KUALA LUMPUR: Sime Darby Property Bhd (SDP) is targeting sales of RM2.6bil for this year, on the back of launches worth RM2.8bil as it anticipates a recovery year for the market.

       Group managing director Datuk Azmir Merican said the launches will comprise a “strategic product mix” of residential (more than 80%), industrial, commercial and statutory units.

       He said 3,976 units are planned to be launched this year, with RM788.1mil worth of products to be made available by the first quarter.

       “While the first quarter or even first half of this year could still be a bit fragile, with the Omicron variant something to keep an eye on, we’re quite optimistic that 2022 will be a year of recovery.

       “This allows companies like us to line up good products for launches. We also see a demand for homes that should continue to be steady, given the growth in gross domestic product forecast,” Azmir said at a virtual press conference yesterday.

       He added that the absence of any movement restrictions this year would be a boon for the property sector.

       “It’s unlikely we’ll have another lockdown and that’s important as it will lead to supply chain and construction disruptions.”

       For 2021, SDP achieved sales of RM3bil.

       Going into 2022, Azmir said the property market is seeing a lot of cost pressures due to rising raw material prices.

       “I think this is something that all property developers are looking at because it will impact margins.

       “We try not to pass the cost on to consumers and need to come up with alternative ways (to keep margins up), but it’s a space we’re definitely monitoring.”

       Azmir also said SDP’s diversification into industrial properties will strengthen the group’s cashflow this year.

       “We do believe, going forward, that cashflow should remain healthy. The product diversification, moving into industrial, is also going to be key for us.

       “Additionally, our industrial development fund is on track to contribute positively from the second half of 2022, so this really is a transformative year for the group.”

       Separately, group chief financial officer Betty Lau Sui Hing said SDP’s unsold completed property inventories were “manageable.”

       “The inventories are very manageable, to the tune of RM300mil. The key performance indicator for us is that we need to sell off at least 90% of it.

       “Internally, we have set some threshold in terms of completed inventory versus the entire unsold inventory,” she said.

       SDP recorded a net profit of RM72.19mil for its fourth quarter ended Dec 31, 2021, compared with a net loss of RM56.64mil in the previous corresponding period.

       This was driven by strong progress billings during the quarter upon resumption of site progress in the group’s property development segment.