Sime Darby Property upbeat, banks on location and pricing of new launches

KUALA LUMPUR: Sime Darby Property Bhd, which has some 2,000 unsold units, both stratified and landed, remains cautiously optimistic on its outlook with launches of some 1,950 units planned between now and June this year on the strength of location and affordable pricing.
"Some areas in the property market are very challenging but, for us, some focus products are doing quite well," its managing director Datuk Seri Amrin Awaluddin told a media briefing on the group's financial performance today.
Sime Darby Property is confident that its product offerings priced between RM400,000 and RM800,000 will be well received by the public, with plans to launch 1,950 units by June this year, including those in the Elmina West, Denai Alam and KL East projects.
The take-up rate for 1,278 units launched from July to December 2017, was 47%.
In a bid to sustain the profitability in the wake of the slowing property market, Amrin said, Sime Darby Property will embark on asset monetisation activities in the next few years, especially its landbank in Sabah (300 acres) and Kedah (1,600 acres), respectively.
“We’re more focused on the Klang Valley and the West Coast of the peninsula, so we’re looking to unlock value of land that is not within our coverage area.”
Currently, Sime Darby Property has 20,743 acres of landbank with a gross development value of RM100 billion.
For FY18, it is targeting RM2 billion sales after securing RM1 billion sales in the first half, with 1,148 units being sold, a 33% growth compared with the same period a year ago. As at end-December, unbilled sales stood at RM1.6 billion.
Going forward, the group is also looking to form partnership with local and international players to develop industrial properties in Bandar Bukit Raja, Serenia City and Bandar Universiti Pagoh.
Sime Darby Property today reported a 5.1% drop in net profit to RM138 million for the second quarter ended Dec 31, 2017, from RM145.4 million in the previous corresponding period on higher taxation. First-half net profit, however, jumped 90.1% to RM559.8 million, against RM294.5 million a year ago.
Speaking of the progress of the RM290 billion Malaysia Vision Valley (MVV) project in Negri Sembilan, Amrin said infrastructure work has started, after the memorandum of understanding for the project was signed about 10 months ago.
“There is development here, work has started for the Nilai-Labu-Enstek Expressway project undertaken by the federal and the state governments, and there is also significant progress for the Senawang-KLIA expressway.”
He stressed that any development has to have proper infrastructure and connectivity before it can attract investors. “When that is in place, then you can bring in investors ... hopefully this year and next year, you'll be seeing a lot of activities here (MVV).”
Spanning 153,000ha of land, MVV will be jointly developed by Sime Darby Property, Kumpulan Wang Persaraan (Diperbadankan) and Brunsfield Development Sdn Bhd.
 
On Bursa Malaysia today, Sime Darby Property closed 8 sen or 5.9% higher at RM1.43 on 5.72 million shares done.