This article first appeared in The Edge Malaysia Weekly on March 25, 2019 - March 31, 2019

TAN Sri Dr Zeti Akhtar Aziz was aware that when she became the first female chairperson of Sime Darby Property Bhd, she would have her work cut out for her. It was certainly not the best of times, with the sector facing a very challenging period.

In a way, it is ironic for the property industry. Developers and Bank Negara Malaysia — which Zeti led as governor for 16 years — have had a long-running disagreement on whether housing loan rules are too restrictive.

As she sits down with The Edge in an exclusive interview, Zeti reveals that taking the role at Sime Darby Property was not originally part of her plans. “I was asked whether I would chair more than one of these companies. At first, I did not consider taking on any of the other companies,

and finally, I decided to lead Sime Darby Property,” she says.

It is obvious during the conversation that she did not do so just to add another high-profile position to her résumé. She has a clear vision of what she wants to achieve, and this involves tackling three issues head-on.

First, she wants to steer the developer away from conventional products and “to discover the new frontiers of property development”.

“There is a role for property companies, and it should not be [just] to build high-rise condominiums and commercial spaces,” she remarks.

Second, Zeti wants to address the legacy challenges faced by the developer. These obstacles include its unsold properties, some of which are more than a decade old.

“While they may look at me as a regulator, as I said, my two or three years with Danaharta [had] dealt with this [inventory] issue and ways to resolve it, and what strategies are needed while minimising the adverse implications for the organisation,” she adds.

Interestingly, in the six months ended Dec 31, 2018, Sime Darby Property booked a sizeable inventory write-down that amounted to RM210.64 million.

That left some RM2.13 billion worth of old inventory on its balance sheet as at Dec 31.

The developer is changing its financial year end from June 30 to Dec 31.

Between July 1 and Dec 31, 2018, the developer suffered an unaudited net loss of RM318.7 million due to a more than fivefold increase in tax expenses compared to a RM559.77 million net profit in the previous corresponding period.

In the same reporting period, its revenue rose to RM1.27 billion from RM1.18 billion.

The market reaction was immediate. As trading resumed after the financial results and the write-down were announced, the counter fell 14.53% over two trading days to hit RM1 on March 1.

Zeti’s third task is to whip Sime Darby Property into better operational shape. That means driving organisational reforms in the company “to achieve much more with less”.

The simplicity of her goals belies the difficulty of execution, given the sheer scale of Sime Darby Property.

Its developable land bank stood at 20,695 acres as at June 2018, worth RM96 billion in estimated remaining gross development value.

As at last Wednesday, its market capitalisation was RM7.35 billion, the second largest among the pure-play property development counters.

Once these three goals are achieved, Zeti sees no further reason to linger in the role. “I want to achieve these three things that I mentioned. Once they have been achieved, I will hand it over to somebody with expertise in property and just focus on PNB,” she says.  

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