S P Setia confident of meeting FY25 sales target

PETALING JAYA: S P Setia Bhd is on track to achieve its sales target for financial year 2025 (FY25), thanks to its industrial parks and township projects.

Maybank Investment Bank Research (Maybank IB) said despite external uncertainties, the property developer remains confident of meeting its FY25 sales target of RM4.8bil.

Industrial parks are expected to drive the next leg of earnings alongside stable township contributions, it added.

In a recent meeting with the company’s management, the research house, among others, said industrial parks would be the new earnings driver for S P Setia in addition to its bread-and-butter township projects.

There are three industrial parks in Selangor, Johor and Penang.

Setia Alaman Industrial Park in Klang would start contributing to earnings from FY25 onwards.

Year-to-date, the project has secured RM655mil worth of land sales since 2023.

To raise the project’s profile, S P Setia intends to form a joint venture (JV) with a foreign partner to develop a portion of the land, with the deal expected by the second half of the year.

“We are positive on Setia Fontaines Industrial Park in Bertam.

“With the Penang Development Corp as the JV partner, we expect the approval process to be expedited.

“Additionally, the backing of the state government should boost investor confidence, in our view,” Maybank IB said.

SP Setia is also in discussions with two potential JV partners (one local and one foreign) for its 307-acre Tanjung Kupang Industrial Park (TKIP) in Iskandar Malaysia.

TKIP has strong potential as a logistics hub given its proximity to the Port of Tanjung Pelepas, Forest City and Singapore.

Internationally, the company continues to expand with strong momentum.

In Australia, Atlas Melbourne (La Trobe St) has locked in 50% sales, with 20 units sold monthly.

“While there are no details on the launch timeline for its Carlton project in Melbourne (across from Melbourne University), we understand that two towers have been earmarked for build-to-sell, while the other tower will be build-to-rent (for student accommodation purposes),” it noted.

Management does not expect significant losses from its 40%-owned Battersea Power Station project in the UK, as the development has achieved 99% retail leasing, a 71% take-up rate for the Koa apartments and 46% office occupancy for Phase 3B.

Phase 3C (senior living) is under negotiation with a potential buyer while discussions for Phase 4, which could be a JV with an international developer, are ongoing.

S P Setia’s plan to list its investment properties remains intact, with the listing expected to take place in early 2026.

Maybank IB is maintaining its “buy” rating on S P Setia and keeping its earnings forecasts unchanged, while lowering its target price to RM1.45 per share.