to stay weak for at least another year. However, serving the right segment in the property market within the right location is the best thing to do as demand is still good.
“For Hua Yang, the acquisition exercise was a good move because it would be easier to sell properties, within strategic locations especially in the Klang Valley,” he said.
Hartanahguru.com founder Abdul Aziz Ahmad said local property sales would continue to be sluggish over the next three years for all players, including property developers and property agents, but affordable housing serves as a sweet spot.
Meanwhile, Ho said Hua Yang was now looking at unlocking the value of Magna Prima’s landbank although no firm plans were on the table yet.
“There are no firm plans yet on the collaboration with Magna Prima in the near term and the development of Magna Prima’s land in Jalan Ampang.
“But, we are looking forward to it. I have just joined Magna Prima as an executive director. My role is to help the company unlock the value of its landbank,” he said.
Hua Yang had previously bought a 10.84 per cent stake in Magna Prima.
Yesterday, its shareholders approved an additional 20.11 per cent stake acquisition in Magna Prima.
Hua Yang has been squeezed by soft market conditions, with its net profit falling 45 per cent to RM60.74 million, from RM110.07 million last year.
Its revenue declined 33 per cent to RM385.36 million, from RM575.74 million.