Without a doubt, the success story for us is where we are now.” — Anwar Suhaimi Yusuf/The Edge
Housing and Local Government Deputy Minister Datuk Raja Kamarul Bahrin Shah (third from left), with (from left) The Edge Media Group chairman Datuk Tong Kooi Ong, Anwar Syahrin and The Edge Media Group publisher and CEO Ho Kay Tat Mohd Izwan Mohd Nazam/The Edge
Artist’s impressions of Eugenia Picture by UEM Sunrise
Artist’s impressions of Residensi Astrea Picture by UEM Sunrise
No. 7 (joint ranking) – UEM Sunrise Bhd
After taking a sip of water, UEM Sunrise managing director and CEO Anwar Syahrin Abdul Ajib settles in for the third interview of the day. Although it has been a long morning, he is still energetic and chatty.
UEM Sunrise is celebrating 50 years of building communities this year. “Without a doubt, the success story for us is where we are now. You see Mont’Kiara and how mature it is … that is living proof of what the company has done over the past 50 years. We have grown from a small company into a company with land bank of close to 10,000 acres,” says Anwar Syahrin.
Last year was significant for the developer, with Iskandar Puteri in Johor achieving city status in November. As the master developer, Anwar Syahrin says the company cannot be prouder of this achievement.
Property sales for the first half of this year amounted to RM663.8 million, 69% higher than the same period last year and the company is on track to meet its sales target of RM1.2 billion.
The southern region contributed 27%, largely from Serimbun, Estuari Gardens and Denai Nusantara. Some 45% was contributed by projects in the central region — mainly Residensi Solaris Parq, Kondominium Kiara Kasih and Symphony Hills.
Besides remaining steady in the local market, the developer’s foray into Melbourne, Australia, shows it is capable of doing projects abroad. Two of its overseas projects, Conservatory and Aurora in Melbourne, will be completed soon.
“We have done a lot. But we feel the organisation is not about UEM Sunrise, it is the people, and they have delivered,” says Anwar Syahrin.
The company has, once again, made it into the top developers’ ranking in The Edge Malaysia Property Excellence Awards.
Anwar Syahrin talks to City & Country about UEM Sunrise’s progress and its future plans and direction.
City & Country: UEM Sunrise is doing well and on track to meet this year’s RM1.2 billion sales target. How has the year been for the company and how did it achieve such good results in the current challenging market?
Anwar Syahrin Abdul Ajib: The year has not been easy. We approached the year with cautious optimism because we looked at the reports last year and people were saying that the market has bottomed [out] … you could see from the price index and so forth that things were picking up. Early in the year, we saw interest coming in, loan approvals improving and there were some launches as well.
The idea for this year has always been about monetising our inventory. So, that has been taking place. We are very cautious about launches. That is why we have said that we will only launch about RM1 billion worth of projects this year. We have launched about RM600 million so far and we are looking at another RM350 million from Residensi Astrea.
Thankfully, we also had some good news in terms of land disposals. We were able to enter into a deal with Country View Bhd, which bought a sizeable tract from us in Iskandar Puteri. While sales on the property development side have not been like those in the glory days, we have been able to do some monetisation of our land bank.
In this challenging market, we have to persevere … you just have to carry on. Our projects in Melbourne, Conservatory and Aurora, will be completed soon.
Based on the new accounting standards, we are not allowed to recognise income until we hand over the keys. That is why it is very important for us to hand over Conservatory and Aurora.
Residensi Sefina and Residensi Solaris Parq are progressing well and we have handed over some keys for Residensi 22.
We have to make sure that the progress of our projects remains on track, so that we can recognise the income. Our unbilled sales last year were close to RM5 billion, so this allows us to recognise the income for the year that we have achieved so far.
We have been able to do some inventory monetisation, clear some old stock and improve our overheads. We have been very strict on cost and expenditure, as the way we spend our money will add up on the bottom line. It is a combination of things that allowed us to recognise the income that we have recognised so far.
Earlier you mentioned a land disposal deal with Country View. How will this affect the company?
The idea is to use the proceeds from the disposal for land acquisitions in Kuala Lumpur. People think that we are very Johor-centric. We want to say that our presence is not just in Johor but in the Klang Valley as well.
So we have Serene Heights (in Bangi), Mont’Kiara and, now, we have Kepong — the new Mont’Kiara. With the land in Kepong (near Kepong Metropolitan Lake), we will have about 15 to 20 years worth of gross development value. So we are scouting around for more land bank in Kuala Lumpur or the Klang Valley.
Eventually, perhaps our sales will be equally from the Klang Valley, Johor and international. So we must be able to play around with that mix by getting the right land bank in these locations.
How do you see the market in the southern region?
It is not as strong as before, that is for sure. Landed property, which is our bread and butter, is strong. People are queuing up for Serimbun, which is about 70% taken up. The houses are 20ft by 75ft. Melia Residences, also 20ft by 75ft landed properties, are selling at about RM600,000 and the response has been quite good.
When you offer such products, people will queue up. They started queuing for Serimbun the night before and the line grew quite long. Similar products by our competitors are seeing the same response.
The market [in Johor] is very specific … that is why you cannot generalise. People are very particular about the location and price.
What challenges is the company facing in the current soft market and how do you plan to overcome them?
I think the challenge is to get people to want to buy and to commit a huge amount of their earnings to home ownership. We are fortunate that we have Kepong coming in, which will address the affordability factor because it is priced attractively within that target market. Kepong is the middle 40 market, not the bottom 40. We think we are bringing something exciting to Kepong.
We have to be cautious about high-end and high-margin products … that is why Astrea is a low-density development. When we access opportunities for landbanking, we want to make sure the land is not too expensive, because we know the density cannot be too high. We want to break it down ... we don’t do 400 units straightaway, for example. We are strategising our launches.
But most importantly, it is to strengthen our value proposition for our customers so that we have more repeat buyers. There is nothing like word of mouth when it comes to promoting something. So, we want our customer experience to be top-notch. We are working hard on this.
Of course, sales are going to be another challenge given the market. We are cautiously optimistic ... As I said, price point, product and size come into play.
Tell us more about the upcoming projects locally and internationally.
We are going to launch the first block of the Kepong project in the third quarter of next year. We have Residensi Astrea here in Mont’Kiara, as well as a landed residential and commercial project in Johor.
We are looking at another extension to Serene Heights. We have already done Acacia, Begonia, Camelia and Dahlia. Eugenia will be coming in soon, which comprises 22ft by 75ft terraced houses.
In Australia, apart from Mayfair, we have no new launches. We are scouting around for land opportunities. For now, there is nothing overseas except for what we have already launched.
What are your overseas expansion plans?
We are scouting around … could be Sydney or London. We have got land in Durban, South Africa. But because we are strong in residential, we will need to find co-investors for Durban to do hotels and retail. Then we can really activate the area. So right now, we are looking at some opportunities and talking to some people.
In Australia, there are some transit-oriented development opportunities in Sydney but they are very expensive. If we want to do it, we have to find partners. But I thought the numbers were too high and I was not comfortable.
We are looking at some sites in London. Again, we have not come to any firm decisions.
How do you plan to strengthen the company’s presence in the local market?
Kepong is one, where we have decided to buy a sizable piece of land. If we can get another one in Kepong, that would be nice. Then we can launch up to RM2.5 billion [of projects] every year. The goal is always there. We want to move towards RM2.5 billion sales every year. I want to fill up as much as I can on our unbilled [sales], and then, consistently every year, we can do about RM2 billion to RM2.5 billion per year.
Right now, we are only doing RM1.2 billion. It is tough. So, we need to find opportunities to achieve our goal. But we need to think about the future of real estate and whether this model is still relevant or not. For all you know, the future is rental and not about people buying houses anymore.
What are the future plans for UEM Sunrise and what are the strategies put in place to hit the RM2 billion to RM3 billion sales target?
Like any other company, we want to see steady revenue growth. In five years’ time, I would like to double the profit. So, we have to figure out how. That is why I said earlier, whether the business as it is now is relevant for us to achieve our targets. I know my net asset base. So am I earning enough from my net asset?
If we can get 5% to 6% for now from our net asset base, then we can grow further. So, we need to play around with that and the end goal is to be able to do RM2.5 billion to RM3 billion in sales. That is ultimately what we are moving towards.
The right land bank and product … these are the strategies that we have. We need to get the right land bank to put in place our E.V.E standards – Exciting, Value, Easy. That is what it is all about. We need the right land bank so that people will come and buy.