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Wednesday, July 2, 2008

SP Setia in venture to build RM750m mall

PROPERTY developer SP Setia, via its subsidiary Bandar Setia Alam Sdn Bhd, today set up a company with an Australian-based wholesale real estate development fund to develop a RM750 million retail mall at its flagship township Setia Alam in Shah Alam.

The Lend Lease Asian Retail Investment Fund 2 Ltd is part of Lend Lease Corporation Ltd, a multinational property development group.

SP Setia’s group managing director Tan Sri Liew Kee Sin said the 50:50 joint venture project is expected to contribute to the group by the end of 2011 after its completion.

The joint venture company called Greenhill Resources Sdn Bhd will acquire from Bandar Setia Alam 30.5 acres of freehold land in Precinct 1 for RM119.57 million, which is inclusive of the development cost, for the mall project.

With a gross floor area of about 1.23 million square feet, Greenhill has appointed American-based design architect, The Jerde Partnership, to create an iconic landmark.

Liew said the mall is targeted to be completed by 2011 and planned as a destination regional mall that not only served the Setia Alam and Setia Eco Park townships, but also to attract the larger Klang Valley population.

There are about 350,000 households within the 30-minute driving perimeter of the proposed mall, which is expected to start construction within the next six months, he said.

According to Liew, the mall will help the group achieve its 20 per cent target of building commercial products in the next two to three years from two per cent now.

He said the group has also reserved land around the mall area vicinity should the government decide to extend the light rail transit (LRT) system to that part of Selangor.

On SP Setia’s performance, Liew said the group is confident of posting a better result for its fourth quarter this year following improved sales.

The group, he said, has been registering sales of between RM100 million and RM120 million monthly.

“We are confident of achieving total sales of RM1.5 billion this year from RM1.2 billion last year,” he added.

On the group’s project in Vietnam, Liew said it is still on with the expected launch in October this year despite the economic downturn there.

“What is happening in Vietnam is similar to what we experienced in the 1997/98 financial crisis. Their interest rate is about 20 per cent while ours now is about six per cent,” he said.

According to him, the project will benefit SP Setia in the long run, especially when Vietnam posts a turnaround, adding that the group also expects to buy more land there.

By Bernama

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