PETALING JAYA: S P Setia Bhd’s latest joint venture may only add about 1% to the group’s total project pipeline but the move is timely as there is a gradual market shift towards higher-value, township-based developments, analysts say.
Earlier this week, S P Setia entered into an agreement with Mitsui Fudosan Co Ltd of Japan to develop a 113-acre residential development in the Setia EcoHill township in Semenyih with an estimated GDV of RM1.3bil.
Mitsui Fudosan is a leading Japanese real estate developer with a global presence.
The development is slated for launch next year and will not contribute to the S P Setia’s launch pipeline and gross development value (GDV) of RM3.1bil for the second half of this year, said Kenanga Research.
The research house views the deal as an indication of stronger-than-anticipated demand within the Semenyih area, prompting the group to accelerate future launches to capture the momentum.
Comprising 683 units of bungalows, semi-detached and cluster homes, it will likely be launched next year.
Meanwhile, MBSB Research remains neutral on the venture.
“The agreement with Mitsui Fudosan will allow the group to have a less capital-intensive route for its future projects,” the research house said, adding that it was maintaining its “buy” call as S P Setia’s long-term prospect would be sustained by residential development while its growing exposure to industrial property also drives earnings growth.
It made no changes to its earnings forecast for this year to 2027 and its target price remains at RM1.26 a share.
Kenanga Research also maintained its “outperform” call for S P Setia with a target price of RM1.43 a share.
