SP Setia cautious about launching new projects in northern M'sia this year

GEORGE TOWN (Feb 12): The country's largest property developer SP Setia Bhd (fundamental: 1.4; valuation: 1.2) is cautious about launching new developments in Malaysia's northern region this year due to the country's economic uncertainties.

SP Setia general manager (property, north) Ng Han Seong told reporters that the group has only one development with a gross development value (GDV) of RM600 million in Solok Slim off Jalan Hamilton here, which it would launch by year end.

"We are adopting a cautious attitude and will be selective about launches this year, depending on the demand of the buyers. We will try to draw up projects based on what the market wants.

"It does not necessarily fall under the definition of affordable housing, [as] specified by the state. We have the ability to adjust to market conditions. There is a lot of economic uncertainties and people are facing problems obtaining loans," he said.

"However, we are not the only developer doing this. Most have taken on that approach, judging from the slowdown in the property market," he observed.

The Solok Slim development will feature highrise condominiums on a 9.5 acre land, Ng said, adding that the project was still in the planning stages and would not be able to divulge further information.

In the meantime, the group would focus on the sale and promotion of its RM320 million GDV Setia Sky Vista development in Relau. The project, which saw a soft sales launch on Dec 6 last year, is seing sales of about 50% so far.

The project is expected to be completed in 2019 and will feature two towers - one 27-storey and the other 32-storey - with 11 layout plans to choose from for its units that range in size from 910 sq feet to 1,479 sq feet.

Ng added that the group would continue promoting its properties to foreigners and locals working in the region, particularly those in Singapore, Indonesia, China and Japan.

"We have about 15% take up rate among foreigners for our luxurious Setia V Residence (RM550 million GDV) in Gurney Drive and 35 Pearl Villas bungalow units (RM139 million GDV) in Sungai Ara," he said.

While the group is also looking at increasing its land bank, Ng said it would take its time to map out developments on its 15 parcels of land measuring some 150 acres in Penang.

Most of SP Setia's land is located in the southern part of Penang island; the rest are in Jelutong, Sungai Nibong and Tanjung Bungah.

Ng was speaking after announcing the group's Chinese New Year celebration programme, which will feature a talk by fengshui consultant Datuk Joey Yap with the official sales launch of its Setia Sky Vista on Feb 28.

"We are in the midst of planning for the development of the 150-acre land bank in the next three years. We must do this ahead although development on these land will span seven to eight years," he said.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)