S P Setia Bhd’s Penang property sales are expected to contribute RM399 million to the company’s group revenue for the financial year ending Dec 31, 2016 (FY16).

“This is in line with Penang’s annual contribution of about 10% of group sales. The sales revenue from here would come from two launches next year, which carry a total gross development value (GDV) of about RM670 million,” the group’s northern region general manager Ng Han Seong told The Edge Financial Daily recently.

He said sales target for FY15, which has been extended by two months due to the revised financial year ending period, is RM409 million.Ng said the deferred Solok Slim project featuring residential condominums with a GDV of between RM500 million and RM600 million will be launched in April next year.

The project was initially slated for launch in the final quarter of 2015, but a delay in advertising permit and developer licence application arising from the recently enforced Strata Management Act 2013 resulted in its postponement. The other project, consisting of 30 semi-detached units in Setia Pearl Island priced from RM2.5 million onwards, with a GDV of RM70 million, will be launched during Chinese New Year in February, he said.

Ng said the group, which has a land bank of 150 acres (60.7ha) in Penang with a GDV of RM3.5 billion that could last it for 10 years, is still actively looking for land, but mainly on the island. “Penang is a very exciting place and the state government is implementing new infrastructure with the Penang Transport Master Plan. Penang is an important market for us. We are definitely not going to scale down although land is scarce.

“We will continue introducing developments that cater to different income groups,” he said, adding that the group’s development of 459 low-cost apartments with a GDV of RM19 million in Balik Pulau would be completed in the first quarter of 2017.

Meanwhile, the group expects to see higher contribution from its Setia Spice project, which features a hotel, indoor stadium, convention centre, aquatic club, retail shops and a food and beverage podium, from FY17. “The project, which is a redevelopment of the former Penang International Sports Arena, will be completed by the end of next year. We expect contributions to come in from FY17.

“Construction of the 450-room four-star hotel will begin in the first quarter of next year and should finish in 2019,” he said.

Source: TheEdgeMarkets.com