Source : Business Times - 12 Aug 2008
MALAYSIAN property developer Selangor Dredging Berhad (SDB) is making a foray into Singapore, and the company is not about to be put off by the slowing economic environment.
SDB, which is listed on Bursa Malaysia, has started marketing one high-end residential project on Wilkie Road here and hopes to launch another project by the end of the year.
Managing director Teh Lip Kim admits that times are not good, but she believes that the projects will do reasonably well.
‘Singapore stands to benefit from what is currently viewed as political instability in Malaysia, Vietnam and Thailand,’ Ms Teh said.
SDB was incorporated in 1962 by Ms Teh’s father, Teh Kien Toh. Originally a tin mining company, it began diversifying its business activities in the 1980s.
When the then 31-year- old Ms Teh took over the helm in 1998, Malaysia was in the midst of the Asian financial crisis. She was forced to re-evaluate and to restructure the company’s business activities and dispose of non-performing assets.
This revamp led to the company changing its core business and since 2002, SDB has focused entirely on property. It has launched five residential projects in Malaysia so far, and also owns an office building and a hotel.
The company started marketing its Wilkie Road development, called Jia, about a month ago in both Singapore and Malaysia through private previews. SDB bought the site for between $21 million and $22 million in December 2006.
Some 30 per cent of the 22-unit development has been sold at prices of around $1,600 per square foot (psf) - mostly in Malaysia - SDB said. The project has two and three-bedroom apartments, as well as three penthouses.
Next up is SDB’s 66-unit development on Gilstead Road in Newton. The company bought Gilstead View in a collective sale in May last year for $96.5 million - or $1,070 psf of potential gross floor area - in what was said to be a new benchmark in the Newton area.
The new development on the site will be launched in end-2008 or Q1 2009, Ms Teh said.
SDB also owns a commercial property in Balestier and is on the lookout for more opportunities, she added.
Most Malaysian developers baulk at entering the Singapore property market - mostly citing the off- putting high price of land here - but Ms Teh says that the high land prices are something that anyone who chooses to venture into a developed economy will have to live with in exchange for stability.
‘If you want to go to a place that is more progressive, one has to accept the high prices,’ she said. After all, margins for developers in both Malaysia and Singapore are similar - around 18-20 per cent - Ms Teh said.
Right now, SDB gets all of its revenue from Malaysia. But in five years’ time, Ms Teh hopes that as much as 40-50 per cent of turnover will come from overseas, including Singapore.
Other markets SDB is looking at include Thailand, Vietnam and Australia, but the developer wants to ‘gets things right’ in Singapore first, Ms Teh said.
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