- Over the weekend, we visited Setia Alam's sales gallery where the balloting for 3 & 4-storey shop office units took place. This development is called Setia Taipan and is located at Precinct 15 or the northern side of Setia Alam, located just 1.5km from the recently-completed Setia City Mall. 

- There are 128 units available with lot sizes of 22' x 75' and standard build-ups of 4,128 sf although the bigger units may have build-ups of up to 8,000sf for the 4-storey corner unit. Prices range from RM1.7mil to over RM3mil. 

- These commercial units would serve the new community within the precinct where there will be medium costs apartments mostly. Recall that S P Setia has fully sold over 1,500 of these units a few months back and it will be doing another round of balloting for another 1,500 units of apartments by the end of the year. These units would be priced at RM200k-RM300k for units with sizes just slightly below 1,000sf. Judging by the number of registrants, we believe Setia would see a strong take-up for these units as well. 

- Meanwhile, S P Setia's latest project in Johor, called Setia Sky 88 (GDV: RM450mil), has seen an overwhelming response where units are fully sold (apart from the bumi units) at an average pricing of RM700psf. Some units overlooking the Singapore Straits even fetch prices of over RM1,000psf, a new benchmark for the Johor market. 

- Phase 1 is made up of two towers comprising 588 units with build-ups ranging from 500sf-1,000sf. Phase 2 will be made up of the remaining 284 units. From our ground check, the buyers' profile is dominated by Johoreans working in Singapore and locals who are upgrading, with the remaining being expatriates working in Singapore. The main attraction of this development is the close proximity to the CIQ at the Sultan Iskandar Building and the Johor Causeway.

- All in, despite the weak sentiment, the right products at the right location would see strong demand due to strong urbanisation and an accommodative interest rate environment. We maintain our OVERWEIGHT stance on the property sector because current valuations are depressed with property stocks trading at a steep discount of 40%-50% to NAVs. New sales guidance by developers is very much intact and we believe there will be a return of pent-up demand in properties.

- We expect the market to re-rate established township players such as IJM Land (FV:RM3.80/share) and Mah Sing (FV: RM3.60/share) with  Bandar Rimbayu and Southville City as key developments to drive sales.