SP Setia must take possession of Pisa first

The timing of property developer SP Setia Bhd's new launches for its 2012 fiscal year in Penang appears to hinge on whether the company is given vacant possession of the Penang International Sports Arena (Pisa) by the first quarter of this year to build the RM300 million Subterranean Penang International Convention and Exhibition (sPICE) Centre.

Business Times has learnt that the property giant's application for planning approval to proceed with its upmarket Setia V Residences project along Gurney Drive cannot be deliberated as yet by the Penang Island Municipal Council, until the time SP Setia takes over Pisa officially.

Three other projects in the pipeline for its fiscal year ending October 31 2012 are located in the Relau and Sungai Ara areas.

The company on January 3 took over as operator of the building and it has already ploughed in RM1 million to spruce it up, sources say.

"The problem now lies in the fact that SP Setia is unable to avail itself yet of the increased density privilege it was accorded as part of the sPICE deal," one source said.

SP Setia was granted the right to build an additional 1,500 residential units over and above the density limit of its existing and future projects in Penang over a 30-year period when it inked an agreement with the Penang authorities last year to build the convention centre.

The project includes 2.8ha public park and an upgraded and refurbished Pisa.

The move for SP Setia to be granted additional density was viewed positively by analysts who noted that it would enhance the gross development value of some of the company's proposed high-rise projects.

Based on the existing density limit, it is learnt, Setia V Residences can only build about 50 units on the 0.8ha site, which has a dual frontage of the sea-fronting Gurney Drive and Jalan Kelawai in Pulau Tikus.

Analysts had also hailed the fact that with the additional density, SP Setia would now have a competitive edge over other developers in bidding for land in Penang, since it would be in a position to pay higher land costs, given the company's ability to build beyond the "normal" allowed density.

SP Setia officials could not be reached for comment.

Under the agreement signed in August last year between Penang island Municipal Council and SP Setia's subsidiary, Eco Meridian, the proposed sPICE Centre will feature a basement car park and a green park on the roof top. The project, which is expected to be completed by 2014, includes a 2.8ha public park, refurbishing, repairing and upgrading Pisa and the Aquatic Centre as well as construction of a new hotel, retail outlets and a car park.

By Business Times