Property market to stay soft on impending GE14, says Selangor Properties

KUALA LUMPUR (Feb 28): Property developer Selangor Properties Bhd (SPB) anticipates the local property market to remain soft this year against the backdrop of the impending 14th general election (GE14), which causes uncertainties in the market.

Its chief operating officer Chong Koon San said the property market in Malaysia has been soft since 2014 and there will be uncertainty in the shorter time before GE14, adding that this continues to affect market sentiments.

"It (property market) has been soft since 2014, we don't see it is picking up this year and furthermore it is an election year.

"There are uncertainties during election and people usually want to wait until it (election) settles. So this year, perhaps it (property market) will remain soft and hopefully towards the end of the year when election settles, it will pick up," he told reporters after the group's annual general meeting today.

Additionally, Chong said looking at the Malaysian property market itself in terms of retail spaces, offices and residentials, the supply has overwhelmed the demand.

"The government's blanket restrictions for the higher price of condominium development have impacted us because our land is prime land so it is hard for us to develop lower to medium houses on that land. If we have to develop those houses, then we need to find cheaper land.

"Basically the market needs to adjust by itself because ultimately it will adjust if the demand is not there. Developers will look at the strategy as what they need to do," he added.

Commenting on the group's financial performance, SPB director of finance Lee Tart Choong said the group expects to deliver "stable" profit and revenue growth for current financial year ending Oct 31, 2018 (FY18), excluding the foreign exchange (forex), currency fluctuation and fair value gains.

Lee said for the past two years, SPB has benefited from the weakening ringgit and managed to make forex gains, however this year there would be some reversal of gains as the ringgit continues to strengthen.

"Apart from the forex risks, we would be on track to deliver stable profit and revenue just like what we did last year (2017).

"For overseas investment, we would likely see forex fluctuation, but in terms of other segments like property investment and property development, the income and profit level should remain the same," he explained.

For the full financial year ended Oct 31, 2017 (FY17), SPB's net profit rose 37.46% to RM92.6 million, from RM67.36. Revenue climbed 15.91% to RM140.17 million, against RM120.93 million.

At 12.30pm, SPB shares traded unchanged at RM4.74, giving it a market capitalisation of RM1.63 billion. —

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