Property Developers Going Strong despite Brexit Concerns

Diane Foo Eu LynnJune 30, 2016

Brexit Property

In lieu of the Brexit excitement, strong developers such as SP Setia Bhd (SP Setia) as well as Eastern and Oriental Bhd (E&O) who have vested interests in the UK are still positive about their projects despite much apprehension.

SP Setia noted in a filing at Bursa Malaysia that their Battersea project of approximately 1,661 units and three phases is approximately 85% sold – Phase 1 at 99%, Phase 2 at 90% and Phase 3a at approximately 60%.

According to their officials, they say that “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.”

Phase 1 of Battersea is expected to be completed by the end of 2016, and is to be delivered to buyers in staggered numbers. The sales profit from Phase 1 is to be channeled to Phase 2 and Phase 3, which is expected to be completed by the year 2020.

Due to their long term interest in the UK property market, SP Setia say are not concerned about the fluctuation of the pound sterling.

In the meantime, E&O has purchased Prince House, a prime freehold office building along the prestigious road of Kingsway in Central London as they believe that Brexit will not affect its UK properties’ net realisable value.

As said by their officials, they have invested in London even before the spike of property prices in UK, and before the Ringgit dropped to its lower than average rates it is today. Their bank borrowings are conservative with low loan to value ratio, and their property investments are located in prime and very much in demand locations with positive sales prospects.

On a sidenote, E&O is now converting and refurbishing their latest UK purchase of Prince House into a residential and serviced apartment.

Images credit: http://cdn2.spectator.co.uk/files/2016/06/Ross-Clark-410×275.jpg

Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my

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