SP Setia unit to buy land in Johor for RM169.26m, planned GDV RM1.5b

KUALA LUMPUR: S P Setia Bhd's unit is buying 259.1 acres of land in Johor for RM169.26 million cash to replenish its land bank as the Setia Indah Johor development was at its tail-end.

S P Setia said on Thursday, Sept 9 its unit Setia Indah Sdn Bhd had entered into a conditional sale and purchase agreement with from Kelana Ventures Sdn Bhd to acquire the land.

Based on a preliminary feasibility study and revised layout plan, the proposed development is expected to have a gross development value of RM1.5 billion. Development was expected to start by end of 2011 and span over eight  years.

“However, it is currently too preliminary to ascertain the total development cost, the expected completion date of the development and the expected profits to be derived from the development of the land,” it said.

S P Setia said the acquisition would be wholly in cash from internally generated funds and/or external borrowings.

It said the acquisition would enable the company to continue to benefit from the strong branding it had achieved in that locality. It is also in line with the group's wider strategy of continuing to acquire strategically located prime land in Johor Bahru, it said.

The company said site was near other matured developments such as Taman Mount Austin and Taman Daya and hence also offered several important advantages, in particular the sustained potential demand from upgraders in the area desiring to move-up to larger, newer and better designed houses.

“Another source of demand is from young adults planning to move out of their parents' homes without having to leave the comforts of the local support network that they have grown accustomed to.

“Further, the existing population of the surrounding matured housing projects will also form the core catchment area for the proposed development's commercial components,” it said.

S P Setia was confident that the proposed development of mixed residential and commercial project on the land would be well received, and contribute positively to its future earnings and cash flow.

“The proposed development will also ensure S P Setia's continuing presence and efforts in building residential properties in Johor,” it said.