This article first appeared in City & Country, The Edge Malaysia Weekly on November 11, 2019 - November 17, 2019

The atmosphere at UEM Sunrise Bhd’s headquarters at Solaris Dutamas is calm on a Monday morning. Moments after we enter a hallway adorned with artworks, managing director and CEO Anwar Syahrin Abdul Ajib emerges and greets the City & Country team, before leading us into his office.

“I returned from Tokyo last week,” says Anwar Syahrin, who appears energised and inspired. “The developments in Tokyo are exemplary, especially when it comes to smart-city initiatives and promoting greenery. It is good to observe other markets overseas to compare, so we continue to push ourselves to develop innovative products,” he says, as he settles into his seat.

UEM Sunrise maintains its relevance and continues to forge ahead in unfamiliar territories and create new products. This year, the company won a spot on the list of Top Developers Award at The Edge Malaysia Property Excellence Awards.

Best known as the pioneer developer of Dutamas and Mont’Kiara, Kuala Lumpur, UEM Sunrise hopes to repeat this success with another upcoming township in Kepong this year. “It is important for us to venture into new areas and to widen our presence in the market,” says Anwar Syahrin.

“Our latest offering is Kiara Bay @ Kepong Metropolitan, comprising two residential blocks and a retail component with a gross development value (GDV) of RM656.5 million. This 73-acre mixed-use development is our way of broadening our portfolio for our shareholders.”

According to Anwar Syahrin, the company is looking for opportunities. “We are actively looking at land in different areas [both locally and abroad]. Our most recent acquisitions are two smaller parcels measuring about three acres each within Mont’Kiara — one last year and the other this year. We plan to develop residential blocks, which is our bread-and-butter product. We hope to put them on the market next year.”  

As at 3Q2019, UEM Sunrise had a developable land bank of 13,000 acres (including land slated for joint-venture developments) with a total GDV of RM114 billion. The parcels are located in different parts of the country.

In the southern region, it has 9,990 acres in Johor, with 49% in Iskandar Puteri and the remainder in Desaru, Kulai and Mersing. Some 19% of its land bank is located in Tapah, Perak, while the remaining 5% is in the central region. The parcels in Durban Point, South Africa, represent 0.2% of the group’s total developable land bank.

The company is also known for its extensive list of projects in Mont’Kiara including 28 Mont’Kiara, 11 Mont’Kiara, Arcoris Mont’Kiara and Residensi Sefina. On the international front, the company has two completed projects in Australia — the residential towers Conservatory and Aurora Melbourne in Melbourne.

Here are some of the highlights of our conversation with Anwar Syahrin on UEM Sunrise’s overall plans and views of the market.  

City & Country: The company is on track to achieve its sales target of RM1.2 billion this year. Please review the group’s performance in the last 12 months.

Anwar Syahrin Abdul Ajib: It has been a great year for UEM Sunrise so far this year. Our current focus is on mid-market landed developments and up-market projects in strategic locations.

In August, we announced that UEM Sunrise’s first-half 2019 revenue was RM1,419.8 million, a 65% increase compared with 1H2018. Some 95% of this was contributed by property development, driven by the completion and settlement of Aurora Melbourne Central’s separable portions, SP3 and SP4, as well as Conservatory’s SP1, SP2 and SP3.

At home, we have seen some positive outcomes from our participation in the Home Ownership Campaign 2019 for properties like Serene Heights, Serimbun, Aspira Lakehomes and Aspira ParkHomes. We hope to continue to secure more sales as the campaign has been extended to the year end.

Sales contribution from the southern region improved in 1H2019 compared with 1H2018, partly due to the success of our mid-market landed Aspira ParkHomes in Gerbang Nusajaya.

As for developments in Puteri Harbour, Johor, we are acquiring the retail assets and a theme park building owned by Themed Attractions Resorts and Hotels Sdn Bhd. We plan to improve the overall design of the assets to secure the right tenant mix and increase vibrancy and footfall. Our hope is to unlock Puteri Harbour’s development potential and allow us to achieve operational cost savings.

Our asset divestment and land portfolio rebalancing strategies are ongoing. We also continue to consolidate our margins through smart spending initiatives, project cost savings and containment of operational overheads.

Which product segment has been the best-performing in the last 12 months?

Across the board, [the performance] of our products has been location-centric. Our mid-market landed developments in the RM500,000 to RM700,000 price range in Serene Heights, for example, have done exceptionally well.

We will continue to be cautious about product launches and we plan to maintain our current focus on mid-market landed developments and selected up-market projects. Despite the challenges, we also see opportunities and will continue to offer our unique brand value propositions.

What are the challenges and how does the company plan to overcome them?

It is the overall feel of the market. There are too many uncertainties [on an external level] such as palm oil prices and the US-China trade war. It does not sit well with an export-dependant trading nation like ours.

While the government is trying to instil more discipline [in terms of managing the balance of payments] and corporates are being conservative [with their numbers], consumers will be picky when it comes to purchasing property. Apart from that, banks are tightening credit and there is an oversupply [in some product segments].

We anticipate that the industry will remain challenging in the short to medium term. To overcome this, we will exercise prudence in our product launches and remain pragmatic in our targets.

We will also focus on transforming ourselves into a dynamic organisation that delivers results. Now is a good time to do some “housecleaning”. By that, we mean to improve our processes, our customer interface and to deliver our products at a lower cost. We will strive to create operational excellence within the company.

How does UEM Sunrise continue to distinguish itself from its peers?

We are in the process of rebranding and exploring new frontiers. We plan to improve on our customer segmentation, strategies and revenue generators to ensure our competitiveness and sustainability. This will be achieved by using data analytics, research, improved sales processes and investment in technology.

Our strength is in our high-rise and township products. Our point of differentiation strongly lies in the quality of our products. All the razzmatazz [of marketing and branding] will wear off if the product is not good. Our design teams are constantly pushing the boundaries to tailor our products for our target market. It is about understanding the needs and habits of our consumers, for example, for our Japanese clients, it is their preference to have bathtubs in the master bathrooms, so we try to think these things through.

We place great emphasis on the overall experience of purchasing and living in a UEM Sunrise product and community. We understand that consumers have higher expectations and we try to live up to our promises to them.

In fact, we take into account all changes in consumer behaviour. Most of our purchasers now are millennials, so we modify our products, townships and services accordingly to suit the ever-changing market.

Today, UEM Sunrise has teams for digital marketing. Our digital marketing has, in fact, strengthened our branding and campaigns. We have amped up our public relations, media relations and community events in the delivery of our products. UEM Sunrise is a youthful organisation — we have been hiring young blood to generate fresh ideas for our company.

What are the company’s future plans and targets?

For next year, the company is looking to launch 15 projects with a target of close to RM2 billion in GDV. Most will take place in the second half of the year. About 70% of these products will be priced below RM1 million and some 25% above RM1 million.

For the short to medium term [in 4Q2019], we have a few upcoming projects lined up apart from our headline Kepong Metropolitan project. One of our upcoming projects is Embun Residences, the first phase of The Maris @ Desaru in Johor, which will comprise resort-style homes and have a total GDV of RM2.8 billion.

We also plan to launch another residential development in Gerbang Nusajaya, Johor, called Aspira Gardens, with a GDV of RM84.7 million. We believe this is the next growth catalyst and it will serve as the business and economic engine of Iskandar Puteri, which will feature lifestyle and retail zones, a campus, offices, industrial hubs and residential precincts.

We will also launch a new phase in our RM3.7 billion Serene Heights township, comprising 135 two-storey terraced homes. Built-ups range from 1,803 to 2,837 sq ft with prices starting at RM550,800.

We have also been looking for opportunities on the international front. We have disposed of our Mayfair project in Melbourne, which gives us a good cash balance to look at other parcels.

Frankly, we cannot rely just on our domestic products to sustain and a large part of our revenue derives from international projects. Our target is to reach a 70:30 ratio of local versus international products for the long term, although currently our projects are almost 100% domestic . We intend to activate our Durban Point Waterfront project in South Africa soon, and we are eyeing fast turnaround projects in Australia, but so far nothing is firm just yet.

It is a challenging yet exciting time for us, and we are confident the company will continue to deliver and to entice homebuyers. We are confident in our future trajectory, and we believe our products will continue to attract healthy sales.

We hope to take the company to another level, with a little more pizzazz and entrepreneurship. It is not just about selling homes, it is about monetising space, harnessing our ability to assist consumers in solving their problems and coming up with solutions through our products.

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