SP Setia unveils RM30m bungalow

KUALA LUMPUR: SP Setia Bhd plans to sell “super high-end” bungalows priced at RM30 million each next year — making it the country’s first property developer to venture into this property segment, its group managing director and chief executive officer Tan Sri Liew Kee Sin said.

For a start, Liew said it had targeted to sell 15 units of such bungalows at Kenny Hills in Kuala Lumpur, over a period of two years beginning 2008, pending the authorities’ approval on the building plan.

“Hopefully, we will get all approvals by next April or May,” he said, but declined to provide specifications of these bungalows.

Speaking to reporters after a RM500 million bond issue signing ceremony here yesterday, he added that the idea of the RM30 million bungalow was part of its plans to diversify its range of property products. Currently, its properties are mainly marketed under “Setia” and “Eco-” brands.

Liew said: “We are shifting ourselves to be a full-range developer from a developer of normal housing because these two brands can sustain us only for this number of years.

“We want to extend ourselves to the other part of the business cake. We are going into condominiums and super high-end bungalows, and commercial development.”

On the group’s venture into Vietnam’s property market, he expected its upcoming residential project there to contribute 10% to the group’s earnings in the financial year 2010 despite the stiff competition in the property market there.

He said Vietnam, being an open economy and already full of foreign players, was a challenging market but SP Setia would strive to replicate its Malaysian success in Vietnam.

“Vietnam is a big market. It has 85 million people. We have a long way to go in Vietnam.

It’s good to concentrate, to focus on what you are doing.

“To strengthen ourselves in Vietnam and having (gained) a foothold in Vietnam, we like to do what we did here, that is to be number one,” he said.

SP Setia announced in June that it had teamed up with Vietnam’s state-owned conglomerate Becamex IDC Corp and Treasure Link Far East Ltd to develop an integrated township project on a 226ha land in MyPhuoc Industrial Park of the Binh Duong province, 40km north of Ho Chi Minh City, with a gross development value of RM2.1 billion.

Liew said the project, initially targeted to be completed in seven years, could finish in five years in view of the strong economic growth and huge population in Vietnam.

He said the joint venture company was still waiting for the licence from the Vietnamese authorities, and targeted to launch the first phase next year. It also planned to go to Hanoi, he added.

Other than Vietnam, he added that the company had no plan to venture into other overseas market at the moment.

Yesterday, the signing ceremony between SP Setia, Aseambankers Malaysia Bhd and United Overseas Bank (Malaysia) Bhd (UOB) was for a RM500 million bond issue with detachable warrants. Aseambankers is the principal adviser and lead arranger, while the joint lead managers are Aseambankers and UOB.

RAM Rating Services Bhd has assigned a long-term rating of AA3 to the bonds, which indicates a high safety for timely payment of interest and principal.

Of the RM500 million raised, RM200 million will be used to repay borrowings that carry higher interests, while the remaining will be used to finance its new projects, especially the commercial developments.

SP Setia will announce in mid-December its results for the financial year ended Oct 31, 2007. Liew said it achieved some RM1.2 billion of sales in FY07, and that the earnings would be better than that of the the previous year.

By The EDGE (By Gan Yen Kuan & Lim Yu Min)