KUALA LUMPUR: Sime Darby Property Bhd (SD Property) anticipates minimal impact from the implementation of targeted fuel subsidies, according to its group managing director Datuk Azmir Merican.
He said the company currently foresees a limited impact from this implementation on the company's development operations and consequently on increasing sales prices.
"Our contractors do not buy at the pump, so rationalisation there won't impact our subcontractors. However, we are still awaiting further details to fully understand the potential impact on the property sector," he said at Sime Darby Property's virtual media briefing here, today.
On May 22, Prime Minister Datuk Seri Anwar Ibrahim said the Cabinet had agreed to implement targeted fuel subsidies starting with diesel, which is projected to save the country RM4 billion annually.
Anwar said the targeted fuel subsidies would apply only to users in the peninsula.
Those who would not benefit from it, he said, were the people in the Top 20 income group and foreigners.
Meanwhile, commenting on the escalating price of building materials, Azmir believes the product mix is crucial in maintaining the company's margins, despite rising costs.
"For 2024, our product mix is one-third industrial, one-third landed, and one-third high-rise. We feel this is a very optimal product mix to defend margins and meet the demand in our townships.
"Some products will be experimented with to understand market preferences, but overall, we are also launching more high-rise projects in mature townships and remain confident in our landed properties.
"While we do foresee some pressure on margins in 2024, particularly due to fuel subsidies, we have managed to sustain our margins thus far," he said.
On prospects, Azmir said Sime Darby Property anticipates a favourable outlook in the financial year 2024 (FY24), driven by the robust industrial segment and the general improvement in the residential market.
He said the company is poised for further growth with the launch of two landmark projects, the highly anticipated signature residences, The Ophera at KLGCC Resort, and the Elmina Lakeside Mall.
"These developments reflect our proactive approach to meeting market demands and enriching the lives of our customers," he added.
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