Zeti: Property prices will adjust to market dynamics
> When there is excess supply, and demand softens, adjustment will occur
PETALING JAYA: Newly appointed Sime Darby Property Bhd chairman Tan Sri Zeti Akhtar Aziz said while the property market is softening, property prices will adjust to market dynamics.
“Usually it is based on supply and demand, when there is excess supply and demand softens, prices have to adjust,” she said when asked of Finance Minister Lim Guan Eng’s statement that house prices could be reduced by 5% to 10% with the exemption of sales and service tax (SST) on construction services and building materials.
However, she said the degree of price adjustment is dependent on the property types.
She added that there is sufficient time to “manage” the property market as it has just softened and not collapsed.
For Sime Darby Property, Zeti believes the group will have the capability and resources to manage itself amid the challenging backdrop.
Meanwhile, she said the group is hoping to conclude the London Battersea Power Station (BPS) Phase 2 deal by the first quarter of 2019 and its progress has been positive.
Early this month, SP Setia Bhd and Sime Darby Property announced that Battersea Phase 2 Holding Co, Permodalan Nasional Bhd (PNB) and Employees Provident Fund (EPF) had mutually agreed to extend the exclusivity period in the proposed transaction until the end of the year from Sept 30.
PNB and EPF had proposed to acquire the commercial assets worth about £1.61 billion (RM8.58 billion) in Battersea Phase 2 Holding Co, a unit of Battersea Project Holding Co Ltd which is the vehicle undertaking the BPS project in London.
SP Setia and Sime Darby Property hold 40% stake each in Battersea Project Holding Co Ltd, while EPF holds the remaining 20%.
On the impact of Brexit on the project, Zeti said while the UK’s exit from the European Union is definitely going to affect the country in the immediate term, Sime Darby Property’s investments are long term and medium term.
She said given the many phases of the project, the group will pace it accordingly to “come out of it positively”.
On the upcoming Budget 2019, Zeti, who is also the member of the Council of the Eminent Person, said the council had put forward some recommendations to the government, but is yet to know which of these were carried.
As the first budget by the Pakatan Harapan government, it will serve as an opportunity for Malaysia to demonstrate its direction forward through the period of transition in stabilising conditions and providing a platform to regain growth momentum.