Sime Darby to Carve Off its Property Arm

Diane Foo Eu LynnJanuary 27, 2017

 

Sime Darby, a major Malaysia-based multinational conglomerate, plans to carved off its plantation and property divisions and list them as separate entities in the local stock exchange.

These pure play firms will be known as Sime Darby Plantation Bhd and Sime Darby Property Bhd respectively, while its motors, logistics, industrial and healthcare businesses will still be under the parent firm, which will remain listed in Bursa Malaysia.

“This initiative will enable each business to pursue its distinct aspirations with greater focus and agility, taking advantage of potential growth opportunities to maximise value for all shareholders,” said the company in a statement.

According to Sime Darby’s President and Group CEO Tan Sri Mohd Bakke Salleh, each company will carry the parent’s brand name, and the conglomerate’s stockholders would benefit from the growth potential of these separate entities. However, this move still require the approval of the board.

Moreover, a report from Reuters revealed that Sime Darby’s plantation and property divisions generated almost 70 percent of its RM2.4 billion earnings during the 2016 financial year.

The latter is estimated to be valued at RM11.6 billion, while the plantation business has a greater market capitalization of approximately RM50.9 billion, data from UOB Kay Hian shows.

Following Sime Darby’s successful initial public offering (IPO) in November 2007, it made headlines for becoming the biggest property developer in Malaysia and the largest palm oil maker in the world.

Meanwhile, Sime Darby Property Bhd is currently constructing a new low-cost residential project valued at RM155 million in the City of Elmina, Shah Alam.

Known as Harmoni 1, it will be the first housing development in the country to leverage on the Divergent Dwelling Design (D3) concept, said Managing director Datuk Jauhari Hamidi.

With the use of pre-fabricated and mass-produced building materials, D3 is expected to speed up the construction time of houses to just 24 months, versus 36 to 42 months if the traditional method was utilised.

It is the result of long and dedicated research by G and A Architects, as well as the Construction Research Institute of Malaysia (Cream), in partnership with Sime Darby Property, explained Jauhari, adding that the houses at Harmoni 1 will cost from RM200,000 to RM250,000, with built-up areas measuring between 900 and 1,000 sq ft.

“We are confident that this project will get good response from buyers, based on the price range, quality and standard of the houses,” he added.

 

Image sourced from GNN Liberia

 

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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