Its group managing director, Azmir Merican, said this would be achieved through planned new launches with gross development value (GDV) of RM2.8 billion.
“The segments that will drive sales are landed residential property, followed by industrial and residential high rises,” Azmir told the media at a virtual briefing following the group’s annual general meeting today.
“Residential landed property, excluding statutory products, had exceptional average take-up rate of 96% in Q1 FY2022, with industrial products completely sold out as at May 8, 2022,” he said.
With regards to rising construction costs, Sime Darby Property has taken steps to mitigate the impact.
“We continue to maintain financial discipline and undertake value engineering with design-to-cost principles in view of rising cost of materials that we expect to persist for the rest of the year compounded with labour shortages, to preserve margins and expedite construction progress,” he said.
He noted that contributions from increasing recurring income were also essential to sustain the business for the long term. “Also essential are land bank management and monetisation,” he added.
Azmir said that among the measures taken to address issues with subcontractors at the operational level was to implement variation of price (VOP) in contracts.
He explained that VOP contracts were introduced to provide assurance to subcontractors.
“If the price exceeds a certain percentage based on the agreement with the subcontractor, we will ensure that the increase is borne by the group,” he added.
Sime Darby Property is also implementing measures to simplify the designs and materials used in its property projects.
“We are looking into alternative materials by minimising the use of materials that cost more and use those that cost less,” Azmir said.
Sime Darby Property foresees a positive outlook for the real estate market for the rest of the financial year, specifically the residential and industrial segments, as restrictions begin to ease in the transition to the endemic phase of Covid-19. This is further supported by the national vaccination rate and reopening of international borders.
On the Battersea Power Station project, Azmir said the group is encouraged by commercial and retail letting as well as residential sales progress at Phases 2 and 3A, in time for the completion and official opening of the power station in September this year.
Currently, over 80% of the project’s retail and commercial space in BPS has been let.