Sime Darby Property eyes RM2.3bil sales

SUBANG JAYA: Sime Darby Property Bhd is confident it can hit its RM2.3bil sales target for the financial year ending Dec 31, 2019, with the six-month Home Ownership Campaign (HOC) serving as a much needed catalyst in a time when the market is facing a slowdown.

In conjunction with the HOC, which kicked off in January, chief marketing and sales officer Gerard Yuen (pic) said Sime Darby Property has kicked off a campaign where it is launching eight projects in eight weeks.

“We will be offering 1,200 units worth RM817mil within an eight-week period,” he told StarBiz in an interview.

The campaign, called Primetime 8, began in March and will end later this month.

After just four weeks, 519 units worth RM305mil have already been book, said Yuen.

“Over the four-week period, we have launched three new projects and previewed one. Two of the projects that we launched have been fully taken up.”

Meanwhile, 73% of Serenia Adiva, the developer’s third project launched, has been taken up.

“The HOC will serve as an impetus for us to drive our sales,” said Yuen.

Most of the units being offered under Sime Darby Property’s Primetime 8 campaign are located within the Klang Valley.

The developer will be following up its eight-week campaign with another campaign where units from all over the country will be showcased.

Sime Darby Property changed its financial year-end to Dec 31 from June 30 previously.

The group achieved a 7.9% rise in revenue to RM1.27bil for the six-month period until the end of last year mainly due to improved performance of its property development and concession arrangement segments.

Net earnings showed a loss of RM318.7mil as a result of the current period’s impairments, negative contribution from the Battersea project and higher tax provisions.

AmInvestment Bank Research in a recent report said it was maintaining its “hold” recommendation on Sime Darby Property with a lower fair value of RM1.06, based on a 45% discount to revalued net asset value.

“We cut our 2019 and 2020 net profit forecasts by 18.1% and 32.7% respectively to reflect the timing of revenue recognition and imputing lower margins, while introducing our 2021 net profit forecast at RM359.4mil.”

The government has announced a number of initiatives in conjunction with the six-months HOC, such as the exemption of stamp duties residential units priced between RM300,000 and RM1mil.

These are only for properties of developers that are participating in the HOC.

For houses sold above RM1mil to RM2.5mil, stamp duty exemption applies for the first RM1mil, and the rest will be charged at 3%.

Previously, a 1% stamp duty fee was imposed on buyers for the first RM100,000 of the purchase consideration; 2% for RM100,001 to RM500,000 and 3% from RM500,001 to RM1mil.

Stamp duty on loan agreements for properties up to RM2.5mil would be exempted, compared with the previous rate of 0.5%.


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