Property - Setia Eco City

Introduction of Setia Eco City, Kuala Lumpur

SP Setia in JV with DBKL on mega project near Mid Valley
by Siow Chen Ming, 27 Mar 2008 4:21 PM
THEEDGEDAILY

KUALA LUMPUR: SP Setia Bhd is set to finalise a joint venture (JV) agreement with Dewan Bandaraya Kuala Lumpur (DBKL) to develop high-rise residential cum commercial project on a 20-acre (8.1ha) plot located opposite the Mid Valley City.

Speaking to reporters at Invest Malaysia 2008 yesterday, SP Setia’s managing director Tan Sri Liew Kee Sin said the company secured an approval from the Economic Planning Unit (EPU) seven years ago for the project.

Although it had subsequently signed a memorandum of understanding (MoU) a few years ago with the DBKL, a privatisation agreement is still pending.

“We expect to finalise a deal with DBKL soon and launch the project next year,” said Liew. However, he declined to reveal the value of the project.

Squatters residing on the land were relocated to nearby apartments recently, indicating that the project is making progress.

The JV between SP Setia and DBKL will be similar to previous deals such as the one between IGB Group Bhd and DBKL for the now completed Mid Valley City project. Under such deals, DBKL would provide land while developers such as SP Setia or IGB carry out the development work and invest in the infrastructure.

Heading the country’s largest property developer, Liew said he was positive on the recent changes taking place in the country’s political landscape.

“I think the changes are good for the country, even though some of my friends have lost (in the election). It is good to have competition (in the political landscape) and because things will get better,” said Liew.

For instance, in Penang where SP Setia has major on-going property projects, he felt there should not be any problems as the new Chief Minister Lim Guan Eng has called for more openness and transparency, which has always been the group’s practice.

Having gone through the 1998 financial crisis, Liew was also unfazed about a potential slow down in the domestic economic growth that may affect property sales.

He said the group’s exposure in the property sector was well spread out, covering different regions with different products for several market segments. With certain adjustments of the project’s portfolio, the group can capture the market segments where demand is still strong.

Also, SP Setia’s property development projects in Vietnam was picking up steam and this would reduce the group’s dependence on the Malaysian market.

“Our target is that by 2012, contribution in terms of turnover and earnings from our overseas projects will be higher than Malaysia,” said Liew.

SP Setia is on track to meet sales target of RM1.8 billion for the current financial year ending Oct 31, 2008. This figure is within reach as sales have already reached RM646 million for the first four months of FY2008 compared to RM290 million in the same period last year.

SP Setia planned to launch five projects in FY2008 with total gross development value (GDV) of RM5 billion. The group has a remaining landbank of 4,783 acres (including in Vietnam) which are sufficient for its volume of development works over the next 10-12 years, with estimated total GDV of about RM30 billion.