- Over the weekend, we visited Setia Alam’s sales gallery
where the balloting for 3 & 4-storey shop office units took place. This
development is called Setia Taipan and is located at Precinct 15 or the
northern side of Setia Alam, located just 1.5km from the recently-completed
Setia City Mall.
- There are 128 units available with lot sizes of 22’ x 75’
and standard build-ups of 4,128 sf although the bigger units may have build-ups
of up to 8,000sf for the 4-storey corner unit. Prices range from RM1.7mil to
over RM3mil.
- These commercial units would serve the new community
within the precinct where there will be medium costs apartments mostly. Recall
that S P Setia has fully sold over 1,500 of these units a few months back and
it will be doing another round of balloting for another 1,500 units of
apartments by the end of the year. These units would be priced at RM200k-RM300k
for units with sizes just slightly below 1,000sf. Judging by the number of
registrants, we believe Setia would see a strong take-up for these units as
well.
- Meanwhile, S P Setia’s latest project in Johor, called
Setia Sky 88 (GDV: RM450mil), has seen an overwhelming response where units are
fully sold (apart from the bumi units) at an average pricing of RM700psf. Some
units overlooking the Singapore Straits even fetch prices of over RM1,000psf, a
new benchmark for the Johor market.
- Phase 1 is made up of two towers comprising 588 units with
build-ups ranging from 500sf-1,000sf. Phase 2 will be made up of the remaining
284 units. From our ground check, the buyers’ profile is dominated by Johoreans
working in Singapore and locals who are upgrading, with the remaining being
expatriates working in Singapore. The main attraction of this development is
the close proximity to the CIQ at the Sultan Iskandar Building and the Johor
Causeway.
- All in, despite the weak sentiment, the right products at
the right location would see strong demand due to strong urbanisation and an
accommodative interest rate environment. We maintain our OVERWEIGHT stance on
the property sector because current valuations are depressed with property
stocks trading at a steep discount of 40%-50% to NAVs. New sales guidance by
developers is very much intact and we believe there will be a return of pent-up
demand in properties.
- We expect the market to re-rate established township
players such as IJM Land (FV:RM3.80/share) and Mah Sing (FV: RM3.60/share)
with Bandar Rimbayu and Southville City
as key developments to drive sales.
Source: AmeSecurities
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