SP Setia buys Melbourne land for RM90m

Tuesday, March 30, 2010


SP Setia buys Melbourne land for RM90m


Its wholly-owned unit, Setia International, plans to develop a high-density inner city integrated residential and commercial project on the land

SP Setia Bhd, the country's biggest property developer in terms of sales, has bought a piece of land in Melbourne, Australia, for A$30 million (RM90 million).

Its wholly-owned subsidiary, Setia International Ltd, signed a deal yesterday to buy the 4,340 sq m land, held under several certificates of titles, from S.L. Nominees Pty Ltd and Jonquil Pty Ltd.

It plans to develop a high-density inner city integrated residential and commercial project on the land.

The deal was brokered by Savills Australia following a tender process.
According to Savills, there was strong interest from local and offshore buyers, but SP Setia offered the best combination of terms and corporate strength which the sellers were looking for.

The group plans to finance the purchase with internally generated funds and external borrowings.

"Barring unforeseen circumstances and subject to Australia's Foreign Investment Review Board approval, the proposed acquisition is expected to be completed in the financial year ending October 31 2010," SP Setia said in a filing to Bursa Malaysia yesterday.

The group targets to launch the project within 18 to 24 months of the date of acquisition.

"The land is strategically located in the central spine of Melbourne's central business district, between A'Beckett Street and Franklin Street and between Elizabeth and Queen Streets.

"The site is a short walk to Melbourne's central shopping centre and railway station, and is close to the Queen Victoria Market."

SP Setia said the close proximity of the site to several premier Australian universities and colleges will enable the group to monetise its Malaysian customer base, many of whom have sent their children to further their education in Melbourne and have invested, or are looking to invest, in properties there.

Based on the 2006 census published by the Australian Bureau of Statistics, it is estimated that 29,174 Malaysian-born individuals now live in Melbourne.

SP Setia declined to reveal the expected gross development value or profits, saying only that the project "will offer a development potential which is at least equal to that of a similar project in Kuala Lumpur".

"Along with international expansion, the group will also continue to focus on acquiring new landbank in Malaysia for growth and reinvestment, given the many opportunities which still exist at home," its president and chief executive officer Tan Sri Liew Kee Sin said in a statement.

By Business Times