Friday, 30 June 2017

(The Edge Financial Daily) Tiger Synergy to build RM100m rent-to-own condominium


KUALA LUMPUR: Tiger Synergy Bhd has signed an agreement with Prosma Bhd, the holding company for the assets of Sekretariat Komuniti Prefer Malaysia (SKPM), to develop Telaris Gombak, an affordable condominium project in Gombak, at a contract value of RM100 million.

The Telaris Gombak will be developed over a period of three years under the rent-to-own scheme spearheaded by Prosma, and will comprise 180 residential units and eight commercial units at an estimated price of RM500,000 per unit. The scheme will see the properties rented to the proprietor for 30 years.

SKPM is supported by the finance ministry and domestic trade, co-operatives and consumerism ministry as the scheme owner, and has been appointed to manage 50,000 houses under the scheme.

The project, which sits on 1.5 acres (0.607ha) of land, is expected to contribute RM30 million to Tiger Synergy’s bottom line over the next three years, said the group’s managing director Shirley Tan Lee Chin at the signing ceremony.

This is expected to help the property developer, which recorded a net loss of RM8.09 million in its most recent quarter, achieve a turnaround in its financial year 2018 (FY18), said executive chairman Datuk William Tan Wei Lian.

“Due to the soft sentiments in the luxury residential property segment and stringent mortgage application conditions, Tiger Synergy’s shortterm business strategy is to stay on course with its strategic focus on delivering high quality and affordable homes,” William said.

According to William, the project is not subject to any risks, such as those of a soft property market and unsold units, as Prosma is buying all the units.

“We might raise additional external capital for this project,” Shirley said, adding that the group would also work with Prosma on fundraising.

Shirley also shared Tiger Synergy has been holding back the launches of its typically high-end projects for the past two years because of the soft property market. However, the group now expects there to be a turnaround in market sentiment.

She said the property segment will continue to be the main earnings contributor to the group, while Tiger Synergy’s construction segment will go towards supporting its developments.

The group has nine property projects with a gross development value of RM2 billion to be launched within the next five years, of which 40% are “affordable” for customers earning above RM5,000 per month, Shirley said.

Tiger Synergy, William added, expects to maintain its 30% profit margin on these projects.