MCO 2.0 to cause delay in property market recovery, says Sime Darby Property

KUALA LUMPUR (Feb 26): Sime Darby Property Bhd, Malaysia’s largest property developer in terms of land bank, today said the movement control order (MCO) 2.0 and emergency order will affect property sales and cause delay in the recovery of the property market. 

Speaking at the group's financial results virtual briefing today, Sime Darby Property group managing director Datuk Azmir Merican said it expects residential market outlook for the year to remain flattish with recovery likely to be delayed to 2022. 

“We saw a drop in both volume and value of residential transactions in the first nine months of 2020 with Selangor witnessing a huge decline of 19%, followed by Kuala Lumpur by 17%,” he said.

However, he expects the home buyers to take advantage of the current low interest rates to purchase their houses, adding that the ongoing Home Ownership Campaign (HOC) incentives, attractive offers and promotions will help sustain demand for residential properties.

“In the retail market segment, the recovery is highly dependent on the development and availability of the Covid-19 vaccines,” Azmir said. 

He added the retail sector in Klang Valley will continue to see a shakeout where the poorly designed and inferiorly located malls will be forced to close or be converted to some other alternative.

Meanwhile, for its industrial segment, Sime Darby Property views rising demand for e-commerce and logistics will help to boost the recovery in the segment for 2021. 

The group also highlighted its RM2.4 billion sales target for FY21 and said it will launch projects with a gross development value (GDV) of RM2.5 billion this year, including a product mix of landed and high-rise residential as well as industrial and commercial offerings.

Earlier, the property developer company announced that its net loss narrow to RM55.93 million in the fourth quarter ended Dec 31, 2020 (4QFY20), from RM355.26 million in the preceding quarter, following a gradual recovery in its property development segment.

However, the group’s revenue grew 19% to RM705.19 million from RM592.63 million in 3QFY20.

Loss per share was 0.8 sen against earnings per share of 1.5 sen in the previous year. 

For the full-year period (FY20), the group sank into the red with a net loss of RM478.8 million from a net profit of RM598.53 million in FY19 as all its three business segments registered losses due to the Covid-19 pandemic. 

At noon break today, shares of Sime Darby Property were unchanged to 57.5 sen, valuing the group at RM3.91 billion. 

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates

Click here for more property stories.