Sime Property to sell non-core assets

By FARA AISYAH / Pic By ISMAIL CHE RUS

Sime Darby Property Bhd plans to continue to dispose of its non-core assets in an effort to manage its resources more efficiently.

CFO Datuk Tong Poh Keow (picture) said the company’s most recent sale was of Glengowrie Estate in Selangor in its financial year ended June 30, 2017 (FY17).

“There are certain non-core assets that we are planning to dispose of, including a 300-acre (121.4ha) piece of land in Bukit Selarong, Kedah, and some in Jerai (also in Kedah). There are probably good local developers who would be interested, but for Sime Property, our focus is on managing our resources.

“We also have a small estate in Sabah that we are planning to sell,” she told reporters in Kuala Lumpur (KL) yesterday.

The group is now in the middle of selling hospitality assets like Karri Valley Resort in Australia and serviced apartments in Vietnam, as well as very small pockets of land that are taking a lot of resources to manage, but offer low returns.

She confirmed the company is seeking to sell parcels of land in Pulau Tikus, Penang, and Jalan U-Thant, KL.

This comes as Sime Property’s net profit for the fourth quarter (4Q18) plunged 85.79% year-on-year (YoY) to RM46.57 million due to lower contributions from its property development activities.

Its property development segment reported a profit of RM20.7 million compared to RM274.4 million in 4Q17.

Sime Property also accounted for an RM8.8 million loss from its Battersea project in London compared to a RM53 million profit last year.

However, FY17’s financial results included a one-time gain on disposal of Glengowrie Estate of RM209 million.

Revenue for 4Q18 fell 45.82% YoY to RM617.37 million.

In FY18, the group launched a total of 4,098 units with a combined gross development value (GDV) of RM2.71 billion, mainly in Elmina East, Elmina West and Denai Alam projects located in Shah Alam, Bandar Bukit Raja in Klang and Serenia City in Sepang.

The developer locked in a total sales value of RM2.3 billion, with 78% coming from City of Elmina, Bandar Bukit Raja and Serenia City projects.

Sime Property recently proposed changing its financial year-end to Dec 31, from the current June 30.

The group aims to launch 1,500 units with a combined GDV of RM1.1 billion in the six months to Dec 31, 2018.

“The removal of the Goods and Services Tax has lifted consumer sentiment. However, buyers appear to be taking a wait and see attitude ahead of other major government announcements such as the reintroduction of the Sales and Services Tax and the new national housing policy, which is slated to be unveiled in September,” group MD Datuk Seri Amrin Awaluddin said in a statement.

“We will stick to our focus on launching affordable and medium-range landed properties at townships such as Serenia City, Bandar Bukit Raja, Nilai Impian and the City of Elmina, where demand for these properties is strong.”