MAJOR PROPERTY DEALS: Part of company's blueprint to hit RM1b profit, says source
The projects will cost Sime Darby a few billion ringgit over their short- to medium-term development period, a source familiar with the group said.
"This is part of Sime Darby's five-year blueprint to achieve a pre-tax profit of RM1 billion from its property division by 2016 from RM460 million achieved in its latest financial year ended June 2012," the source said.
The source said the group plans to increase contribution from property investment to 20 per cent in 2016 from about five per cent of overall group revenue now.
"Property development accounts for about 95 per cent of Sime Darby Property's revenue," the source added.
Sime Darby's potential venture in Australia especially will bolster Malaysia's property acquisitions there.
Malaysians are the fourth largest group of buyers when it comes to snapping up residential and commercial properties in Australia, according to Jalin Realty International.
Jalin Realty told Business Times recently the figures were derived from the Foreign Investment Review Board, a non-statutory body that advises the Australian government on foreign investment policy and its administration.
Meanwhile, the source noted that the Battersea Power Station (BPS) project in London is also part of Sime Darby's blueprint to achieve the RM1 billion profit.
Sime Darby is part of a Malaysian consortium that owns the BPS, one of London's landmark buildings.
The consortium, which includes SP Setia Bhd and the Employees Provident Fund (EPF), paid STG400 million (RM1.97 billion) for the 15.78ha site.
Sime Darby and SP Setia each owns a 40 per cent stake in the joint-venture company, Battersea Project Holding Company Ltd, that will redevelop the site. EPF holds the remaining 20 per cent.
The gross development value of the 15-year project is expected to be around STG8 billion (RM40 billion) with the maiden launch expected in the first half of 2013.
By Business Times