KUALA LUMPUR: IOI Properties Group Bhd (IOI Properties) is anticipating that its projects in the pipeline in strategic locations around Malaysia will continue to draw prospective buyers as the economy gradually improves post-conditional movement control order (CMCO).
Announcing its Q3 2020 results, which saw the group achieving RM401.4mil in revenue and a profit before interest and taxation of RM137.7mil, IOI Properties also expects their China developments to see greater interest.
In China, economic activities have resumed and in recovery mode after the lockdown due to Covid-19 pandemic. The group’s recent launch of high-rise condominiums in IOI Palm City, Xiamen, received favourable response with a take-up rate of 80% with profit to be registered in the coming quarters.
For the nine months in the current year-to-date, IOI Properties recorded RM1.51bil in revenue and RM678.8mil in profit before interest and taxation.
With the outbreak of Covid-19, Malaysia was not spared from implementing its movement control order (MCO), and this resulted in the disruption of most economic and social activities.
Despite such restrictions, sales for the group in the Klang Valley was not very much affected with some products moving even faster during the MCO period due to aggressive sales packages such as the “Stay@Home Online Sales” and the on-going “Instalment Also Free”.
IOI Properties has been continuously improving on its digital marketing capabilities and has set up an e-Marketplace platform to conduct sale transactions before the implementation of the MCO.
“We will continue to leverage on our digital marketing capabilities, accelerate sales via online platforms and adopt aggressive sales and marketing strategies with focus on the group’s mid-price range of properties in Malaysia,” said its CEO Datuk Voon Tin Yow.
Throughout FY20, IOI Properties has recorded encouraging sales by leveraging on the Home Ownership Campaign (HOC) together with on-going marketing campaigns that targeted audiences from both the traditional and digital platforms to create visibility for its developments.
The extension of the HOC to Dec 31, 2019 continued to stimulate interest in home-ownership while offering an opportunity for property developers to address the property overhang situation.
With IOI Properties’ participation in the HOC, sales picked up and inventory was lowered during this period as buyers took advantage of the campaigns.
Investment in property is often viewed as a good hedge against inflation, hence the demand for residential properties is expected to remain resilient in the long-term, particularly for projects in strategic locations with good transportation infrastructure and proximity to an excellent network of amenities and facilities.
The launch of Alanis, one of the group’s mid-price range of properties in Warisan Puteri Sepang, was met with good response, achieving a take-up rate of 67% to-date. Alanis is targeted at first-time buyers, young couples and extended families with family-friendly facilities.
Despite the disruption to construction progress due to the CMCO, the group is progressively handing over Lavenda 1 and Serene; followed by Alena 1 and Alena 2 in Johor in the subsequent quarter.
Meanwhile, its launches of villas and high-rise condominiums in Xiamen are expected to continue registering an increase in sales revenue with the economic activities in China on recovery mode post-lockdown.
“The remaining FY20 continues to be challenging, but the group is well-positioned for the recovery post-CMCO,” said Voon.
“The pandemic outbreak is expected to affect the performance of the retail and hospitality segments. However, the group is actively adopting a pragmatic tenant retention strategy for occupancy optimisation in anticipation of a less restricted movement environment.”
“Moving forward, we have a mid-price range of projects in the pipeline ready to be launched once we have assessed that the market is ready post-CMCO. So far, we have approximately 40 on-going projects and a total development land bank of approximately 10,000 acres,” he added.