MARC has affirmed the rating of MARC-3ID assigned to Perspektif Perkasa Sdn Bhd’s (PPSB) RM188 million nominal value Murabahah Underwritten Notes Issuance Facility (MUNIF). The rating is reflective of the positioning of Bandar Pinggiran Cyber as an affordable integrated township driven by the competitive pricing of its residential development vis-à-vis other property developments within the vicinity. The township is also strategically located close to Cyberjaya and Putrajaya. Also, lending credence to the rating is the option available to the Security Agent to exercise upon the occurrence of an event of default whereby Talam Corporation Berhad (Talam) shall acquire the entire paid-up-capital of PPSB at a purchase consideration equivalent to the total indebtedness under the MUNIF. Notwithstanding, the rating is moderated by PPSB’s exposure to potential adverse developments in the property market.

The proposed township is situated on a 99-year leasehold land, in Mukim Dengkil, Daerah Sepang, at the fringe of Cyberjaya. The property development is accessible via the Lebuhraya Damansara Puchong and North South Central Link (Elite Highway). Prices of the residential units are expected to be affordable retailing at less than RM250,000 for the single-storey terrace houses, double-storey terrace houses and low to medium cost apartments. The take-up rate for this project should be boosted by the integrated township’s competitive pricing as well as its strategic location given its proximity to Cyberjaya and Putrajaya.

Over a period of about seven to eight years, PPSB intends to develop and sell a total of 11,325 units of mixed development properties with a Gross Development Value of about RM1,556.3 million. As at 31 March 2004, a total of 1,497 units of single-storey terrace houses comprising Phases 3D1, 3D2 and 3E have been launched. To-date, PPSB has sold 1,247 units valued at RM159.67 million representing a take up rate of approximately 83.30%. The relatively high take-up rate underlines the attractiveness of Bandar Pinggiran Cyber as an affordable residential area. Construction of the residential property is reportedly 10% completed. Correspondingly, PPSB has only billed RM15.97 million and out of those, RM12.55 million has been collected.

The turnkey contractor for this development project is Talam Builders Sdn Bhd, a subsidiary of Talam. The presence of Talam in this project should mitigate any concerns related to construction risk, given Talam’s vast experience in the property industry.

PPSB expects Bandar Pinggiran Cyber to generate total cash inflow, from the sale of the properties, of RM1,556.30 million. The cash flow is projected to achieve a minimum DSCR of 1.77 times and an average DSCR of 2.62 times.

Sensitivity test carried out on the cash flow revealed that the projected cash flow is susceptible to a combination of rollover in the projected sales and a reduction in projected sales. Under such a scenario, PPSB would have difficulty in meeting its sinking fund obligations and ultimately the first principal redemption of the MUNIF in July 2005. It is evident that PPSB’s debt service capacity is highly dependent on the company achieving the projected sales target and any significant delays in the collection of progress billings and discounts in the projected sales volume would potentially affect its debt servicing capacity.