MIDF to roll out 10 projects in 2 years

MIDF Property Bhd will roll out 10 new projects worth RM312 million over the next two years, says its general manager Mohd Yusoff Abdullah. Yusoff said the company's revenue has fallen sharply since the last financial crisis, from RM73 million in 2008 to RM48 million the following year.

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/MIDF4/Article/
Published: February 05, 2013

"We are gearing up to launch more developments and winning new customers. We are forecasting that for the current year, revenue will touch RM60 million and from 2014 onwards, we will be able to record double-digit growth," Yusoff told Business Times in an interview recently.

MIDF, set up in 1964, is a wholly-owned unit of Permodalan Nasional Bhd and a pioneer industrial property developer, providing a wide range of ready-built or purpose-built factories, warehouses and logistic centres for sale or rental in fully developed industrial estates throughout Malaysia.

Since its inception, it has built 3,095 units of industrial terrace, duplex, detached and purposed-built factories, as well as warehouses and logistic centres, with an investment exceeding RM1.21 billion.

"We are quite bullish that there will be at least five per cent growth in revenue this year, driven by our properties that are on long-term lease. We currently have 440 factories on rental, giving us substantial returns.

"We have about 60-odd terraced type units, which we plan to dispose of for RM10 million. These units are not on rental and we are looking for buyers. With the money generated from the asset sale, we plan to re-invest in new developments," Mohd Yusoff said.

As for the 10 new projects, MIDF will construct custom-build industrials properties, ranging in sizes from 60,000 sq ft to 400,000 sq ft.

Yusoff said four of the buildings are for multinational companies and the rest for local small and medium enterprises.

"Under our new business model, we sign sales and purchase agreements with the respective companies first and then design and build for them. This means we will have strong cash flow position to embark on new projects.

"Previously we were focusing on build-then-sell and found it difficult to sustain growth as clients had their own requirements. Because of that, we had stock and that was affecting our profit margin," Yusoff said.

He ruled out any listing plan for MIDF to raise funds, adding that the company has enough cash to finance its developments.

"We have the capacity to borrow from banks but we are not doing it at the moment. We have enough cash to plan our expansion. Going forward, we may work with smaller developers and help them develop their land into viable industrial parks.

"The new approach that we are taking is building custom-build properties and either selling the units or leasing them long term, or for a minimum of 10 years. This way our income will be secure every year," he said.