SP Setia launching a slew of projects

Amidst the soft property market, SP Setia Bhd plans to launch a slew of projects with a total gross development value (GDV) of RM4.7bil to bring in sales of RM4bil this year.

The property developer has launched two projects – Setia Eco Templer and Edulis – and plans 11 more launches for the second half of the year.

“RM4bil in sales is still achievable as many Malaysians are still looking to buy homes for themselves. For us, it’s a matter of building in the right locations,” president and chief executive officer Datuk Khor Chap Jen told reporters after the company’s AGM, where shareholders unanimously voted in favour of a full-year’s dividend payout of 23 sen per share.

This would include the interim dividend of four sen per share totalling RM604.5mil, representing a dividend payout ratio of 65.8% of profit attributable to shareholders.Its latest launch Setia Eco Templer in Rawang, which launched 234 units of landed residences, sold out its terraced and bungalow offerings and 80% of its Semi-D units, raking in over RM200mil in sales.

“Templer has been devoid of such a development, so buyers are willing to wait for a project like ours,” Khor said.

Among the property developer’s planned launches in Malaysia for the year are in existing developments such as Setia Alam and Setia EcoHill as well as new launches Setia EcoHill 2, KL Eco City, Sky Seputeh and others. The property developer will be offering a total of 8,206 units with a total GDV of RM4.783bil.

Overseas launches this year are 48 units of low-rise apartments in Carnegie in Melbourne, Australia, with a GDV of RM91mil and landed residences in Eco Xuan, Vietnam, with a GDV of RM3mil.

For the first quarter ended March 31, 2016, SP Setia posted a net profit of RM123.4mil on the back of RM908.5mil revenue.

The group said its prospects moving forward remained positive, with total unbilled sales amounting to RM8.6bil as at March 31, 2016.

It said the plan was to continue to market a “diversified range of new launches from the affordable to up-market in strategic locations”.

Khor said the group’s strategy to launch mid-priced range and underserved products continued to be fruitful as the local projects had contributed RM697mil or 80% sales in the current period.

“We concentrated on deliveries in existing townships. Currently, all infrastructure works in existing townships are in place, so there will be new launches within these developments,” Khor said.

He added that the company would fulfil its affordable housing obligations in the areas where it had existing projects in the Klang Valley, Penang and Johor without venturing out to “smaller states” such as Malacca and the east coast.“The Government’s requirements for affordable housing such as the RM300,000 and below for first-time home buyers are more relevant in the places we are in,” Khor said.As for SP Setia’s land-banking activities, Khor said the group was looking to expand in Australia rather than in the United Kingdom and Singapore, as the take-up rate in the former had proven to be stronger.

The company has acquired a third parcel of land Down Under measuring half an acre for A$6.68mil in the central business district (CBD) of Melbourne which would have an estimated GDV of A$34mil.

“As we have already fulfilled our goal to acquire a site in the CBD in Melbourne, we are now eyeing land in the suburbs. Locals have been finding the landed properties too expensive, so there is the opportunity for us to build apartments within the price range of A$600,000-A$700,000,” Khor said. “The growth opportunity in Australia is strong with both our projects Fulton Lane and Parque Melbourne being fully sold out.” - The Star