IJM Clears the Air Over RM1billion Unsold Units
IJM Land Bhd has unsold properties totalling about RM1billion throughout the country; 95% of which comes from its landed and high-rise residential units, while the rest are commercial properties.
Explaining on the RM22.26billion worth of overhang residentials totalling 34,532 units in the country as at the end of March 31, Managing Director Edward Chong said that the term "overhang" must be viewed objectively.
He said the company's unsold stock includes Bumiputera units. In some projects, developers have to put aside up to 40% of total units built for this purpose. Although these units are not sold, they need not necessarily fall into the "overhangâ€ category.
There is a difference between the overhang and unsold units. NAPIC defines overhang as completed units which have been certified fit for occupation but remain unsold despite having been put on the market for at least nine months.
"I am not saying there is no overhang in the country, but this figure of RM22.2bil: 33,532 units may be inflated" he said.
Chong said it is hard to say how much of it comprises of bumiputra units because each state has a different release mechanism as to when the units can be released for sale in the open market. The slower pace in which developers' units are sold, coupled with more units being launched, may also inflate the figure.
Chong said the company has RM1.5bil worth of new projects, 85% of them are residential units, to be launched until March 2019 in the country. To date, IJM has projects in Penang, the Klang Valley, Johor, Seremban, Sabah and Sarawak.
"We are mainly involved in township development which involves all segments of residential units. So, we have the flexibility of not going ahead with launching high-rise apartments. We find that landed units up to RM1mil have strong demand while for high-rise units, those priced up to RM800,000" he said.
Chong said for units priced at about RM500,000, the company is mindful of the per sq ft (psf) price. There may be demand for a RM500,000 unit if it has a built-up area of 1,000sqft, but not for a built-up of 500sqft.
On his hope for the property sector under the new government, Chong said the Real Estate and Housing Developers' Association (REHDA) has expressed to the new government the need for a single agency to collate and mine data submitted by developers.
"Timely and transparent information will give us a level playing field" he said.
Chong said developers would like to encourage the government to gazette the structure plan in the respective states. This gives transparency as to what can be built at a particular location, what is the plot ratio and other information that would help a developer size up a site.
"Under the previous government, I may have the know-how but am given a lower plot ratio, while another who does not have the know-how but has the know-who is given a high plot ratio" said Chong.