Mah Sing ventures into data centre sector

PETALING JAYA: Mah Sing Group Bhd has entered into the data centre space by launching Mah Sing DC Hub@Southville City.

The developer’s wholly-owned subsidiary Southville City Sdn Bhd has entered into a collaboration agreement with Bridge Data Centres Malaysia V Sdn Bhd (BDC), a company primarily owned by Bain Capital.

The tie-up will jointly develop data centre facilities and infrastructure on a 17.55-acre freehold land within the Southville City township in Bangi, Selangor.

Mah Sing has allocated 150 acres of land bank for further expansion at Southville City, earmarked to become a leading data centre hub with planned capacity of up to 500MW.

The collaboration with BDC for a data centre with planned capacity of up to 100MW is just the beginning, Mah Sing said in a statement.

“Mah Sing envisions Mah Sing DC Hub@ Southville City as a holistic digital infrastructure ecosystem, meticulously designed to accommodate the demands of artificial intelligence (AI), hyperscale, retail and enterprise service providers.

“This state-of-the-art facility is specifically engineered to support cutting-edge applications like AI computation and large-scale data storage.

“The joint venture represents a strategic shift for the group, diversifying its revenue stream beyond traditional property development, which currently includes landed and high-rise residences, townships, offices, retail spaces, and an increasing focus on industrial projects,” Mah Sing said.

By entering the data centre market, Mah Sing believes it can establish recurring income, which is crucial for building a more resilient financial foundation amid market fluctuations.

With recurring income, the developer aims to create a sustainable and recession-resistant business model, mitigating the risks associated with the cyclical nature of property development.

Meanwhile, Mah Sing is optimistic about achieving its new property sales target of RM2.5bil for 2024, driven by a compelling pipeline of projects strategically positioned in the affordably-priced housing segment.

The property developer said these projects align seamlessly with current market demands, particularly from the rapidly growing first-home market segment.

In the first five months of 2024, Mah Sing achieved RM992mil in new property sales.

“The group is well on track to meet its full-year sales target of at least RM2.5bil, supported by strong sales momentum and a strategic focus on the M Series affordable products.

“This impressive performance was driven by high demand in key markets, particularly in central and southern regions, and successful launches,” it noted.

For the first quarter ended March 31, 2024 (1Q24), Mah Sing saw its top line dipping to RM558.2mil from RM643.5mil in 1Q23 due to a higher proportion of new sales from projects in the early stages of construction, but revenue is expected to increase as these projects progress.

Despite a 12.9% decrease in revenue, Mah Sing’s net profit for the quarter grew to about RM60mil from RM50mil in 1Q23, primarily due to cost savings from the finalisation of construction costs for certain contracts.

In 2024, Mah Sing acquired two new pieces of land – MSS Business Park in Sepang and M Tiara 2 landed link homes in Johor Baru.

Along with five other land acquisitions in 2023, these new projects are projected to add RM8.95bil to the group’s gross development value.

Mah Sing also has incoming vacant possession funds exceeding RM500mil this year, which will generate significant free cash flow.

“With a net gearing of 0.06 times and RM966mil in cash and bank balances, the group will continue to seek value-accretive land for sustainable growth,” it added.

In view of the significant volume of construction progress and property completions for 2024, Mah Sing expects further growth and stronger performance for FY24.

“The group is optimistic of the long-term prospects of its property development business and will continue to deliver value to its stakeholders,” Mah Sing, which has an unbilled sales of RM2.32bil, added.