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Thursday, February 28, 2008

SP Setia to widen revenue base

It targets commercial property, overseas projects

KUALA LUMPUR: SP Setia Bhd, which is developing townships and niche projects in the Klang Valley, Penang and Johor, is aiming for a broader revenue contribution base by 2012.

Group managing director and chief executive officer Tan Sri Liew Kee Sin said the company was targeting a larger contribution from integrated commercial property projects within matured townships, high-end condominiums and overseas property projects in five years.

Tan Sri Liew Kee Sin (right) and company directors at the AGM

“We’re moving away from the traditional market segment of link homes as there won’t be much growth if we just continue developing them,” he said after the company AGM yesterday.

Liew said 80% of revenue in the last financial year was contributed by this segment.

There would be more launches of “Eco” brand residential properties, high-end condominiums as well as integrated commercial properties, he added. The “Eco” brand is SP Setia’s high-end brand.

“We’re aiming for sales of RM1.8bil for the financial year ending Oct 31 (FY08), of which RM1.5bil will be in Malaysia and the remainder in Vietnam,” Liew said, adding that sales would be RM600mil higher than FY07.

SP Setia entered the regional property development scene last year when it signed a joint-venture agreement with Becamex IDC Corp of Vietnam to develop a mixed development project in My Phuoc. A second joint-venture agreement was signed recently with Saigon Hi-Tech Park Development Co for a mixed development project.

Liew said the first phase of the RM2.1bil EcoLakes project at My Phuoc to be launched in April or May, would comprise three-storey link homes.

“Property development in Vietnam will only grow over time; we may launch our other project there next year,” he said. Both projects are located near Ho Chi Minh City.

Liew said there were no plans as yet to scout for property projects in Hanoi. “We’ll invest in Hanoi only when we find a location where we’re able to implement our development concept and where the joint-venture partner sees value in having us on board.”

Apart from the Vietnam launch, Liew said the RM1bil Aeropod @ Tanjung Aru, near Kota Kinabalu, would be launched in six months after the finalisation of the development plans.

Other launches for the year include Duta Grande in June or July, comprising 15 bungalows priced at RM30mil each, and Setia Sky Residences, a RM700mil condominium project located near the National Heart Institute in downtown Kuala Lumpur that will be priced at an indicative RM750 psf.

For FY07, the company posted a net profit of RM260mil on revenue of RM1.15bil.

By The Star

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