MAHSING – To build three towers (CIMB)

Mah Sing Group Bhd, has partnered a Chinese firm to build three towers at its RM408m Icon Residence Mont' Kiara project in Mont' Kiara, Kuala Lumpur. The firm, a diversified group from China, will build the towers in exchange for 96 units from Mah Sing. The units are worth a combined of RM220.8m or an average RM1,200psf, said Mah Sing group MD Tan Sri Leong Hoy Kum. Icon Residence Mont' Kiara comprises three towers with a total of 260 units. Each unit is worth an average of RM2.3m. With the Chinese firm taking up 96 units, this would mean Mah Sing has sold 60% of the project since the project launch in Jun-2011.

Leong said this is the first arrangement between Mah Sing and the Chinese firm and also the first of its kind for the group.He said this arrangement will free up the construction cost for Mah Sing, allowing the group to use its cash flow for other opportunities. Leong added that it will also set a precedent for similar arrangements in the future for Mah Sing's other projects.(BT)

We view this transaction positively as it helps to raise take-up rate by 37%pts to 60%. Sales for the project has been relatively slow due to the high pricing as condos in the Mont' Kiara area are facing oversupply and price pressures. The sales value of RM221m will also take YTD sales to around RM2bn, in line with the company's full year target of RM2bn-2.5bn.