And he is not ready to slow down yet.
Watch this Space by Chee Su-Lin | firstname.lastname@example.org
As I rush towards my appointment with Tan Sri Leong Hoy Kum, I am very conscious of being late. Besides his reputation of being punctual, a quality that reportedly came from his time studying in Japan, he is the CEO of the country’s second largest property development company by annual sales–Mah Sing Group Bhd–after all.
As it turns out, he arrives slightly later than me, only because he was caught by the recent landslides in the city. When he arrives, he is brisk but personable and warm.
After wrapping up what must be one of shortest photo shoots I’ve experienced (as I said, he’s quick) he sits down to say, first of all, that he is very bullish about the market.
While many have been taking in the entire drama of the recent general elections, Leong has been on the move. “I’ve been very busy; you will see we are going to announce more and more land acquisitions over the coming months,” says Leong in his raspy voice and straightforward manner.
Despite the fact that last year saw the property market’s total number of transactions fall and value increase modestly by 4%, Mah Sing’s own sales performance increased by about 11% to RM2.5bil, he proudly states. “We actually beat the market.”
The elections are now also over, bringing with them the suspense that came with it, and KLSE has reacted with a jump for joy. While not all stocks consistently rose, Mah Sing’s has, and its current price at time of writing, RM2.80, is the highest achieved in the last year.
“With general elections finally out of the way, investors will likely refocus on the fundamentals of the property sector,” says a company report by CIMB Analyst which upgrades the sector from neutral to overweight (which in analyst-speak is of course positive, meaning that there is more fat to be gleaned from these stocks).
“We believe that the removal of election overhang and continuity of government would aid buying sentiment,” adds AmResearch’s May market strategy report. “Pre-sales momentum also would re-accelerate… Mah Sing is fast emerging as the entrepreneur-driven proxy to the robust property market.”
“I think after the general elections, most of the investors are coming back and playing catch up,” is Leong’s own take on things. “A lot of people, especially foreigners, were waiting for the results of the elections.”
At the same time, the company’s recent rights issue was oversubscribed, which provided the company more working capital for its projects and funds for the lands that Leong has been so busy shopping for.
Iskandar is the hottest… still
Researchers are particularly optimistic about the “robust outlook for residential properties in the Klang Valley and Iskandar”, as CIMB Analyst’s report goes.
“It is likely that the BN government would pursue closer ties with Singapore to develop the Iskandar area,” continues AmResearch.
The region is certainly a focus for Mah Sing besides its traditional hot spots of Greater KL, Penang and Kota Kinabalu, Sabah. “Iskandar is the hottest now,” says Leong.
Mah Sing in fact previewed two towers within its Meridin Suites Residences project recently. It is part of the Meridin@Medini mixed development near Legoland, which also includes shops, SoVo units and corporate towers.
After a couple of private previews, three quarters of the nearly 600 units released were pre-reserved (official sales have not opened). The units were priced from RM387,000 with built-up area ranging from 521 sq ft (about RM740 or SG$310 per sq ft).
“There are 50,000 commuters traveling from Johor to Singapore daily, earning Singapore currency. So there’s definitely a boom in Iskandar,” contends Leong.
He is also sanguine about the proposed Malaysia-Singapore Rapid Transit System (RTS) Link which will likely connect Johor Bahru at JB Sentral with the Thomson MRT Line at Woodlands North station in 2019. “This will improve access and property value, make it even more convenient for Singaporeans to move their investment to Iskandar or stay there.”
Mah Sing’s other projects in Johor include i-Parc factories near Port of Tanjung Pelepas, and the Sierra Perdana, Austin Perdana and Sri Pulai Perdana townships. RM2.2bil of gross development value remains to be reaped from 407 acres of land in Johor.
And will Leong acquire more land in Johor? “Definitely!” he answered confidently.
Greater KL homes priced from RM208K
Leong is also confident of Mah Sing’s product mix with a substantial number of affordable homes.
“Four to five years ago, most developers targeted higher end properties. For the next one to two years, the trend is more towards mass market housing. We will have that, the affordable range as well as the mid- to high-end.”
He cites Mah Sing’s Southville City township in Bangi which will offer 1-bedroom Savanna Executive Suites priced from RM208,000 and 3-bedroom versions priced from RM280,000. The first phase is due to launch soon.
“Our Garden Plaza suites in Cyberjaya are also being sold at a very affordable price, from RM318,800. While in Rawang, we have link houses priced below RM500,000.”
Increasing the proportion of foreign buyers
For 2013, Mah Sing targets for its proportion of foreign buyers to increase from the current 10% to 15% to 20%.
While property markets like Hong Kong, Singapore and China are cooling down due to government measures, Malaysia’s property market will benefit with more buyers shunting their investments this way.
In fact, 35% of the Meridin Suites Residences previewed recently were taken up by foreigners from Singapore, Japan, Korea, Taiwan and Indonesia.
Several overseas road shows are also in the works, while a new sales gallery will open soon in Singapore to complement Mah Sing’s sales office in Shanghai.
“I’m a fighter”
Ultimately, much of the company’s prospects centre around the man himself, Leong,
who had built the company from the plastics trading firm his father established in 1965 to the RM3bil corporation it is today.
“I’m a fighter lah. I’m very ambitious… I always set a high expectation for myself. I want to transform Mah Sing into a global property developer, a great, lasting and profitable company.”
Much of his drive was forged in humble origins. “I definitely did not grow up in Damansara Heights,” laughs Leong. “I was born in Alor Star and my parents moved to KL at a very young age”.
Nevertheless, he considers himself a KL boy. His family lived near Jalan Ipoh where he studied at a Chinese school before going on to Methodist Boys’ School in Sentul, alumni of which include Tan Sri Azman Hashim of AmBank Group and ex-MCA president Tan Koon Swan.
Would he ever cash his company shares out to a government linked company, as several property entrepreneurs have done over the last couple of years? “We’re certainly not talking with anybody,” says Leong carefully. “I’m still the major shareholder and I will continue to drive Mah Sing. We still have a lot of room to grow. Let me continue to work harder, to drive Mah Sing to new heights.”