BY S. PUSPADEVI
![Top management: (from left) SP Setia executive vice-president and CFO Choy Kah Yew, Khor, chairman Tan Sri Dr Wan Mohd Zahid Mohd Noordin and deputy president and COO Datuk Wong Tuck Wai after the briefing.](https://d35w1c74a0khau.cloudfront.net/wp-content/uploads/2017/05/p2_bizd_mm_1905_p2a_mm_1.jpg)
Top management: (from left) SP Setia executive vice-president and CFO Choy Kah Yew, Khor, chairman Tan Sri Dr Wan Mohd Zahid Mohd Noordin and deputy president and COO Datuk Wong Tuck Wai after the briefing.
SHAH ALAM: Property developer S P Setia Bhd expects to complete the acquisition of I&P Sdn Bhd by year-end, stating that the integration would be harmonious.
The group said it was in the midst of completing due diligence work and expects to conclude it within a month, with the acquisition slated for completion by year-end.
S P Setia’s prime land bank will grow significantly in the central part of the Klang Valley and Johor Baru once it acquires I&P.
S P Setia now has about 4,700 acres of land bank in Malaysia, about 500 acres in Vietnam and pockets of development land in Australia, while I&P owns 4,263 acres.
President and chief executive officer Datuk Khor Chap Jen did not deny that there won’t be challenges in the integration, stating that it was part and parcel of any merger exercise.
“It’s normal to have challenges in any merger exercise, but we see the synergy between S P Setia and I&P Group. The merger will be an integration driven by S P Setia,” said Khor on the sidelines of S P Setia AGM.
The developer, Permodalan Nasional Bhd and Amanahraya Trustees Bhd inked a non-binding memorandum of intent to start talks on the proposed acquisition of I&P Group to enable it to fast-track its expansion plan.
The indicative price for the proposed I&P acquisition is estimated to be within the range of RM3.5bil to RM3.75bil.
Meanwhile, Khor said the group expected revenue contribution from international projects to rise by 20% from 8% in 2016, supported by its developments in Australia and the United Kingdom.
“We will see more sales contributions from overseas projects this year. This will be seen once we hand over phase one of the Battersea Project in London in August,” he noted.
S P Setia also has two new property launches in Melbourne in Australia – the Prahran with a gross development value (GDV) of A$38mil and Exhibition Street (A$478mil). “The launches for the two sites are expected in the second half of this year, hopefully by July,” said Khor.
On whether the group expects the property market in the UK to be better in 2017, Khor said things would perhaps be clearer once the UK general election is over.
Sales of the Battersea Power Station project, which contributed 46% of its RM7.8bil unbilled sales (as at end-March 2017), have slowed down considerably in the aftermath of Brexit, analysts reported.
But Khor is confident that since it is an iconic integrated development in a strategic location, it will do well in the long term.
“There won’t be any launches in London for the next two years since part of the land has been handed over to the authorities for tunnelling works for the rail project. This will be handed over to us by the end of 2019 or 2020,” he said.
In the meantime, he said the company was optimistic of hitting its RM4bil sales target this year, adding that it managed to clinch RM801mil in sales in the first four months of financial year 2017 (FY17) from RM696mil during the same period in FY16.
It is targeting RM5.4bil in total GDV launches this year.
Khor also confirmed a report by Australia’s Herald Sun that S P Setia was in the midst of discussing a deal with Hong-Kong based Shangri-La Hotel for a proposed twin-tower development in Melbourne’s central business district fringe.
“We are in discusssions with Shangri-La at the moment and details of the deal will be announced in the near term,” Khor said.
Herald Sun reported that the hotel chain confirmed it would occupy the 64-storey tower, planned for the corner of La Trobe and Exhibition Streets and overlooking Exhibition Gardens. The A$640mil development is said to feature a matching residential apartment tower.
The paper said the deal was done with S P Setia on Monday for Shangri-La to take 500 hotel rooms. S P Setia is said to have bought the site for A$101mil.
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