S P Setia sells land. Mah Sing buys land. What does this mean?

S P Setia sells land. Mah Sing buys land. What does this mean?

Who are they?

Both are considered huge developers in Malaysia. One has more landbank than the other but generally (go and check which one even if some of you should know immediately right), both are very well known. I think most property buyers would know their names. Both are always within the typical top 10 developer list here in Malaysia when it comes to total gross development value (GDV). So, why is SP Setia selling their 500-acre plot of land in Semenyih and why is Mah Sing buying up this plot of 500-acre land in Semenyih?

Article in nst.com.my SP Setia says that they are disposing a plot of land because this is part of its strategic plan to improve capital efficiency by monetising its identified land bank. SP Setia president and chief executive officer Datuk Choong Kai Wai said that this move is also aligned to the company’s long-term plan to move towards a lighter asset structure. He said in a statement, “The sale of this land is a good move for us. The sale proceeds will be used for investment into strategic projects developments as well as debt repayment.” Do read the article in full here: Article in nst.com.my

Then… who is buying and why? Article in nst.com.my Mah Sing Group Bhd has acquired 500 acres of freehold land in Semenyih from a S P Setia Berhad subsidiary for an integrated township development, to be known as Glengowrie Estate, with a gross development value of RM3.3 billion. According to Mah Sing, sale and purchase agreements (SPAs) were signed with Petaling Garden Sdn Bhd, a subsidiary of S P Setia Berhad today for RM392.04 million.  Mah Sing founder and group managing director Tan Sri Leong Hoy Kum said this is the company’s most significant land acquisition in recent years and the scale of the project will allow very good master planning. Do read the article in full here: Article in nst.com.my

More developments, more choices lah

When a developer has a huge landbank and they are not able to develop all the landbanks, they could either continue to hold on to them until the time they could start developing them or they could choose to sell it, take the cash and deploy the money into some other more productive investments versus just holding on to the land parcel and waiting for it to appreciate.

Meanwhile another developer which wants to start developing because they have the capacity to do so would need to buy a new parcel of land. Else, they may have to slow down their developments since they have no landbanks to develop or the landbanks they have are not the ones they want to focus currently. Whether the developer is selling or the developer is buying, this just mean that more developments are coming sooner rather than later. So, this means more choices for buyers to choose from yeah. As long as the developer has done sufficient research, they should be able to sell the properties too.

So, if you are looking for a home in Semenyih. This is another development choice yeah. if you like to know more, just google for it yeah. There are no links in this article to buy any property. Cheers.

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