Update S P Setia buys fifth Australian plot for RM1.9b mixed development

by **Cals** Sat 30 Apr 2016, 03:04

Update

[size=28]S P Setia buys fifth Australian plot for RM1.9b mixed development

By Meena Lakshana / theedgemarkets.com | April 29, 2016 : 10:34 PM MYT

KUALA LUMPUR (April 29): S P Setia Bhd is purchasing its fifth land in Melbourne, Australia, for A$101 million (RM300.78 million), for a mixed development worth A$640 million (RM1.905 billion).

The planned purchase came on the heels of another land deal that the group sealed for the purchase of a 850-sq-m site in Prahran, Melbourne, for A$10 million, just two weeks earlier.

In a bourse filing today, S P Setia said its unit Setia (Melbourne) Development Company Pty Ltd has entered into a conditional sale contract with Australian telecommunications player Telstra Corporation Ltd to acquire the 1.02 acres of land in the Melbourne Central Business District (CBD).

The condition precedent to the acquisition is the delivery of a guarantee and indemnity executed by S P Setia to Telstra by May 20, 2016, or such later date as the parties may agree to in writing.

The purchase of the land, located opposite the Carlton Gardens, will be satisfied by cash and bank borrowings.

S P Setia’s draft plan is to develop the land into two residential towers, comprising up to 800 residential units with a retail podium space on the land, estimating gross development value of A$640 million.

The property developer plans to launch the project in the second half of 2017. As such, it expects to complete the acquisition by the second quarter of 2017.

The company said its proposed mixed development project, in addition to the condominium development in Fulton Lane, Parque Melbourne on St. Kilda Road and the recent acquisition of tracts of land in Carnegie and Prahran, will allow S P Setia to strengthen its presence in the Australian property market.

In a statement, S P Setia president and chief executive officer Datuk Khor Chap Jen said the acquisition reinforces S P Setia’s significant presence as a prominent property developer in Australia.

“This is the largest east-end CBD development site (in Melbourne) to be sold in over a decade,” he said.

“Once transformed by Setia, we are confident that it will be the epicentre of Melbourne CBD’s cultural, commercial, education and city garden hubs,” he added.

He said the development will boast a combination of multi-level retail, prime A-grade office space and luxurious apartment towers, and will set a new precedent for premiere developments across Melbourne and revolutionise its urban landscapes.

On April 14, S P Setia announced it has acquired the Prahan land and intends to develop it into a high-end residential project, with a GDV of A$38 million.

The group has a permit approved for an eight-storey building with 47 apartments and an office, and retail outlets on the ground floor.

In November last year, SP Setia bought a parcel of land in Melbourne for A$6.68 million, to be developed into a 48-unit four-level apartment complex with a GDV of A$34 million.

SP Setia made its maiden foray in the Australian property market in 2009, with the purchase of a 0.2-hectare (ha) Fulton Lane site for A$30 million, and constructed 778 luxury apartments on the site with a GDV of A$470 million.

The developer later purchased a 0.9ha site at Parque and is in the midst of constructing 332 units, with a GDV of A$247 million.

Both the Fulton Lane and Parque projects have been fully sold.

S P Setia shares closed 3 sen or 0.92% lower at RM3.22 today, for a market capitalisation of RM8.44 billion.
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