This article first appeared in The Edge Financial Daily, on February 26, 2016.

KUALA LUMPUR: Property developer S P Setia Bhd is targeting to launch in 2016 RM4.7 billion worth of projects comprising mostly new phases for its existing projects, including Setia Alam, Setia Eco Hills and Setia Eco Glades.

S P Setia acting president and chief executive officer Datuk Khor Chap Jen told reporters yesterday that the group is targeting to launch 8,000 units this year, of which some 30% will be affordable housing.

“We [will] have landed properties, [which are] mid-range landed terraces for Setia Alam, Setia Eco Hills and Setia Eco Glades. We [will] also have condominiums in selected projects like KL Eco City,” he said.

Besides new phases for its existing projects, the group will be launching two new developments, namely Setia Eco Hill 2, a continuation of its first Setia Eco Hill project in Semenyih, and the Setia Eco Templer in Selayang.

Khor said Setia Eco Templer, which carries a gross development value of RM2 billion, is near the forest reserve and the former site of Templer Park Country Club. It will be launched around the middle of this year.

“We intend to develop a gated lifestyle landed development there, with some pockets of high-rise condominiums and mixed commercial [projects]. It will follow the model of Setia Eco Glades,” he said.

On the delay in launching the project, Khor cited the challenging economy last year and some technical issues that had to be sorted out.

“[Now] it has all been sorted out. We are on track for our launching in mid-2016,” he said.

There was no previous launching date for Setia Eco Templer, but under the initial agreement signed in 2013 for the development of the land, the conditions of the contract were supposed to be met on Feb 6, 2016, which has been postponed till April 20, 2016.

Meanwhile, the group will also be launching its third project in Carnegie, Melbourne, Australia, worth A$34 million (RM103.27 million), comprising low-rise apartment units. The development follows the positive reception of its first two projects in Melbourne, namely Fulton Lane and Parque Melbourne, which have been fully sold out.

With its planned launches this year, S P Setia is targeting to achieve sales of RM4 billion for its financial year ended Dec 31, 2016 (FY16), similar to its FY15 target.

Khor said the challenging conditions provide opportunities for the group to acquire land at reasonable prices, with S P Setia actively seeking to grow its land bank both locally, especially in the Klang Valley and Johor, and abroad in Australia.

For the 14 months ended Dec 31, 2015 (14MFY15), S P Setia registered a net profit of RM918.26 million. There is no comparison figure as the company changed its financial year end to Dec 31 from Oct 31 previously.

Revenue for the financial year jumped 74% to RM6.75 billion from RM3.87 billion in the previous year.

The group also recommended its highest dividend payout yet at 19 sen per share for FY15, subject to shareholders’ approval.

“In spite of the difficult market conditions, the group achieved RM4.3 billion sales for the 14-month period. Approximately 67% of the overall sales performance was derived from the local market, surpassing our initial target for Malaysia’s operations, with the remaining derived from international sales, of which RM1.2 billion came from the Battersea Power Station, London in the UK,” he said.

This year, Khor said local sales are expected to contribute about 80% of the group’s sales, while overseas projects are expected to contribute a smaller portion of 20%, as most of its overseas projects are sold out.

S P Setia closed unchanged at RM2.89 yesterday, valuing it at RM7.6 billion. 

Separately, SP Setia announced that its independent non-executive chairman Tun Zaki Tun Azmi has resigned, together with its non-independent non-executive director Zainal Abidin Jamal.

In the interim, Tan Sri Dr Wan Mohd Zahid Mohd Noordin has been appointed as chairman of the group.