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Wednesday, November 16, 2011

SP Setia to kick-start RM6b project early 2012

SP Setia Bhd will kick-start the first phase of the RM6 billion KL Eco City project by as early as next year.

The first involves the building of RM2 billion worth of high-rise residential units.

The company's plan for the project received a boost after it managed to secure RM460 million financing facilities.

"We have started works. We are doing soil testing, piling works and so forth," SP Setia president and chief executive officer Tan Sri Liew Kee Sin said.

The project, which has a total gross development value of RM6 billion, is expected to take 10 years to complete. The first phase will take about three to four years.

It is a joint-venture project between SP Setia and Kuala Lumpur City Hall.

"The KL Eco City will be our biggest property project in Kuala Lumpur," Liew said at a media briefing after the signing ceremony for the syndicated Islamic financing facility and launch of KL Eco City yesterday.

Also present at the launch was the Minister of Federal Territories & Urban Wellbeing Datuk Raja Nong Chik Raja Zainal Abidin.

The facility is provided by three Islamic financial institutions, namely HSBC Amanah Malaysia Bhd, Hong Leong Islamic Bank Bhd and Bank Muamalat Malaysia Bhd.

Although the development of the property may raise concerns of oversupply of high-rise residential properties, analysts remain optimistic that the project will have a good start.

"There will be demand for the property ... the location is very strategic. I believe the only concern buyers may have is traffic congestion on that area, even that, I believe works are being done to address it," said Mercury Securities head of research Edmund Tham.

SP Setia will be investing more than RM150 million to build dedicated interchanges to directly link KL Eco City to all major expressways coupled with an internal two-tier road system.

"It's also part of our commitment to solve the traffic problems first, so that by the time phase one is ready, traffic problem of that area will be resolved already," said Liew.

Meanwhile, Liew said SP Setia is waiting for the offer documents from Permodalan Nasional Bhd (PNB) for its shareholders to decide whether to sell their shares to the country's biggest fund manager.

He ruled out the possibility that SP Setia would convene an extraordinary general meeting to discuss the PNB takeover bid as reported in a newspaper.

"There will be no such meeting. It's all lies. It's in the shareholders' hands whether to sell or not to sell (their shares)," he added.

By Business Times

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