KUALA LUMPUR: Property developer Sime Darby Property Bhd expects 2019 as a satisfying year despite that the market conditions remain sluggish.
To date, the group launched a total of 2,320 units with a combined gross development value (GDV) of RM1.4 bil. A series of successful marketing campaigns have yielded positive sales of new launches, on-going projects and completed inventories amounting to RM2.3 bil.
“We remain steadfast in our commitment to grow the core business segments and reduce inventories. We remain focused on affordable properties priced below RM500,000 and mid-range products priced between RM500,000 to RM800,000 per unit where demand is still firm,” acting group CEO Datuk Wan Hashimi Albakri Wan Ahmad Amin Jaffri.
The group is also on track to expand into the growing industrial and logistics development market, focusing on build-to-suit and lease assets as well as managed industrial parks in City of Elmina and Bandar Bukit Raja.
Wan Hashimi’s confidence is due to the on-going good performance of Sime Darby Property. It reported a profit of RM481.7 mil for the nine months ended Sept 30, mainly driven by its property development segment and one-off gains.
Revenue for the period under review increased 38.2% to RM2.29 bil compared with RM1.66 bil in the corresponding period last year.
The group recorded one-off gains mainly from the disposal of properties in Singapore amounting to RM208.8 mil, and the disposal of non-strategic land of RM108.1 mil.
The government’s Home Ownership Campaign, which was extended until the end of the year, played a significant role in supporting the industry. For the period under review, Sime Darby Property has registered sales of RM2.3 bil, which is its target for the full year.
As at Sept 30, total unbilled sales stood at RM1.6 bil.
“We have remained focused on delivering products that meet the demands of the market and this has translated into positive results. Despite the soft market, our series of marketing campaigns have been very well received,” said Wan Hashimi.
The property development segment also registered a significant improvement in performance to RM299.9 mil in the nine-month period ended Sept 30 as against RM85 mil in the corresponding period in 2018.
The results included the gain on the Bukit Selarong land sale and compulsory land acquisitions of RM81.1 mil and RM27.0 mil respectively. This was offset mainly by provisions and impairments totalling RM70 mil.
Results of the corresponding period ended Sept 30, 2018, included a gain on land sale of RM3.3 mil, a reversal of write-down of inventories of RM39.6 mil in relation to the group’s project in Gold Coast, Australia, and other provisions totalling RM15.8 mil.
Excluding these one-off items, the segment results have significantly improved mainly due to higher sales and development activities in Denai Alam, City of Elmina, Bandar Bukit Raja, Nilai Utama, Serenia City and Cantara Residences in Ara Damansara.
However, the group’s share of losses from joint ventures and associates increased to RM35.4 mil as against RM29.2 mil in the corresponding period a year ago. This was mainly due to higher marketing expenses incurred by Battersea and lower share of profit from PJ Midtown.