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Monday, September 13, 2010

SP Setia to grow foothold in landed assets

SP Setia's acquisition of 103.64 hectares of land in Johor and its development prospects may further strengthen the property developer's foothold to capitalise on the boom in the mid-to-high-end landed properties in the country, says OSK Research.

The company bought the freehold development land, adjacent to its Setia Indah township in Iskandar Malaysia, for RM169.3 million or RM15 per square feet, recently.

It said the proximity of the land to other mature developments offers important advantages, especially potential demand among upgraders in the area, wanting to move up to larger, newer and better-designed houses.

The proposed development that would replenish the company's landbank is expected to have a gross development value of RM1.5 billion.

"The land development is envisaged to commence by end-2011 or early financial year 2012, with a development period of eight years.

"The land is expected to be developed into another township with a mix of residential and commercial properties," OSK said in a research note today.

It said earnings contribution, at the earliest, is expected to start from late 2011 (or early financial year 2012) and onwards.

However, as the launching and development details are still sketchy, it is not imputing this into its earnings forecast for now, it said.

By Bernama

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