SP Setia shareholders approve purchase of I&P Group

SHAH ALAM: SP Setia Bhd, which received shareholders’ approval to acquire the entire equity interest in I&P Group Sdn Bhd for RM3.65 billion, plans to be less aggressive in terms of its sales target next year to focus on adding value to its additional landbank.
Previously, analysts opined that the group’s RM4 billion sales target for 2017 is “overly aggressive” although the developer was optimistic that it can achieve the target despite soft property demand and stricter lending policy.
Speaking at a press conference after the group’s EGM today, president and CEO Datuk Khor Chap Jen said the group is “positive” on achieving its sales target this year, but added that “there is still a lot of work to be done”.
Khor said it is too early to come up with its sales goals for next year but plans to do not less than its RM4 billion target this year.
“Next year, we will not be so aggressive. We will take our time and make sure we add value to our additional land. Some of the land are very strategic and some of them are in very matured area. So we want to ‘sweat’ the land more,” he said.
“During the first month of 2018, there will be a lot of planning, until the second half onwards to 2019 you can see us rolling out a lot of projects,” he added.
Commenting on the property market outlook, Khor said the group expects to see some “pick-up” in 2018, noting at the moment the market is quite flat.
“We think the market actually has hit the bottom. We do think that 2018 will pick up, but whether strong or slow, it depends on whether there are catalysts.”
Khor said the group views the I&P purchase as a synergistic acquisition given their projects’ vicinity as well as engaging in the similar nature of business.
“If you look at I&P’s land, they are (located) in Klang Valley and Iskandar Malaysia, where we actually (already) have a strong presence. And there are also new areas where SP Setia doesn’t have presence.
“Besides, all of their staff have been doing township development. To expand, you need good experienced people. So I think this is a very good match,” he said.
Upon completion of the acquisition, SP Setia’s landbank will increase more than 70% to 9,728 acres, with its prime landbank growing significantly in the central part of Klang Valley and Johor Baru.
At the EGM, all its resolutions were passed, including the group’s acquisition of 342.5 acres of land in Bangi known as Bangi Estate for RM447.58 million.
SP Setia gained 13 sen or 3.81% to RM3.54 with 6.33 million shares done today.