Rise With UEM Sunrise

UEM Sunrise managing director / chief  executive officer Anwar Syahrin Abdul Ajib shared with Property Insight UEM Sunrise’s take on the property market

In spite of the challenging property market in Malaysia, UEM Sunrise remains optimistic and expects transactions to pick up in the second half of the year, driven by affordable prices as well as demand for homes amongst the younger demographic/first-time home buyers.

Although they had noticed a slowdown on take-up rates, particularly for the whole of Iskandar Malaysia, selected types of properties are still recording good sales.

This is particularly evident in the ‘bread and butter’ segment, as there is still strong demand from the local market, especially in the mid-priced landed properties.

“We believe that our best move during the weaker cycle of property transactions is to offer a good mix of quality products that appeal to our customers from all income segments and target markets with an equal balance between landed and high-rise strata units,” said UEM Sunrise managing director / chief  executive officer Anwar Syahrin Abdul Ajib.

“It’s all about customising our product to suit our target audience,” Anwar said.

“Buyers are more cautious in selecting the properties they want to buy. Those who already have a few properties, have a lower margin of financing when seeking house loans, while first-time buyers are looking at properties priced below RM500,000. Banks, on the other hand, are getting stricter when approving housing loans,” commented Anwar.

UEM Sunrise is also not spared by these market conditions. In view of the market in 2014, launches of new projects were deferred.

Sales were mainly derived from existing inventories, the likes of Almãs,   East Ledang and Nusa Idaman in the Southern Region as well as Residensi22 Mont’Kiara, Symphony Hills and Arcoris Mont’Kiara in the Central Region which contributed about 39% of total sales in 2014.

The launch of Aurora Melbourne Central in October 2014, helped cushion the impact of the slow Malaysian market, contributing 60% of UEM Sunrise’s total sales.  

However, the company is quite confident of the property market in 2015.  It plans to launch an estimated RM3.7billion worth of properties, comprising mainly of new properties.

After taking into account the current property market conditions, UEM Sunrise’s launches consist of diversified products ranging from affordable to premium.

About 32% of the properties UEM Sunrise intends to launch this year will be below RM500,000 per unit and a further 14% between RM500,000 to RM1million per unit.

The bulk of the 32% would come from Denai Nusantara, UEM Sunrise’s affordable homes project in Nusajaya, which the company hopes to unveil to the public in the second half of 2015.

In terms of revenue recognition, the bulk of the contribution is still from the southern region, mainly from projects like Teega and East Ledang.

“Our products in the central and international regions are doing very well and we see that as a potential for sustainable earnings within the next few years,” shared Anwar.

In the Central Region, UEM Sunrise expects the bulk of the earnings to come from Residensi22 Mont’Kiara in Kuala Lumpur and Symphony Hills in Cyberjaya.

“Regardless of the market condition at present, we still have a sizeable land bank despite 77% of it being in the southern region. Lands identified for pipeline projects, which we have yet to launch to the market, are close to 7,000 acres with a conservative estimated GDV of RM82billion,” shared Anwar.

UEM Sunrise still has available land parcels in their catalytic projects in Nusajaya, such as the  Puteri Harbour, the Southern Industrial Logistics Cluster (SiLC), and Afiat Healthpark of close to 360 acres, for future development, as well as other undeveloped lands with no immediate development plans.

“We are confident that once the market improves, we will have no issue in launching more new projects into the market, and creating the sustainability in earnings as anticipated,” shared Anwar.

The Ringgit now seems to be at its lowest since 16 years, indicating costlier overseas ventures, which have to some extent played a role in deciding whether UEM Sunrise should continue to pursue overseas developments.

At the moment, Anwar shared that UEM Sunrise’s overseas involvement is only 0.2% of the total land bank the company own.

The company’s presence on the international front is in Quintet, Canada, which will see completion soon, and the recently launched Aurora Melbourne Central, to be followed by the Conservatory, both in Melbourne CBD, Australia.

Located in Mackenzie Street, Conservatory, a high rise mixed residential development is built on 0.5 acres of land and comprises 473 units of apartments. Conservatory commands a GDV of RM602.6million(AUD200.6million) and offers a retail space of 3,000 sq. ft. The development is expected to be launched this year.    

UEM Sunrise had also just announced the acquisition of the 21-storey office tower on 412 St Kilda Road in Melbourne, with the intention of developing an unprecedented ultra-luxurious residential development, potentially with a mix of ground floor retail and serviced apartment components.

“Our presence in Durban sees us owning about 36 acres of land together with the Durban local council. This is currently under planning. In April 2014, we acquired a 4.9 acre land in Alderbridge, Vancouver, Canada which is located approximately 800 meters from our current Quintet development,” said Anwar.

The company plans to develop it into a mixed residential and commercial development as it is strategically located across Landsdowne Station, a Skytrain station, a rapid transit railroad system of the Greater Vancouver. The land also happens to be located very near the Vancouver International Airport.

Plans to explore potential sites in London as well as Australia are still on track. But UEM Sunrise is also being cautious and mindful of the current global sentiment as well by strategising their resources in the short term.

“In Johor, we will continue to launch projects but we will tilt our new launches in 2015 toward landed (terrace homes) and shops where there is still demand for those types of products,” shared Anwar.

Based on data from Valuation and Property Services Department, 59% (23,072 units) of residential properties transacted in Johor were terrace homes in 2014 and UEM Sunrise expect this trend to continue over the near term.

For commercial properties, the most popular type in Johor continues to be 2-2 ½ storey shop (45% of the commercial market share) and 3-3½ storey shop (25% of commercial market share).

UEM Sunrise’s total property development sales for 2014 was RM2.4 billion which was mainly contributed by Aurora Melbourne Central in Melbourne, Residensi22 Mont’Kiara and Symphony Hills in Cyberjaya while the largest contribution in Nusajaya came from Almãs @Puteri Harbour. 

 

The prestigious developer

Public-listed UEM Sunrise Berhad is one of Malaysia’s top and prestigious property developers. This is the flagship company for township and property development businesses of UEM Group Berhad, which is wholly-owned by Khazanah, an investment fund of the Government of Malaysia.

UEM Sunrise is the master developer of Nusajaya, one of the five flagship zones of Iskandar Malaysia, Johor and is currently undertaking the development of the area into a regional city like no other.

Upon completion, Nusajaya will become the largest fully integrated urban development in Southeast Asia that will provide significant investment, financial and business opportunities to the economic growth and development of the region.

The company has core competencies in macro-township, high rise residential, commercial, retail, and integrated developments, as well as property management and project & construction services.

Gerbang Nusajaya, the second phase development of Nusajaya, is a 4,551-acre project, which will feature various catalytic developments including Nusajaya Tech Park, FASTrack Iskandar, Signature Residences, and Gerbang Nusantara.

Gerbang Nusajaya will be developed over a period of 25 years and will include components such as retail parks, campus offices and industrial parks, as well as residential precincts.

In the Central Region of Malaysia, UEM Sunrise is renowned for its Symphony Hills project in Cyberjaya, an exclusive residential development, featuring the country’s first Connected Intelligent Community (CIC), as well as the numerous award-winning
high-rise residential, commercial, and mixed-use developments largely within Kuala Lumpur’s affluent Mont’Kiara enclave in Kuala Lumpur, the Kuala Lumpur City Centre, Bangi, Shah Alam, and Seremban.

Internationally, UEM Sunrise’s presence extends into Vancouver, Canada via Quintet mixed-use development and Aurora Melbourne Central in Melbourne, Australia.

It is also the appointed Project Manager (Marketing) for developer, M+S Pte Ltd (a company owned by Khazanah and Temasek) for its Marina One and DUO mixed-use developments in Singapore. The Company retains a land bank in Durban, South Africa.

UEM Sunrise believes in brand loyalty, where as long as the company offers quality design, infrastructure, and finishes to go along with the excellent lifestyle qualities for their developments, they will be able to generate good take ups for all their property launches.  

“We are targeting a sales target of RM2billion in 2015, and we remain optimistic, given the current challenging market conditions of the property sector as we plan to weather it out by leveraging on the diverse mix of product offerings,” shared Anwar, who also mentioned that UEM Sunrise will ensure their new launches reach specific target groups, and meet their discerning needs and expectations.

Exciting developments ahead

Property investors and potential home owners are seeing a lot of excitement in second quarter of this year with UEM Sunrise new launches, which
includes Residensi Sefina Mont’Kiara and Serene Heights Bangi in Klang Valley, as well as Estuari Gardens in Puteri Harbour, Nusajaya.

“We expect these property projects will contribute to our 2015 sales target, namely Serene  Heights Bangi, and Residensi Sefina Mont’Kiara, from the Central Region, while from the Southern Region,  Estuari, Signature Residences and Denai Nusantara, amongst others. Internationally, we expect to reap good returns from the newly anticipated Conservatory development in Melbourne, Australia,” shared Anwar.

 

Residensi Sefina Mont’ Kiara

Launched in early August this year, Residensi Sefina Mont’Kiara will be built on approximately 3.06 acres of freehold land in Mont’Kiara, commanding a gross development value of RM307million. This is a condominium development consisting of  245 units spreads across 35 stories. Built ups for the units are between 1,333 sq. ft. and 1,771 sq. ft. and is being sold from RM1.06million onwards, the indicative price per sq. ft. is from RM837.

Facilities include wellness garden, gymnasium, reflexology path, hammock garden, pool deck, pavilion, sun deck lounge, BBQ deck, wading pool, playground, Jacuzzi, and reading pavilion. Construction is expected to be completed in 2019 and as of August, the take-up rate is 60%.

 

Serene Heights Bangi

Built on 448 acres of freehold land with a GDV of RM3.2billion, Serene Heights Bangi is expected to be completed in 10 years. This development is set to offer life’s simple pleasures with nature-inspired environment in a modern township. The first phase was previewed on 27 and 28 June, which saw 274 units of double storey terrace homes
opened for sales worth RM181million in GDV.

The first phase featuring Acacia (121 units) and Begonia (153 units) have built-ups between 2,143 sq. ft. and 2,837 sq. ft. During the two-day preview, 121 units of Acacia with a GDV of RM73.4million were snapped up by purchasers, while 30% of Begonia units were taken up. Prices for the units start from RM550,800 to RM1.05million.

Facilities and amenities include a hopscotch valley, takraw park, Gasing land, Congkak place, wellness garden, leisure garden, and Serene Lake park. The first phase is  expected to be completed in June 2018.  

Estuari Gardens

Located in Puteri Harbour, the crown jewel of Nusajaya in Johor, the overall Estuari development will be built on 394.4 acres of freehold land with an overall GDV of RM7billion, and is expected to be completed in approximately seven to ten years.  This is UEM Sunrise first landed-and-gated development here.

Part of the first phase of Estuari called Estuari Gardens comprises 350 units of double-storey super link homes spread across 47.8 acres commands a GDV of RM634 mil.

The built-up area for Estuari Garden’s units is between 2,708 sq. ft. and 3,550 sq. ft. with a price of RM1.39million onwards.

This gated and guarded development offers its community 24-hour security, wide walkways, and cycling paths, large landscaped open areas with a lush verdant linear park, a children’s playground, outdoor gymnasium, and exercise areas.

In August, 83 Estuari Gardens’ Serenity Aralia units were launched. Estuari Gardens is  expected to be completed in July 2017.

Estuari Gardens is set to attract Malaysians who are looking for residential upgrades, and Singaporeans who have businesses in Johor and who would like to purchase houses for weekend homes.

This will also be a development targeted for foreigners who enjoy Asian lifestyles and are enrolled in the Malaysia My Second Home (MM2H) Programme.

In terms of the company’s strategy on developing its landbank in Johor, Anwar opined, “We may form selective joint ventures to develop some of our strategic land bank. We are looking for partners that can enhance our reputation with more word-of mouth advertising, new distribution channels and new markets to enter. It may also be outright land sale for developments with catalytic potential, designed for greater catalytic impact in the immediate surrounding area.”

Anwar also stated that for new developments, “we would like to incorporate smart communities. To transform from silo-based model to a more integrated model incorporating smart energy, buildings, healthcare and citizens.”

The smart community will be run by a central network that connects individual smart buildings such as homes, offices, schools, and hospitals, to a central city management bank. “When these buildings are interlinked, we will be able to manage energy consumption in the houses, work between physical and virtual offices, interact with students and teachers around the world, and even providing healthcare regardless of location,” he stated.

UEM Sunrise has already been collaborating with Telekom Malaysia and Ascendas Group to develop the Nusajaya Tech Park, carefully designed to incorporate environmentally sustainable elements, namely efficient sewage, utility, and energy management that can minimise carbon footprint and reduce operating cost.  

Diversifying to other locations is part of the corporate strategy and UEM Sunrise is in no way withdrawing from Nusajaya as the company is fully committed on their long-term plans for the Flagship Zone B of Iskandar Malaysia.  

As a testament to its commitment, UEM Susnrise in April 2015 unveiled a comprehensive development plan of Gerbang Nusajaya that commands a GDV of RM42 billion. This 4551-acres second phase development of Nusajaya, designed for growth via catalytic developments and strategic partnerships with established developers and multi-national companies.

Gerbang Nusajaya will serve as the commercial and business engine for Nusajaya.  It will draw leisure attractions, trades and industries together with a population attracted by UEM Sunrise’s residential and lifestyle offerings.    

Gerbang Nusajaya is master-planned for connectivity and is easy to reach from Malaysia, Singapore and regional cities.  It is strategically located just five kilometres from the Tuas Checkpoint via the Malaysia-Singapore Second Link.

It is also ready to capitalise on the potential High Speed Rail link between Singapore and Kuala Lumpur.

“We anticipate the upcoming HSR will bring influx of people to the area, leveraging on the improved connectivity. Besides that, it has access to four international seaports namely Tanjung Pelepas, Tanjung Langsat, Pasir Gudang Port and Port of Singapore,” highlighted Anwar.

Gerbang Nusajaya features a number of catalytic developments including the 519 acre Nusajaya Tech Park and the 300-acre FASTrack Iskandar which will be complemented with commercial districts and signature residential precincts.  

With many UEM Sunrise projects coming up in strategic locations,  this will definitely spur the property market in Malaysia, and leave investors spoilt for choice when it comes to investing in real estate.