This article first appeared in City & Country, The Edge Malaysia Weekly on November 14, 2022 - November 20, 2022

No.1 | S P Setia Bhd + Best in Qualitative Attributes

After a challenging year, S P Setia Bhd has broken through the sluggish market conditions to emerge as No 1 in the Top 10 list of The Edge Malaysia’s Top Property Developers Awards once again. Being consistently ranked No 1 for 14 years, inclusive of this year out of 20, is testament to its forward-thinking executives and the Team Setia spirit. Continuing this legacy and looking to boost its forward momentum is Datuk Choong Kai Wai, who took the helm as president and CEO last year.

He believes there are four main areas or engines that will propel the group to greater heights: (i) continuing focus on its township developments; (ii) managing and fulfilling the promises of its long-term projects (such as Battersea Power Station in London, UK); (iii) activating and upvaluing at least RM2.4 billion worth of land that is underutilised and also to pare down the group’s gearing and clear unsold stock; and (iv) building its investment properties such as malls and schools, as well as industrial parks and healthcare facilities.

While Choong is under no illusion that this will be an easy journey, he and his team are confident that they will not only be able to meet the expectations set for themselves, but also those of their stakeholders. On top of that, Choong enjoys what he does.

“I like to say, ‘When I am working, I’m playing, when I’m playing, I’m working.’ I am one of the very fortunate few who really love their job. It is sad if you don’t love what you do. I am very blessed in that way,” he says with a smile.

Below is an excerpt from the interview with Choong as he shares the group’s achievements, goals and plans.

Datuk Choong Kai Wai: In FY2020, we did an impairment in one of our projects in Johor and also in Battersea Power Station, so we had to make adjustments. In FY2021, the turnaround was because we had completed what we needed to impair and so we made a profit after tax of RM347 million.

For the six months ended June 30 this year, the group secured total sales of RM1.67 billion. Local projects contributed RM1.38 billion or approximately 83% of sales, while the remaining RM294 million or approximately 17% came largely from international sales.

The revenue of RM3.7 billion [in FY2021] came from local sales and a bit from international sales, a ratio of 85:15 because overseas sales were very lumpy.

Of the international projects that performed well, Sapphire by the Gardens [in Melbourne, Australia] is 97% sold, UNO Melbourne is 88% sold and Daintree Residence in Singapore is 100% sold. Of all the overseas markets, Australia was the most active.

As for expansion plans [in Australia], we have the manpower but will be very selective. Whether it is greenfield or brownfield land, any project we do, we will first conduct a feasibility study. If it gives a good return, we will invest but it is likely to be in a city with a growing population.

In Vietnam, we have formed Setia Becamex, a joint venture with leading Vietnam real estate developer Becamex. We will develop two projects there: the 226ha EcoLakes in Binh Duong province and the 10.8ha EcoXuan in Lai Theu.

By 2027, we target sales of RM6 billion. The target will increase incrementally over the years. To achieve this on the local front, we are growing organically from strength to strength through our townships. And we are branching into industrial properties.

Some sales will come from overseas. In Vietnam, we are doing well; some will come from there. In Australia, we are well established. It is a brand by itself and will continue to remain one.

So, about RM1.5 billion will come from overseas sales, depending on market demand. We only develop property where there is demand.

I always look to develop projects in a city or place where the population is growing. Melbourne and Sydney are growing, as is Vietnam. That is the first thing we look at. Of course, the [economic] stability, clarity in planning … all this will reduce our risk.

For industrial projects, we have a 400-acre parcel in Setia Alaman. We have signed an MoU (memorandum of understanding) with an international company to develop the site. The land is currently being converted from agricultural to industrial use. The other is Taman Industri Jaya in Johor, which was unveiled in early October.

We also have a lot of land bank and are looking to unlock the value of some. We have expanded in Battersea Power Station, we’ve expanded in Federal Hill; we want to open other avenues for growth.

In collaboration with Tenaga Nasional Bhd, we installed solar panels on the roof of our corporate headquarters on Sept 28. The plan is to install solar panels in another six commercial properties such as Setia City Mall, Setia City Convention Centre 1 and 2, Setia EcoHill Club 360, and at the welcome centres of Setia Alamsari and Setia Tropika. We hope all new houses can be equipped with solar panels and plan to design homes to be EV-ready.

Also, I hope to have installed in our houses a master green switch that will turn off all the power except for essential items. Whether it is a low-cost house or a bungalow, I want all to have this master green switch.

It is simple and cheap … you simply have to do the wiring at the start. I want all developers to install a master green switch. It isn’t about money. It is to save the planet. Let us do our part.

I also hope to install water dispensers throughout the office and common areas in our integrated developments so we do away with single-use plastic bottles.

Socially, we have our education foundation to help the less fortunate. Also, during the pandemic, we helped by having our convention centres serve as vaccination hubs.

Governance-wise, we have set up an integrity and governance unit. Integrity is very important to me. Any company without integrity will go down.

The plan is consolidation because we expanded a lot over the years … to reduce the group’s gearing.

In the mid-term, [we want] to make ourselves more efficient because it is getting more and more competitive; to accelerate all our developments like in Setia AlamImpian.

Look at new businesses and make it more holistic. New businesses like industrial projects, and we are looking for good land for senior living development. We will be taking baby steps. Property development is a long-haul game.

Also, we are looking to do catalytic developments to activate ‘lazy’ assets in our townships, such as petrol stations, schools or hospitals. Basically, to unlock the land.

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