L-R: Victoria minister for environment and climate change Ryan Smith, Foreign Minister Datuk Seri Anifah Aman and S P Setia Bhd president and CEO Tan Sri Liew Kee Sin with the ceremonial shovels at the groundbreaking ceremony for Parque in Mebourne yesterday.
MELBOURNE: S P Setia Bhd, the country’s largest property company in terms of sales, is looking to add more parcels of property in developed economies as it pushes contribution between Malaysia and overseas to 50:50.
Fresh from virtually fully selling its latest project in Melbourne called Parque, president and chief executive officer Tan Sri Liew Kee Sin said the company was looking to buy land in the major cities in Australia such as Sydney, Perth and Brisbane.
“We definitely want to continue investing in Melbourne and London. These two markets are very good markets.
Five years ago, I adopted a policy where 50% of our sales should come from overseas so that if Malaysia slows down, overseas will drive us,” he told reporters after a ground-breaking ceremony for its residential high-rise Parque project here.
“We are going to look at developed economies. In the old days, everybody thought we should go to developing economies where margins are higher and the market is not developed. But risks are higher. We felt we should go to matured economies where we can bring value added.”
Apart from Australia, S P Setia has developments in Singapore, Vietnam and the massive Battersea project in London.
Liew said Vietnam was a market that was not profitable for S P Setia but it was breaking even.
This year, Liew expects international projects to account for 40% of group revenue.
“In the long term, as we start recognising the profits from Melbourne and London and elsewhere, our ratio of profits will be 50:50.”
Parque is S P Setia’s second development in Melbourne after launching Fulton Lane in the same city earlier.
Parque, located on St Kilda Road, is a 332-apartment development. S P Setia has sold 331 units within a few of months after the project was launched.
Liew said it was a blessing that the project was a success given that the property market in Melbourne was softening.
“We sold 40% of the units in Malaysia and 60% in Australia. We are strong in Malaysia but 60% was sold in Melbourne and we were able to attract a lot of local home owners who want to look at this area,” he said.
“It was the first time we did big units here as we built small units in Fulton Lane. These units at Parque are 1,500 to 1,700 sq ft.”
The development of Parque would see S P Setia retain 12 matured elm trees on the site, which Liew said gives character to the project. S P Setia had also replanted 3,000 trees when constructing its Eco Glades project in Cyberjaya.
“In Battersea, we maintained the original brickworks, windows and are doing a development based on that concept and yet it will make money,” said Liew.
Parque was designed by Karl Fender, a renowned architect in Australia. Having top architects design S P Setia’s projects is becoming a theme as it fits into the concept Liew is championing, which is having 5-star consultants to go along with a 5-star service and 5-star quality for its projects.
“Like the Phase 3 of Battersea, where we brought Frank Gehry into it. Frank Gehry’s design is so extraordinary and that project will be sold at a more expensive price than Phase 1,” said Liew.
On the recent measures in Budget 2014 such as the imposition of higher real property gains tax (RPGT) and the abolishment of developer interest bearing scheme, Liew said he expects prices to keep rising as the crux of the issue was demand and supply.
“Property prices will go up. It will not drop. The key point of that in Malaysia is supply and demand. Demand exceeds supply. Malaysia is matured. There are no big parcels of land left in the Klang Valley,” he said.
He said paying a RPGT of 30% was fair as property owners would still make a profit but he felt that rising costs and the future introduction of goods and services tax (GST) would see prices of homes rise.
His contention is that although residential homes are now exempt from a GST, some inputs that go into making a house are not zero-rated and that it is unlikely that developers will absorb such costs.
“The Government must look to bringing the cost down than anything else,” he said.