KUALA LUMPUR: Titijaya Land Bhd is targeting sales of RM400 million in the current financial year ending June 30, 2016 (FY16), 20% lower than the RM500 million it achieved in FY15 given the softening property market and uncertainties over the economic outlook.

“We will scale back our launches. We are cautious about the market next year (FY16) as there are a lot of uncertainties,” Titijaya deputy group managing director Lim Poh Yit told a media briefing yesterday.

Also present at the briefing was group managing director Tan Sri Lim Soon Peng.

Soon Peng remains optimistic about Malaysia’s property market in the long term even with the softening sentiment due to the weakening ringgit and the implementation of the goods and services tax (GST).

“We are beginning to see foreigners buying our properties because they can buy at a discount now. That is also why we are confident of our venture in Penang,” he said.

Titijaya ventured into Penang last year and is currently undertaking a mixed development that has a gross development value (GDV) of RM2.6 billion.

Asked if the weaker currency would raise the development cost, Soon Peng said the impact is negligible as 90% of materials required are sourced locally.

“There is a little impact from the GST, but that is also offset by the lower fuel prices now,” he added.

According to Poh Yit, there will be three launches in FY16 with an estimated total GDV of RM400 million.

These launches are two residential projects — one each in Ara Damansara and Cheras — and a commercial project in Shah Alam.

While Titijaya is launching the final phase of its Ara Damansara project in FY16, Poh Yit said the group is still confident of the Cheras and Shah Alam launches even though they are both new projects.

“We have 60 units in Cheras, priced from RM1 million, but they are all landed units, which are limited in supply for that area,” he said.

As for the Shah Alam project, Poh Yit said although the retail segment is weak now, he believes the market could recover by the time the project is completed by 2020.

Citing the group’s mixed development in Brickfields, Kuala Lumpur, as an example, Poh Yit noted that Titijaya is changing its land banking strategy by embarking on developments through partnerships to share risks and preserve cash flow.

The group currently has a total land bank of 442.6 acres (179.1ha), valued at RM8.6 billion. It has an unbilled sales of RM732 million.

This article first appeared in digitaledge Daily, on September 10, 2015.