KUALA LUMPUR (Aug 27): Sime Darby Property Bhd is targeting to achieve RM1.4 billion sales for its financial year ending Dec 31, 2020 (FY20) and said it will be “more aggressive” in the remainder of the year after being significantly impacted by the enforcement of the movement control order (MCO) in the former half of the year.
For the first half of FY20, the group recorded RM712.5 million in sales, down 49.1% from RM1.4 billion recorded for the same period in the previous year. In FY19, the developer managed to exceed its sales target of RM3.1 billion.
Sime Darby Property group managing director Datuk Azmir Merican said the group will be launching another RM1 billion gross development value (GDV) worth of projects in the second half of the year, comprising 601 units valued at RM509.8 million in the third quarter and another 1,150 units in the fourth quarter.
“We will be launching just over RM500 million in GDV for each of the two quarters and these will mainly be landed residential products within the right price range in our flagship township developments,” he said during a press conference on the group’s 2QFY20 performance.
These comprise units across its Elmina West, Bandar Bukit Raja, Serenia City, Bandar Ainsdale, Putra Heights and Elmina East developments.
Giving a breakdown of the type of units to be launched, Azmir said about 75% are landed residential units, while the remainder comprise statutory (12%), industrial (9.7%) and commercial (2.9%) units.
The property developer will be banking on the lower interest rates, the reintroduction of the Home Ownership Campaign 2020 (HOC) as well as the Prihatin and Penjana stimulus packages to support sales in the latter half of the year.
Azmir said the residential market should see a gradual recovery, provided that conditions remain stable, supported by fiscal and monetary stimulus. The retail sector is also expected to slowly recover following the easing of restrictions under the current Recovery MCO.
Meanwhile, the industrial sector is expected to continue to be a “beacon” for the local property segment, as the group sees transactional activities, which were delayed during the MCO, to pick up in the second half of the year.
Tax incentives for foreign manufacturers under the National Economic Recovery Plan will also help make Malaysia more attractive as an investment destination.
“We were significantly impacted by the MCO in the second quarter. It is an unprecedented global event. While we are optimistic for the second half of the year, we recognise that recovery may take a bit of time,” Azmir said.
Looking towards 2021, he indicated that Sime Darby Property will be looking at diversifying its development income streams, with the group looking towards industrial and logistics developments as a new engine of growth.
He pointed out that this segment achieved RM87.9 million in overall sales during the first half of the financial year.
The group also intends to enhance complementary business segments, which include the opening of its KL East Mall slated for Nov 25, 2020, as well as promoting TPC KL as a lifestyle destination beyond golfing.
At 12.30pm, Sime Darby Property rose 0.5 sen or 78% to 65 sen, giving it a market capitalisation of RM4.42 billion.
Edited by Lam Jian Wyn