BY Roznah Abdul Jabbar
The slow market is prompting many developers to seek out innovative marketing schemes to improve sales, but leading developer SP Setia Bhd seems to have found the Midas touch in the employment of the 10:90 method of housing delivery.
The group’s executive vice president Tan Hon Lim explained that the “Setia 10:90” package is actually a build-then-sell package where apart from the first 10 per cent being billed at the point of signing sales and purchase agreement, there is no other progressive billings until the completion of property.
“The remaining 90 per cent of purchase price is invoiced upon delivery of vacant possession supported by the certificate of completion and compliance,” he said.
On who is eligible to participate, Tan said that there are no special requirements or qualification to be entitled to this package.
“The purchasers needs to be an eligible purchaser with the ability to pay the 10 per cent down-payment,” he added.
Tan said in this soft market, where bank loan applications are more stringent, the package is attractive as it helps to free up financial burden for purchasers.
SP Setia has made the scheme an integral part of the sales initiative for financial year 2016, with approximately 13 phases from various projects, with a gross development value of RM3 billion, being rolled out under the Setia 10:90 banner.
Among the participating major launches in 2016 are Setia EcoHill 2 at Semenyih with gross development value (GDV) of RM512 million; Carnegie at Melbourne, Australia with GDV of AUD31 million; KL Eco City at Bangsar with GDV of RM444 million; Setia Sky Ville at Penang with GDV of RM477 million; Setia Sky Seputeh (Tower A) at Taman Seputeh with GDV of RM406 million; Setia Trio at Klang with GDV of RM351 million; and Setia Business Park II at Johor with GDV of RM127 million, to name a few.
The strategy has already tasted success in the form of overwhelming response to its Setia Eco Templer project, a gated and guarded development taking shape in the Templer Park vicinity of Rawang and about 20km from KL city.
About 90 per cent of its units from the first phase of the project were snapped up during the launch period earlier this month and deputy general manager of Setia Eco Templer, Dianne Chan, attributes the quick take-up rate to the 10:90 strategy.
“If, for whatever reason, a buyer wants to exit from the purchase, he loses 10 per cent but the likelihood of buyers opting for an exit is minimal. In three years, the prices of these properties would have moved up,” said Chan.
The 10:90 scheme will also be applied to the maiden phase of Setia EcoHill 2, which will be launching 258 units of double-storey terrace houses and 96 units of linked semi-detached homes in June.
Located next to its Setia EcoHill township in Semenyih, this 1,010-acre township comprises residential and commercial properties.
According to SP Setia, 51 per cent of the land space is dedicated to landscaping and infrastructure while 38 per cent are earmarked for residential and the remaining 11 per cent for commercial properties.
Phase one of Setia Eco Hill 2’s launch will feature double storey linked terraces with land size of 20ft by 65ft, 20ft by 70ft and 22ft by 70ft as well as 32ft by 60ft linked semi-detached homes priced from RM553,000 to RM668,000.
Construction of the first phase is targeted to commence in July 2016 and be completed in mid-2018.
In keeping with its sustainability agenda, SP Setia embarked on constructing the LEKAS-EcoHill Link, which directly links the LEKAS Highway to Setia EcoHill, thus alleviating the congestion along Jalan Semenyih. The construction for the 3km dual carriageway link road started this April.
The show village located at the site is currently open for viewing.