SDP saw encouraging response to Elmina Valley (Phase 4), which was fully sold by June
SDP plans to launch more affordable to mid-range products in FY2018
There is a buzz of excitement among the staff members of Sime Darby Property as their newly appointed managing director, Datuk Seri Amrin Awaluddin, steps into the spacious Elmina Pavilion sales gallery of the City of Elmina township in Shah Alam that pleasant Tuesday afternoon.
“I have not done [an interview like this] since my time at TV3, which was many years ago (around 2009/2010),” Amrin tells City & Country in his first face-to-face interview since assuming his new post at SDP in September this year.
After settling into his seat, Amrin, who appears firm yet affable, begins by reflecting on his first experience with SDP. “My first-ever property purchase was in fact in a residential development in Subang Jaya by Sime UEP in 1996. It was a good investment and I got good returns. During the time, Sime UEP was well known for its value-for-money developments, a quality that has always been part of the brand’s image and DNA.
“Today, [in this saturated market] of developers, we would like to bring back [this level of enthusiasm and recognition] among our stakeholders to continue to differentiate ourselves and to be outstanding in terms of our products and services. Ultimately, my vision is for SDP to be the most preferred and respected developer in the market.”
It becomes evident in the interview that Amrin highly values teamwork, his staff and positivity. “There is an African proverb that says, ‘If you want to go fast, go alone, if you want go far, go together’. I firmly believe it is important to have a positive work environment, to have the right set of people and a strong team,” he opines. “Our listing is just around the corner, after which we will have greater focus and agility as an independent entity, and we will work closer together as a team.”
On Jan 26 this year, SDP announced that its board would proceed with a plan to pursue a pure-play strategy involving its listed entities in the plantation, property, trading and logistics sectors with the objective of unlocking their value. The group will distribute its entire shareholding in Sime Darby Plantation Sdn Bhd and SDP to entitled shareholders upon the restructuring.
On July 28, it was announced that Amrin would spearhead the property division of Sime Darby Bhd and that SDP will be going for listing on Nov 30.
Upon listing, SDP will be the largest landowner among local developers. “As at November, we own more than 20,763 acres of developable land mainly located in the Klang Valley, Negeri Sembilan and Johor. We need about 10 years to develop this land bank, so we have a lot on our plate,” says Amrin.
“Of the 20,763 acres, 12,026 acres are located within our 23 active townships, integrated and niche developments. The remaining 8,737 acres are for future developments.
“About 1,880 acres of our total land bank are located in the Malaysia Vision Valley following the completion of a sale and purchase agreement with Sime Darby Plantation. As at November, this land has a total gross development value of RM100.4 billion,” he adds.
Amrin is confident of maintaining SDP’s mission upon its listing. He says, “Our goal at SDP has always been to be the No 1 developer in Malaysia, especially in terms of asset size, revenue, land bank, developments and quality. We hope to achieve this in the next three to five years.”
Media experience a help
Coming on board SDP appears to be a natural progression for Amrin. “Joining SDP is part of my journey; I want to do something new, meet new people, work with a new team and acquire new experiences as well as challenges,” he remarks.
Before being hired by SDP, Amrin was the group managing director of Media Prima Bhd since 2009 and was with the media group for 17 years. He had entered Media Prima as the chief financial officer of Sistem Televisyen Bhd (TV3) in 2001.
Amrin says the vast experience he gained in the media industry has benefited him in his current position at SDP. “There are similarities as far as management is concerned. In terms of challenges, it is also the same because at the end of the day, both industries deal with consumers,” says the 50-year-old, who was born and bred in Kajang.
“Media is a dynamic industry; the same goes for property development. The only difference is probably that property development has a longer gestation period. It takes at least 36 months to design, build and complete a home whereas in media, whatever you decide today, you will see tomorrow. In media, what was relevant yesterday may not be relevant today. Everything is fast and ever-changing, and in this day and age, consumers want the news now, not tomorrow.
“In many ways, it is the same with property development due to technological advancements, and consumer and social behaviour. Consumers expect developers to accelerate the delivery of their properties. Which is why we are looking at ways to speed up our processes at SDP.”
Amrin is an accountant by training. “My career path includes the financial services industry,” he remarks. He holds a Bachelor of Business Administration (honours) and a Master of Business Administration (Finance) with distinction. He is a member of the Chartered Institute of Management Accountants, the UK, and a chartered accountant of the Malaysian Institute of Accountants.
Indeed, before joining Media Prima, Amrin worked for more than 26 years in the financial services industry with stints in BBMB Discount House Bhd, Development and Commercial Bank Bhd and Amanah Merchant Bank Bhd.
Amrin was also involved in construction and property development previously. “I was with Renong Bhd in 1996 as part of the team that developed the former Bandar Nusajaya, now Iskandar Malaysia. We were its master developer. I then joined Malaysian Resources Corp Bhd in 1999 and was part of its turnaround team. I was also partly involved in the KL Sentral project.”
Keeping up with the times
“A lot has changed since my last involvement in property development. The industry has many competitors now, both established and boutique; the market has changed,” observes Amrin.
“Technology has changed and the completion of projects can be quickened, especially with the introduction of the industrialised building system and value-engineering. Consumers are more drawn to products that offer lifestyle elements as well.
“It is important for our company and employees to keep learning, to keep evolving and to be innovative. As an established player, there is a tendency to be complacent. Therefore, we need to keep changing to ensure that we are on top of our game.”
On the challenges he has encountered at SDP thus far, he says, “As with other property developers, we are affected by the property market, which is expected to remain soft in the short term due to weak consumer sentiment, volatile macroeconomic conditions and strict lending policies.
“Another challenge is to manage our stakeholders, both internally and externally, as they each have different targets and aspirations, wish lists. We have to bring everyone together. Our biggest stakeholder is the consumer who is our priority and central to our objectives. We are reviewing the consumer-experience journey, understanding what they want, from marketing, selling and handover to after-sales, in order to provide the best customer service.”
When asked to elaborate on SDP’s efforts to engage the consumer and keep abreast of technology, Amrin says, “Our digital efforts have changed how we position and enhance our brand image and value, product offerings and customer experience. SDP’s online customer portal features a reporting channel where purchasers are able to report defects. It provides a manual for homeowners that features a list of suppliers and subcontractors that our customers can contact. It also includes renovation guidelines and other useful information.
“We also have a Sime Darby Property mobile app that is available on both Android and iOS platforms and offers users a seamless and convenient SDP experience with its user-friendly interface as well as virtual tours of selected properties. Meanwhile, our presence on our social media platforms (Facebook and Instagram) and website has allowed us to improve how we target and engage existing and potential customers and increase share of voice and followers. Our daily page-engaged Facebook users have increased from an average of 77 in 2012 to 1,510 this year. SDP Instagram has had 2,814 followers since the account was created in 2015.”
Financial results and company culture
In terms of SDP’s strategy, Amrin maintains that it will continue to evolve. “We are focusing on improving our efficiency and reviewing our processes. We are working on reinforcing our team and are in the midst of recruitment to bring in new blood,” he says. He aims to transform the company culture into a winning culture.
As for its financial performance, in its 1QFY2018 ended Sept 30, SDP more than doubled its profit before interest and tax to RM420 million from RM184 million in the previous corresponding period. “In the latest quarter, apart from our property revenue, we did a lot of land sales,” comments Amrin.
SDP saw gains from the disposal of Seriemas Development Sdn Bhd (RM278 million) and Malaysia Land Development Company Bhd (RM41 million) during the quarter. Excluding these gains, profit before interest and tax in 1QFY2018 was RM101 million compared with RM54 million in 1QFY2017, representing an 87% increase. The company recorded a gross sales value of RM528 million in 1QFY2018, selling 667 units compared with 435 units in 1QFY2017.
“We will prioritise our developments based on market demand and offer products that are within an appropriate and affordable price range. This involves leveraging our township developments, such as Subang Jaya, Bukit Jelutong and Taman Melawati,” says Amrin.
“We do plan to increase our recurring income over a period of time by retaining and operating selected key assets. We are doing a strategic review of this, retaining or disposing of some of our assets. Moving forward, there may be more divestment.
“We are also looking at land monetisation. We plan to unlock the value of our existing land, so that we do not add pressure to our balance sheet. We are also looking at partners to co-develop with us. In terms of land bank, we are always open to opportunities to acquire strategic pieces in the future.
“Apart from that, we will harness the growing demand for logistics and warehouse facilities with the growth of online businesses by embarking on build-to-suit facilities in Bandar Bukit Raja (BBR) in Klang with a Japanese conglomerate. This is to grow our recurring income and diversify our revenue base. Logistics, warehouses and industrial activities are ideal for BBR due to its connectivity to major transport nodes and ports.”
Focusing on affordable launches
Founded in 2007, SDP is known for pioneering mega townships, master-planning and infrastructure. The company has built 23 active townships and developments thus far, which include USJ Heights, Ara Damansara, Putra Heights, Bukit Jelutong, City of Elmina, Bandar Ainsdale and KL East, apart from those in Subang Jaya. On the international front, SDP is developing the Battersea Power Station in central London jointly with S P Setia Bhd and the Employees Provident Fund.
“Our focus for FY2018 are our township developments, our affordable to mid-range products and our affordable segment under the Rumah Selangorku scheme,” says Amrin. “Our definition of affordable to mid-range products are those that are priced below RM1 million. We believe demand will continue to be strong in these segments. Despite the challenging market, we believe there will always be demand for the right products in the right location and at the right price.”
In FY2018, SDP plans to launch signature projects in its townships, including Denai Alam (City of Elmina), Bukit Jelutong, Serenia City, KL East, Bandar University Pagoh, Nilai Impian and The Glades.
“Ferrea at Denai Alam will comprise 228 two-storey link homes with an estimated GDV of RM177 million. Phase 5 of Bukit Jelutong will be a serviced apartment block with a GDV of RM343 million. A2 in Serenia City will have 302 two-storey link homes with a GDV of RM166 million,” says Amrin.
Quarza (Tower B) in KL East will comprise 254 serviced apartments with a GDV of RM171 million while Harmoni Damai in Bandar University Pagoh will have 112 two-storey link homes with a GDV of RM42.2 million. Orkid in Nilai Impian will have 132 two-storey link homes with a GDV of RM61.7 million. “In The Glades, we will be launching North Brooke, a strata-titled condominium comprising 72 units with a GDV of RM83 million,” says Amrin.
“Under the Rumah Selangorku scheme, we expect to build 4,000 units spread across Bandar Bukit Raja, USJ Heights, Putra Heights and Elmina West. In March, SDP launched the Harmoni 1 affordable homes (a Rumah Selangorku scheme) at Putra Heights. Harmoni — SDP’s first divergent dwelling design (D3) sustainable homes project — will have 1,700 medium-cost apartments. With an estimated GDV of RM355 million, the development will comprise four blocks of apartments with built-ups of 800 to 1,000 sq ft and be priced between RM170,000 and RM270,000.
“We saw encouraging response for Phases 3 and 4 of Elmina Valley in City of Elmina. Phase 3 recorded a take-up of close to 70% within two days of launch while Phase 4 was fully sold by June. Elmina Green (Phase 1) was launched in October and saw a take-up rate of 75%. Meanwhile, Liana at Elmina Gardens in City of Elmina was launched in Nov 18 and saw a take-up of 40%.
SDP launched its serviced apartment project, Lot 15, at Subang Jaya City Centre on Nov 18. Occupying 2.227 acres, Lot 15 comprises two 20-storey residential towers with a total of 361 units and three levels of retail units. The residential units have built-ups of 624 to 1,001 sq ft and are priced from RM593,888 to RM1,009,888 (RM951 to RM1,008 psf). Lot 15 has an estimated GDV of RM269.2 million.
According to Amrin, Lot 15 saw a take-up of 64% during the weekend of its launch, exceeding the developer’s target of 50% by June next year. “We want to continue this momentum of success in our other projects,” says Amrin.
“The Battersea Power Station development is also showing good progress. Residents started to move into Circus West, the first phase of the redevelopment, earlier this year. Circus West Village at BPS was opened to the public shortly after and since then, more than 350,000 people have visited it to enjoy the ongoing events and new shops and restaurants.
“The Power Station (Phase 2) project (which is 90% taken up), will see 255 apartments above and within the former power generation facility. The Electric Boulevard (Phase 3), the gateway to the entire development, will have 40 retail units and 10 cafés and restaurants. In Phase 3A, 71% of the residential units have been sold. Earlier this month, the tunnelling work (Northern Line extension) to link Battersea Power Station and its surrounding areas was completed.”
During the interview, Amrin often likened teamwork to football. “For the management of an organisation, perhaps one can look at the management of a football team. A successful football team usually stems from good management. You can apply this analogy to property, construction, media and other industries,” says the ardent footfall fan.
Amrin also values quality time with his family and keeps fit by playing badminton, running and walking. “Working in this demanding field, it is important for us to stay healthy and fit, so that we can give it our best.”