UEM Sunrise: Weakened ringgit no impact on foreign operations

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KUALA LUMPUR (Aug 5): UEM Sunrise Bhd said the weakening ringgit has not had any significant impact on its overseas operations, as the property developer already has a presence in foreign markets.

UEM Sunrise’s (fundamental: 1.5 ; valuation: 2.6) acting chief marketing officer Zadil Hanief Mohamad Zaidi said the group has not observed any significant impact yet, following the weakening of the ringgit.

The group had recently purchased a 21-storey office tower in Melbourne, Australia, for A$58 million, marking its third acquisition in Australia after Aurora Melbourne Central and Conservatory.

UEM Sunrise plans to convert the office tower located at 412 St Kilda Road into a luxurious residential development.

“First and foremost, it’s not our first time venturing into the Australian or any other foreign markets; it’s a continuation of what we have done in the past. So whatever changes in the foreign exchange environment, I doubt it would have an effect on our operations,” he said.

Besides Australia, the group also has a presence in Vancouver, Canada and has land banks in Durban, South Africa.

Zadil spoke today at the launching event of UEM Sunrise’s latest RM307 million gross development value condominium development, Residensi Sefina Mont’Kiara. The development comprises 245 residential units with built-ups between 1,333 sq ft and 1,771 sq ft across a 35-storey tower.

The group said the development saw a take-up of almost 60% since its unveiling, exceeding its targeted take-up rate of 40% for 2015.

Although the response has been encouraging, Zadil said there is still some challenges in terms of converting the bookings into sales, in view of the tighter lending policies imposed.

“We do see a challenge in conversion. While people can get the monetary commitment to book and show interest in a particular product, the rate of conversion for them to secure the loans and eventually sign the sale and purchase agreement has been slower compared to the past,” he said.

Despite the dampened sentiment on the property segment, Zadil said the demand for properties is still high, based the group’s previous launches in 2015.

UEM Sunrise rose 0.5 sen or 0.52% to 96.5 sen at the noon market break, bringing its market capitalisation to RM4.36 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)