SP Setia on track to become regional property developer
Apr 16, 2011
SP Setia Bhd's acquisition of a strata title development in Leong Bee Court, Singapore for S$65 mil (about RM159 million) will pave the company’s way to become a regional property developer, says research houses.
OSK Research said the development comprising of 27 strata units and a common property on a 0.27 hectare-land has been proposed to be redeveloped into a S$130 mil (RM318 mil) multi-storey residential apartment building.
"Given the freehold status of the land, we believe SP Setia can potentially fetch an average selling price of around S$1,400 per sq ft based on a 25 per cent premium on leasehold property," it said in a research note today.
Meanwhile, AmResearch said assuming an average selling price of S$1,100 per sq ft and a breakeven cost of S$891 per sq ft, the project is expected to yield a development margin of 19 per cent.
Furthermore, given that the project was a maiden venture into the island republic, it gives great opportunity for the group to demonstrate its capabilities in the Singapore market, it said in a research note.
HwangDBS Vickers Research said SP Setia's move to enter the Singapore market would give the Malaysian property developer a good platform to cross-sell its other projects and enhance the company's branding.
