SP Setia keen to have more projects in Singapore

An aerial view of Eco Sanctuary, a condominium project by S P Setia in Singapore

DESPITE being relatively new in Singapore’s property sector, SP Setia Bhd will continue to look for more opportunities in the city state, acting deputy president/COO Datuk Wong Tuck Wai says.

This may be in the form of joint ventures with Singapore developers or it could be participating in land tenders, says Wong.

He was speaking to reporters after a topping out ceremony at the company’s second condominium project Eco Sanctuary in the suburban area of district 23, Chestnut Avenue, off Upper Bukit Timah Road and next to the Zheng Hua Park in Singapore last week.

The company’s first project is 18 Woodsville which is closer to the city in District 13 near the Potong Pasir MRT station. Both were launched in 2012.

SP Setia, one of Malaysia’s largest property developers, also has projects in Australia and Britain.

Says Wong: “It makes sense to have our business here. We have to have continuity but the market is challenging today because of take-up rate and price point,” he adds. It has sold S$420mil of its total gross development value of S$465mil at Eco Sanctuary.

Cooling measures, among the most draconian, were imposed last year, making private property development highly competitive in the city state, especially when the measures are beginning to bite. There have been eight rounds of measures since 2009.

The last two involve a 15% additional buyers stamp duty for foreigners on top of the normal 3%, and the total debt service ratio, which limits one’s borrowings. These two blips affected developers and buyers last year.

Wong says SP Setia is not deterred by the challenges. “Anywhere we go, we have to localise. We will certainly look for opportunities but everything must be numbers driven, guided by margins. Singapore is important venture for us. It is no longer an adventure but a business proposition.”

Unlike 18 Woodsville which is closer to the city, Eco Sanctuary is considered a suburban development. Its attractiveness is the nature reserve next to it. Those who bought into it would need a car. Although there is the Pending LRT station in Bukit Panjang and a still-under-construction MRT station, both are quite a distance away considering the tropical climate. This explains why SP Setia will be offering free shuttle service to the two LRT/MRT stations and the Bukit Panjang mall for the first two years.

There are two projects by Singaporean developers directly opposite Eco Sanctuary, namely Tree House by City Developments Ltd and Foresque Residences by Wing Tai group. All three are private housing. Tree House was launched in 2010 at between S$800 and S$900 per sq ft (psf) and was sold out within weeks. Foresque Residences, launched at about S$1,300 psf had a bit of challenge.

Unlike the Malaysian property scene, about 80% of Singapore’s more than 5 million population live in Housing Development Board (HDB) apartments. Its executive condominiums are currently priced at S$750-S$800 psf. Singaporeans can opt for private housing but price is a powerful sieve among upgraders.