Sime Darby Property Plans Up to RM2.5bil Projects
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Sime Darby Property Bhd plans to launch RM1.5bil to RM2.5bil worth of projects in its financial year ending Dec 31, 2019.
This is up to 2,000 to 3,000 units, of which an estimated 60% shall comprise landed residential properties and priced below RM750,000.
Additionally, the group will focus on strategic partnerships to develop industrial and logistic properties, which will serve as a catalytic development for its townships, diversification beyond traditional products and increasing its recurrent income in the long term.
Speaking at the group’s results briefing , Sime Darby Property group managing director Datuk Seri Amrin Awaluddin said he saw growing demand for industrial and logistic properties stemming from trade activities.
“Apart from monetising and developing our township, we will also be creating assets that will generate long-term rental income for the group.
“We have set an internal target whereby in 2020, 10% of the group’s profit before interest and tax will be derived from recurring income contributed by rental and property investment.
“This is part of our mid to long-term strategy.
As a mature property company, we should have diversified revenue sources, from rental income and investment yield,” he said.
Amrin elaborated that this strategy shall enable the group to withstand the ups and downs of the property cycle, as the recurring income would help sustain the group’s revenue and support its operations.
Sime Darby Property is currently partnering Japan’s Mitsui & Co and Mitsubishi Estate Co Ltd to develop a managed industrial park in Bandar Bukit Raja.
Besides that, the group is expected to commence operations of a new mall - Galleria, KL East - in the fourth quarter of the year.
This will add to its existing investment portfolio which will support the growth of recurring income.
Meanwhile, chief operating officer of township development Datuk Wan Hashimi Albakri Wan Ahmad Amin Jaffri said it is still too early to see the impact of the stamp duty exemption on property sales.
The stamp duty exemption comes as part of the ongoing six-month Home Ownership Campaign 2019, which was announced during the tabling of Budget 2019 in November last year.
“We have not seen much improvements in terms of sales (in line with the stamp duty exemption), and we reckon that many are holding back from purchasing properties until after the launch of the national home ownership scheme,” said Wan Hashimi, who is also vice-president of Real Estate and Housing Developers’ Association.
He added that the stamp duty exemption would not likely be extended until year-end as this would affect the government’s coffers.