DPS Resources Berhad says the company is on track to roll out about RM1 billion worth of property development projects in Melaka, Seremban, and Klang Valley, over the next five years.
"In achieving our RM1 billion target, we have a five-year plan to build affordable homes. Even with the on-going pandemic and increased market challenges, we are confident that our projects will be in hot demand. We are committed to building the right housing products, delivering quality lifestyle homes at a very attractive price," said the company's group managing director (GMD) Edward Sow Yuen Sen.
Sow said that as part of the RM1 billion target journey, DPS will be completing four projects in Melaka with a gross development value (GDV) of RM159.73 million.
The four projects have an impressive take-up rate of more than 85 per cent and they are on track to complete in the year 2021 and 2022, he told NST Property.
The projects are Taman Bukit Rambai Putra Phase 1 (GDV:RM96.6 million), Taman Bukit Rambai Putra Phase 2 (GDV:RM48.2 million), Taman Krubong Jaya Phase 2 (GDV:RM7 million), and Tanjong Seri Tanjong Minyak (GDV:RM7.9 million).
DPS is developing the four projects under collaboration with landowners.
Sow said under such arrangements, the landowners will get some of the completed units in exchange for the land.
"This arrangement means DPS does not need to fork out money to acquire such land for development. However, we have not restricted ourselves to just collaboration with landowners across the country. In our continuing search for opportunities to grow the land banks for future development, we may purchase new land banks which fit into our future development," he said.
"We expect to see this year the highest topline and bottom-line contribution from the four projects. I am very optimistic on the effect of delivering vacant possessions of these projects to the financial performance such as revenue, profitability, and earnings per share of DPS in the financial year (FYE) March 31, 2022," he added.
Sow said one competitive advantage that DPS has over its rivals is that the company has its own construction arm to carry out the developments.
"With DPS having its own construction arm, I believe the company has an edge over other developers that may increase the overall profit margin for the projects, by carrying out cost optimisation," he said.
The Main Market-Listed firm has two main businesses led by property development and construction. Its other business is trading and furniture-making.
DPS diversified its business into property development and construction services in 2015.
Sow was appointed GMD of DPS in 2015. He took over the management as the new driving force, from the company's founder Datuk Sri Dr. Sow Chin Chuan, who controls around 45 per cent of DPS.
The developer commenced its maiden development project, Taman Krubong Jaya in Krubong Jaya, Melaka in May 2016.
DPS crystalised a GDV of RM12.71 million from the development with the completion of 89 units of single-storey terrace houses in August 2018.
Sow said in the pipeline are seven projects, with a combined gross development value (GDV) of RM95.5 million.
"We have identified the projects and obtained the development order. We target to launch the projects in phases as early as the first half of this year. They are affordable residential homes at mature locations. We feel this is the right way to go about our property ventures. The market is looking for affordable houses in strategic locations, amid the on-going pandemic and market challenges," Sow said.
Sow said DPS plans to develop the projects by forming joint-ventures with the landowners.
The company will also look at outright purchase of land parcels to have full control over the development of the projects, he said.
In the next two to three years DPS aims to launch seven larger scale projects with a combined GDV of RM803 million.
"As of now, we have secured projects in the planning stage to cover half of the targeted RM803 million. We are in the midst of securing potential JV partners and land acquisitions to reach the final milestone. I am very pleased that DPS is in the upper hand on the JV negotiations," Sow said.
DPS intends to price future projects in the range of RM300,000 to RM500,000, he said.
Sow said, whilst setting the houses in such a price range, DPS is committed to offering great value for money, similar to the product offering in the company's Taman Bukit Rambai Putra project.
"In Taman Bukit Rambai Putra, we are proud to be the first in offering a great value in terms of flexibility of upgrading the houses to our buyers. A buyer to our single-storey terrace house can literally upgrade the house into a double-storey terrace house with little money, thanks to the superstructure we have in place. Essentially, a buyer is paying the price of a single-storey terrace house for a double-storey building.
To date, DPS has more than RM50 million unbilled sales in hand, which will keep the company busy for the next two to three years, Sow said.
On the outlook, Sow expects the property market to improve in the second half of 2021, partly driven by an improved economic and public health climate.
"Strong existing demand for homeownership will likely be unlocked, and we will see healthy growth in property transactional activities," he said.