The developer is shifting its strategy by increasing its commercial property portfolio from three per cent now to 20-30 per cent in two to three years.

SP SETIA Bhd, Malaysia's most valuable property developer, plans to build its first retail mall for RM750 million as part of plans to have more commercial assets.

Almost all of the group's income now comes from residential property but it wants to change that strategy.

"We are planning to increase our commercial content from three per cent now to some 20 to 30 per cent in two to three years. We want to move into commercial as the properties will give us higher value," group managing director Tan Sri Liew Kee Sin told reporters at a briefing in Shah Alam yesterday.

The four-level mall will be built within Setia City, the commercial hub of its flagship township, Setia Alam, in Shah Alam, Selangor. It will have almost as much space as the popular Mid Valley Megamall, with a gross floor area of 1.23 million sq ft.

SP Setia's unit, Bandar Setia Alam Sdn Bhd (BSA), will build it with Lend Lease Asian Retail Investment Fund 2 Ltd (ARIF) via an equally owned joint venture firm, Greenhill Resources Sdn Bhd.

ARIF is a real estate fund advised by Lend Lease Investment Management Pte Ltd, which is part of Lend Lease Corp Ltd, an Australian property group.

The mall is the fund's first retail project in Malaysia.

The mall, which may include a hypermarket, is expected to be opened by the end of 2011 as construction starts in the next six months.

At the signing of the joint venture agreement in Kuala Lumpur yesterday, Liew said Greenhill will buy 12.2ha from BSA for RM119.57 million.

There is also a hospital and university campus project in the pipeline at the 63.2ha Setia City, he said.

"We expect profits from the retail mall to flow through after 2011," he added.

Liew did not rule out building more commercial properties with ARIF, adding that it would sell more land to the Australian fund if it wants.

Meanwhile, Liew said SP Setia is on track to meet its RM1.5 billion sales target this year as it has been achieving monthly sales of up to RM120 million from its mature townships.

It has 16 ongoing projects worth RM30 billion.

The firm made a net profit of RM260 million for the 12 months to October 31 last year. Its revenue was RM1.15 billion.

Liew said SP Setia will continue to launch new projects despite weak market sentiments globally. It is also on track to launch its RM2.5 billion EcoLakes project in Vietnam by October.