Property developers' sales cushioned by foreign exposure

Iskandar region encompasses an area of 2,217 square kilometers covering the city of Johor Bahru and the adjoining towns of Pontian, Senai, Pasir Gudang and the construction of a new administrative capital in Nusajaya.
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Property developers' sales cushioned by foreign exposure

Post by amanda_tang » Wed Aug 12, 2015 9:46 am

"SALES of property players with overseas ventures appear to have been less affected by the weak local operating environment, which followed cooling measures undertaken by the government and the central bank two years ago. However, not all foreign markets are the same — numbers from the last financial year show that developers with projects in the UK and Australia are coping better with the domestic slowdown.

S P Setia Bhd ( Financial Dashboard), UEM Sunrise Bhd ( Financial Dashboard) and Eastern & Oriental Bhd appear to have benefited from their overseas exposure in the two developed markets.

One of the first Malaysian property developers to go abroad, S P Setia (fundamental: 1.4; valuation: 1.4) ventured into Vietnam in 2007, and then to Australia, Singapore and the UK. It is now starting to enjoy the fruits of its labours.

During the financial year ended Oct 31, 2014 (FY2014), RM1.8 billion or 40% of S P Setia’s sales came from its international endeavours, a result that the company said has vindicated its decision to go abroad early. In particular, its 40% share in the Battersea Power Station project contributed the most to sales at RM1.2 billion, followed by projects in Melbourne and Singapore.

The developer expects international contribution to account for 40% of its ambitious RM4.6 billion sales target for FY2015. The bulk of it is expected to come from Battersea Phase 3A, which has an estimated gross development value (GDV) of RM1.5 billion.

For the first quarter ended Jan 31, 2015, Battersea contributed RM737 million to the RM1 billion sales achieved by S P Setia during the period. Even then, sales for the quarter were 37% lower year on year — the result of limited launches in Malaysia. Total launches decreased 67% in the three-month period compared with a year ago.

UEM Sunrise (fundamental: 1.5; valuation: 2.6) also benefited from its decision to diversify abroad.

Read more, please click here -> ... n-exposure

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