Amid the Covid-19 pandemic, S P Setia Bhd has seen a change to its top management team, with Datuk Choong Kai Wai taking over as president and CEO and Datuk Seri Koe Peng Kang as deputy president and chief operating officer.
In an email interview, Choong says the group will continue to offer its affordable-range homes in mature townships, with 12 launches being lined up in its existing townships. It will also focus on digital transformation.
The sustainability agenda remains a key priority of the group, building on its reputation as a developer known for projects in that vein.
Next year will mark the group’s foray into the hospitality industry, with the opening of two hotels — The Amari Hotels at Setia SPICE Convention Centre in Penang and KL Eco City in Kuala Lumpur. They are slated for opening in the third quarter of next year and will be operated by ONYX Hospitality Group.
S P Setia has consistently been among the top developers in The Edge Malaysia Top Property Developers Awards over the last five years. This year, it is also the winner of the award for Best in Qualitative Attributes.
City & Country: Please describe S P Setia’s performance in FY2020.
Datuk Choong Kai Wai: Beyond a shadow of a doubt, FY2020 was the most challenging year for S P Setia Group as the Covid-19 pandemic caused disruption in the global economy and had an adverse impact on most industries. The property industry was not spared. Despite the ongoing uncertainties, the resilience of Team Setia has prevailed, with the group surpassing its sales target of RM3.80 billion to achieve commendable sales of RM3.82 billion.
In FY2020, 81% of sales were from local projects, while the rest were from international projects. Sales achieved were mainly from developments such as Setia Alam, Setia AlamImpian, Setia Eco Park, Setia EcoHill and Setia Alamsari in the central region, which amounted to RM2.36 billion, supported by a contribution of RM415 million from Setia Tropika, Setia Business Park II and Setia Eco Cascadia in the southern region, and RM312 million from Setia Sky Vista, Setia Fontaines and Setia V Residence in the northern region.
International projects collectively registered sales of RM716 million, largely through Daintree Residence in Singapore, Eco Lakes in Vietnam and UNO in Melbourne. Notwithstanding the Movement Control Orders imposed in Malaysia and the various stages of lockdown imposed overseas, the strong sales numbers recorded across all our projects demonstrated our overall strength and versatility.
The group registered revenue of RM3.23 billion, and owing to strategic positioning to move our completed inventories, the group resolved to aggressively reprice the completed units at Setia Sky 88 and Setia Sky Vista, which led to renewed demand. Other than that, following the escalating Covid-19 cases that have disrupted the UK’s economy, Battersea Power Station (BPS) also incurred an impairment provision due to its work in progress. The impairments incurred would not have impacted cash flow, and if these provisions were excluded, the group would have achieved a profit before tax (PBT) of RM319.2 million.
As the nation embarked on recovery on the back of a high vaccination rate, S P Setia registered strong sales of RM3.38 billion for the first nine months of FY2021, representing 89% of our full-year sales target. The group remains positive on the market outlook and will continue to focus on achieving our sales target of RM3.8 billion. This improvement was reflected in our revenue of RM2.73 billion and PBT of RM354 million.
Moving on, the group will focus on initiatives to pare down borrowings and strengthen the capital structure, as well as continue to drive digital transformation and champion the sustainability agenda, which will remain the key priorities of the group.
Where does S P Setia want to be with regard to growth and branding?
Over the years, Setia has built a reputation for building sustainable developments, which have not just stood the test of time but have also continued to thrive and evolve with the needs of our communities. Sustainability is embedded in our DNA as a living, dynamic cell that guides our business processes, products, and designs and constructions of ‘live-learn-work-play’ environments. This will continue to be a signature marker for all Setia projects and townships.
On top of that, we have accelerated our digitalisation drive to become a leading digital-first property developer in the country.
S P Setia is venturing into the hospitality sector by opening two hotels soon. What is your five-year plan for this segment?
The Amari Hotels at Setia SPICE Convention Centre in Penang and KL Eco City in Kuala Lumpur, to be operated by the internationally established ONYX Hospitality Group, are slated for opening in the third quarter of next year. The hotels aim to offer complementary services, amenities and facilities to these integrated developments, catering for locals and international visitors. With the economy on a recovery path, we anticipate that there will be increased travel and demand for amenities such as those offered in these two developments.
What is S P Setia’s overall development plan and business focus in the near future?
Keeping an ear to the ground, we will continue to offer affordable-range homes in mature townships, focus on our digitalisation journey and up the game on sustainable developments.
On the cards are 12 launches at our existing townships in the central region, ranging from landed homes in Setia Alam, Precinct Arundina in Setia Eco Park, Setia Safiro, Setia Mayuri, Bayuemas, Bandar Kinrara (two launches), Setia Alamsari, EcoHill and EcoHill 2 to shoplots in AlamImpian and apartments in Temasya Glenmarie.
There will be three launches of landed residences in Setia Eco Gardens, Taman Pelangi Indah and Setia Tropika; three commercial projects in Setia Tropika and Taman Rinting; and a shopoffice development in Bukit Indah. Northern region buyers can look forward to terraced, semidee and bungalow launches in Setia Fontaines.
On the international front, the 40%-owned BPS in the UK had achieved a combined take-up rate of 83% for Phase 2 and 3A as at 3Q2021, with the latter being slated for completion by the middle of next year. This mammoth regeneration project recently witnessed another milestone with the official opening of its on-site underground train station as part of the Northern Line Extension (NLE) in London.
The launch of the NLE marks the first major extension, designated in Zone 1, to the London Underground Network in this century and has become one of the most significant milestones to date in the regeneration of BPS. Opened on Sept 20 this year, this riverside placemaking destination will be one of the most well-connected destinations in the capital.
As the economy reopens, what is your outlook for the property market over the next 12 months?
We are positive of an economic recovery and foresee greater market demand as buyers seek homes that fulfil new-normal lifestyles such as more space, flexible layouts, better security, safer environments and sustainable features.
How does S P Setia remain competitive and set itself apart from its peers?
Setia has garnered a reputation as a trusted and reliable brand backed by four decades of experience and expertise. We intend to continue meeting buyers’ needs by rolling out the best-possible product layouts and designs, innovative offerings and upgraded amenities in the developments.
Setia is also among the early adopters of ESG (environmental, social and governance) standards and to this end, we have already set in place new regulations, best practices, policies and procedures throughout our operations. These have elevated investor confidence — both domestically and internationally — in the Setia brand.
Moving forward in the post-pandemic era, what are your strategies for capturing customers and sustaining your business?
We are leveraging information and communications technology (ICT) solutions to make our customer journey seamless from the first touchpoint via digital platforms like social media, websites and virtual exhibitions. For example, we have developed the Setia On The Go app to introduce our vast range of properties to potential homebuyers. Aspiring Setia property owners can browse for homes via Setia Virtual-X, an online exhibition platform complete with virtual tours and walk-throughs, virtual events and virtual show units.
We will also continue to deploy other digitalisation initiatives on various platforms. We have observed that past initiatives had generated quality leads and successfully converted bookings into sales. We will continue to make use of the digital platforms and create a more robust digital workplace to improve the effectiveness and efficiencies of the daily operation underpinned by cyber resilience.
How is the group ensuring sustainability in the construction, design and built environment?
Sustainability is incorporated right from our blueprints — from building design to the master plan — with a focus on three key areas: energy efficiency, water efficiency and indoor environment quality.
In terms of energy efficiency, some of the systems implemented are:
• Solar photovoltaic panels;
• LED lighting, daylight auto-sensors and motion sensors; and
• Building management systems, especially in our commercial high-rises.
On water efficiency, we harvest rainwater to water the landscape and fit our developments with water-saving sink taps, showers and dual-flush WCs (water closets).
To optimise indoor environment quality, we maximise renewable energy sources such as the sun and wind to provide natural heating, cooling, ventilation and lighting while helping to offset greenhouse gas emissions. We also pay attention to sound insulation, CO monitoring in commercial high-rises, and use low-volatile organic content paint.
Some of our environmental flagship projects that have received due recognition are:
• D’Network Setia Eco Park — the world’s first solar-powered hybrid F&B community hub;
• Setia Corporate HQ — first privately owned office and third building in Malaysia to be certified Green Building Index (GBI) Platinum as well as GreenRE Platinum;
• Setia City Convention Centre — first GBI-certified Convention Centre;
• KL Eco City — Gold Award at the Fiabci World Prix d’Excellence 2020 Awards in the office category;
• Setia Eco Glades, Cyberjaya — achieved GBI certification criteria (eco-friendly paint, rainwater harvesting, LED lighting);
• SPICE Convention Centre in Penang — GBI-certified under Non-Residential, New Construction 2017–2020;
• Setia’s UNO Melbourne high-rise project in Melbourne, Australia, is one of the first high-rise residential developments in that country to go 100% green with its power supply.
In line with our global sustainability agenda, we will continue to pursue these priorities in our developments.