SDB to take conservative approach

Property developer Selangor Dredging Bhd (SDB) will be taking a more conservative approach over the next six to 12 months in light of the challenging economic conditions.

“For the past few months, sales have been very slow. People have been more unwilling to part with their money because of the ringgit depreciation,” explained managing director Teh Lip Kim.

SDB plans to focus on selling its existing inventories, which currently stand at about RM90mil for the next year. Despite charging 20%-30% higher than its competitors, the company has a healthy take-up rate of 70%-80% and 95%-100% for its properties in Malaysia and Singapore respectively.

Regarding foreign funds leaving the country, Teh maintains that SDB will be unaffected as 80%-85% of its units are sold to local buyers.

Teh said the company would also focus on the upcoming private preview of The Cube at its Sqwhere mixed development in Sg Buloh, Selangor. Sqwhere has already seen a take-up rate of 90% for its small offices-versatile offices.

This will be followed up by a private preview for The Cube’s serviced apartments next year. The gross developmental value of these launches will total RM250mil.

SDB has a relatively small land bank consisting of 14 acres in Melawati and 19 acres in Serdang, Selangor.

“We are always scouting,” said chairman Eddy Chieng when quizzed on property acquisitions, adding that SDB was in a good position to replenish its land bank with RM200mil in cash and an asset base of RM1.5bil. The company’s unbilled sales stand at RM550mil.

“Land prices have become more reasonable. Previously, prices were at a level that was not feasible for developers, which is why we held off acquisitions for the last year. Now, we are starting to look again,” said Teh.

She added that SDB was mainly looking for land in the Klang Valley and Singapore city.

Meanwhile, Wisma SDB continues to maintain its high occupancy rate of 94%. Some of its tenants include established names such as Al-Rajhi Bank and the British Council. - By The Star