This article first appeared in The Edge Financial Daily on May 17, 2019

KUALA LUMPUR: The completion of Phase 2 and 3 of London’s Battersea power station project, initially scheduled for 2020, has been delayed and is now expected sometime in 2021 instead, according to S P Setia Bhd president and chief executive officer Datuk Khor Chap Jen.

“We expect the project to be delayed [for] one-year plus because of its complexity and Brexit,” Khor told a press conference after the group’s annual general meeting yesterday.

Following the delay, the developer expects some marginal changes in take-up rates. So far, there has been a slight decline in Phase 3’s take-up rate to about 67% from 70% previously, said Khor. Phase 3 is purely residential.

As for Phase 2 — which entails the commercial and retail areas of the project — Khor is optimistic the take-up rate will be maintained at its current level of 90%.

S P Setia and Sime Darby Property Bhd hold a 40% stake each in the power station development. The remaining 20% is held by The Employees Provident Fund.

Meanwhile, the property developer reiterated that it is committed to achieving its sales target of RM5.65 billion for the financial year ending Dec 31, 2019 (FY19) — which represents a 10% growth compared with the RM5.12 billion achieved in FY18 — mainly coming from new property launches and existing completed units despite the “lower-than-expected” sales achieved in the first quarter of FY19 (1QFY19).

It secured sales of RM718 million in 1QFY19, the results of which are announced last Thursday.

“Typically, the first quarter is slow. Having said that, RM718 million is lower than we expected,” Khor said.

“What is encouraging is that in the pipeline, those people who have [placed] their bookings are valued over RM700 million also. If you add that up, it is about RM1.4 billion.

“But these people [who have placed their bookings] are cautious and won’t sign [the sales and purchase agreement] until they get a confirmation that they have got the [housing] loan.

“Going forward, we are still working towards our RM5.65 billion sales target; we will have a clearer picture in the second half [of this year],” Khor added.

S P Setia has said that in order to achieve the sales target, it would launch RM6.8 billion worth of properties in FY19.

The group launched only about RM339 million worth of projects in the first quarter. It expects to launch the remainder from the second quarter onwards, with the bulk of them in the central region, followed by the southern and northern regions.

Meanwhile, Khor said the group’s unsold units remained at a “manageable” level after the group successfully trimmed its unsold stocks to RM1.4 billion from RM1.6 billion previously.

“Our unsold units are less than 30% of our annual sales achieved; it is manageable. We have plans to manage and will continue to take steps to reduce the unsold units,” he said, adding that these units are mainly concentrated in five projects, three of which are located in Johor, and one each in Penang and the central region.

S P Setia shares closed one sen or 0.48% lower at RM2.08, with a market value of RM8.39 billion, after 1.43 million shares changed hands.