SP Setia remains optimistic, plans new launches

Malaysia's most valuable property developer is unfazed by the recent increases in fuel and raw material prices, and is optimistic of brisk sales during these trying times

SP SETIA Bhd, Malaysia's most valuable property developer, will continue to launch new projects this year despite tougher business conditions.

It aims to launch two projects worth RM1.2 billion before its fiscal year ends on October 31 2008.

They are Setia Sky Residences, the group's maiden luxury condominium project at the intersection of Jalan Tun Razak and Jalan Raja Muda Abdul Aziz Shah, Kuala Lumpur, and the second wave of its Setia Walk integrated commercial and residential project in Pusat Bandar Puchong.

SP Setia will also launch new phases within existing townships by October, executive director and chief operating officer Datuk Voon Tin Yow said.

Voon told Business Times in Kuala Lumpur recently that SP Setia is unfazed by the recent increases in fuel and raw material prices. In fact, it is optimistic of brisk sales during the current trying times.

For Sky Residences, the group is projecting a gross development value of RM850 million, pegging each unit at an average RM850 per sq ft.

It is positioned as an "urban chic" development targeted at sophisticated urbanites aspiring to live and work close to the city.

"We will proceed with the project based on feedback from clients.

"So far, there has been no new launches in that area in this price range. So we are quite optimistic of the product," Voon said.

For Setia Walk, it will launch 800 units of service apartments worth RM280 million to RM300 million in four phases starting September.

"As far as market is concerned, there is opportunity to buy. If people wait and see, prices would rise further. What is possible is that property prices would not come down for new launches," Voon said.

"It won't be viable to maintain the selling price for new products because of fixed land and construction cost," he said.

Voon believes the current market scenario is short term and the situation will improve.

"If people hold back on buying, there will be less launches, which may lead to shortage of supply of new units," he added.

SP Setia has 1,937ha in Penang, Johor, Klang Valley and Kota Kinabalu, Sabah, with 16 ongoing projects worth RM30 billion. It is confident of meeting its RM1.5 billion sales target this year.

The company made a net profit of RM260 million on revenue of RM1.15 billion in 2007.