The development of the decommissioned power station will continue according to the UK market condition, says Zeti
By SHAHEERA AZNAM SHAH / Pic By ISMAIL CHE RUS
Permodalan Nasional Bhd (PNB) and the Employees Provident Fund’s (EPF) proposed acquisition of the £1.61 billion (RM8.53 billion) assets in Battersea Phase 2 Holding Co Ltd, a unit of the Battersea Project Holding Co Ltd (BPH), is expected to be concluded in the first quarter of 2019 (1Q19).
Sime Darby Property Bhd chairman Tan Sri Dr Zeti Akhtar Aziz said the progress of the deal is very positive.
“We have a high degree of confidence to conclude it by early next year,” she said at the group’s AGM in Kuala Lumpur yesterday.
In 2012, SP Setia Bhd, the EPF and Sime Darby Property had jointly invested in the redevelopment of Battersea, a decommissioned power station in London.
SP Setia and Sime Darby Property each hold a 40% stake in BPH, while the remaining 20% is held by the EPF.
Last year, PNB and the EPF had proposed to jointly buy the second phase of the project.
On Oct 5, SP Setia and Sime Darby Property announced that PNB and EPF have agreed to extend the exclusivity period of the proposed transaction to Dec 31 from the previous deadline of Sept 30.
Zeti said the development of the decommissioned power station will continue according to the market condition in the UK following the country’s exit from the European Union.
“Brexit will be affecting the UK for the near term, but our investment will be for a longer period. There are many phases of the project and we will pace it accordingly to see how we can come out of it positively,” she said.
As for the local front, Zeti said property prices need to be adjusted in the immediate term to manage the imbalance of supply and demand currently faced by the property market.
She said property developers and industry players have to manage the condition while it can still be controlled.
“As the property market softened, which is due to the oversupply and lower demand, property prices will definitely have to be adjusted, but of course according to the types of property.
“We need to manage it wisely and effectively while we can before the market collapses,” she said.
Zeti added that property developers and industry players need to grab the window of opportunity to improve the market condition.
“We still have the window of opportunity to manage it, the market has just softened. It has not collapsed. If we do well, we will come out of it effectively,” she said.
She was responding to Finance Minister Lim Guan Eng’s recent statement that stressed on the 10% reduction in housing price following the exemption of the Sales and Services Tax on construction services and building materials.
Appointed as the group’s chairman in July, Zeti said Sime Darby Property has the capability and resources to ride out the challenging phase of the property market.
“We will work hard moving forward as we are in a sector that is challenging at the moment.
“We have the capability and resources to manage ourselves, so that we can ride out this challenging period and move on into strategic areas in property development where the demand is,” she said.
The group’s net profit rose 2.6% to RM640 million for its financial year ended June 30, 2018 (FY18), from RM624.03 million a year ago.
The marginal increase was attributed to the concession arrangement segment and two sale transactions.
In FY18, its revenue fell 9.9% to RM2.53 billion from RM2.61 billion. The group proposed a final dividend of three sen a share.
Yesterday, Sime Darby Property’s shares rose five sen or 5.98% to 98 sen, with a market capitalisation of RM6.63 billion.