KUCHING: Property developers such as SP Setia Bhd (SP Setia) as well as Eastern and Oriental Bhd (E&O) are positive on the long-term prospects of their property projects in UK despite the Brexit event.
In a filing on Bursa Malaysia, SP Setia noted that as to date, it has sold approximately 85 per cent of the 1,661 units launched for Battersea in three phases. This comprises of Phase 1 at 99 per cent, Phase 2 at 90 per cent, and Phase 3a at approximately 60 per cent.
“Amidst the short term uncertainty in the aftermath of Brexit, we are still positive on the long term prospects of Battersea and remain committed to the development of the entire project, which is expected to be fully developed by 2025,” it said.
It noted that Phase 1 is scheduled to be completed and delivered on a staggered basis starting the fourth quarter of 2016 (4Q16) to 2Q17 and therefore, it expect to recognise part of the profit from Phase 1, this year.
It also said that it will reinvest its profit in the development of Phase 2 and 3, which are expected to be completed in 2020.
“As such, the fluctuation in pound sterling would be confined to accounting effect as profit will remain invested in the project for the long term,” it commented.
Meanwhile, E&O, which acquired a prime freehold office property, Princes House along Kingsway, central London, believed that the Brexit would not have any negative impact on the total net reliasable value of its properties in UK.
“We had invested into London early on before property prices rose sharply there and the ringgit to sterling pound average exchange rate was lower than today.
“Our bank borrowings are conservative with a low loan to value ratio.
“Our properties are located in prime locations that remain very much in demand with positive sales prospects,” it said.
To note, E&O is converting and refurbishing the Princes House building into a residential and serviced appartments.