This article first appeared in The Edge Financial Daily on February 28, 2018
KUALA LUMPUR: Property developer UEM Sunrise Bhd is set to launch projects worth RM1 billion in gross development value (GDV) this year, with plans for a new township similar to its Mont Kiara development to be located within the central region.
Its managing director and chief executive officer Anwar Syahrin Abdul Ajib said the group is looking to develop the next Mont Kiara, but at more affordable prices.
The RM12 billion GDV project, which will take about 15 years to complete, will be a mixed development comprising residential, office and retail components. The first component of the project could potentially be launched within this year, with an estimated GDV of RM205 million.
“We want to be able to give people the lifestyle and quality of Mont Kiara at a more affordable range, so we are leveraging on what we have learned in developing Mont Kiara for the new township,” he told a media conference to update on the group’s financial results for 2017 yesterday.
Anwar said the products to be offered will be priced between RM500,000 and RM1 million per unit.
“That’s a big range, but we believe that is the affordable range for KL-ites. Either way, we need to be very careful with the products that we bring into the market,” he added.
Anwar declined to elaborate, but said the development will be done on a big plot of land somewhere in the central region, featuring a core development that will bind the project together.
Other launches in the pipeline for the central region include the Kiara Kasih apartments (RM217.5 million GDV), the MK27 high-rise development (RM249.9 million) and two-storey terrace houses at Serene Heights (RM53 million).
In the southern region, UEM Sunrise will be launching Phase 1A and 1B of Serimbun (RM139.3 million) and Phase 3 and 4 of Iris (RM137.3 million).
Currently, the group has about 20 to 30 acres (12.14ha) of land here, bringing its total land bank in the Klang Valley to about 500 acres. It also has about 10,000 acres of land in Johor.
“We do have a lot of land in Johor, but we don’t have enough in the central region. We believe that the market in the central region will always be strong for the right products and we are looking for opportunities to acquire more land,” said Anwar.
“We don’t want to have too many small plots of land. We prefer to build communities and townships which require a sizeable tract,” he added.
He said the group’s ongoing disposal of its non-core assets is an avenue for it to raise cash without borrowings, which will be used to acquire new plots of land.
Anwar said the group will continue to sell off some of its assets on a selective basis and is likely to dispose of some of the pockets of land it owns in Johor. However, it is unlikely to dispose of its overseas assets, considering that its land bank overseas is already limited, he added.
While some developers are shying away from luxury projects amid concerns over subdued demand for high-end properties, UEM Sunrise is maintaining its focus on the high-end market.
“We like to sell more of the luxury projects because of the higher GDV, margins and profits. But we have to be very careful of the product mix. We can only launch products that we think the market can take.
“Meanwhile, for the affordable homes, we may sell a lot of units but the GDV is only so much,” said Anwar.
“And we don’t want a dilution of UEM Sunrise’s brand either. That’s why we see the RM500,000 to RM1 million [price tag] as our affordable range as we feel that it is affordable within the context of UEM Sunrise,” he added.