UEM Sunrise to rely less on projects in Iskandar Malaysia

KUALA LUMPUR: UEM Sunrise Bhd plans to restrategise in terms of product offering and location, in order to reduce dependency on its projects in Iskandar Malaysia and spread out risks, said its managing director and CEO Anwar Syahrin Abdul Ajib.
"Our strategy is to diversify a bit. One of the concerns that people have about UEM Sunrise is the high dependency on our developments in Iskandar Malaysia. If you look at our landbank, perhaps just a bit more than 60% is actually in Iskandar," he told reporters at a briefing yesterday.
"If there is an opportunity for us to diversify away, we can do some form of land swap or monetise some of this land that we have in Iskandar for an acquisition of land somewhere else in Malaysia or abroad, why not? It's something that we are willing to consider," Anwar said, adding that it is looking for opportunities in land banking both locally and abroad.
He said its first half performance reflects a challenging market and the company is trying to spread out geographically and also in terms of the product mix that it has.
UEM Group Bhd group managing director and CEO Datuk Izzaddin Idris said it plans to revamp and relook the product offerings it has in its remaining landbank in Nusajaya.
"That's currently work in progress, it will take a little bit of time before we can have the approvals all in place before we launch and that's probably in the first quarter of next year," he said.
In terms of land swap, Izzaddin said the group has always been on the lookout for opportunities and has been talking to several parties, having received some proposals but did not elaborate.
Anwar said the group is also reviewing its business model and considering having a recurring income base to mitigate fluctuations in the property market. He did not elaborate further on this.
Meanwhile, the group is maintaining its RM2 billion sales target, despite having only achieved about RM560 million in sales as of end of August.
Izzaddin said 60% of this year's sales will come from projects in Nusajaya, 25% from Australia and the balance from projects in the Klang Valley.
"What's more exciting is our development in Melbourne. The two parcels of land that we bought, we hope to get the planning approval soon from the Department of Planning. We're going to transform an eight-storey carpark into a 92-storey mixed development, with something like 940 apartments, 200-key hotel and some retail components," he said.
Izaddin said the development, which will be launched in November, sits above the Melbourne Central underground station with three blocks of shopping malls across and 80 metres away from Royal Melbourne Institute of Technology.
On its RM1.3 billion Aurora Tower development which is yet to take off pending a suit initiated by Rakyat Holdings Sdn Bhd, Anwar said Rakyat Holdings is likely to appeal the High Court's decision earlier this month which upheld UEM Sunrise' right on the former Wisma Angkasaraya site. A hearing on the matter is expected to take place next month.
On a separate issue, Anwar said the new minimum prices for foreign purchases in Selangor has created uncertainty within the market but the group is able to mitigate the risk as it has projects in other states as well as abroad.
The Selangor state government, which has divided the state into several zones, has increased the minimum price for foreign purchases to RM2 million for certain zones, effective Sept 1.
"We still have a lot of product launches that we intend to do in areas outside of Selangor, for example in Johor and on the international front," he said.
He said although the situation is not ideal, the group has enough launches to prepare it for the next upswing in the market.
"This year and next year could be stagnant, we're looking for things to go back to the good old days perhaps in 2016 or late 2015. As far as we're concerned, we would like to look around for opportunities on land banking as well as strengthening our core competency within the organisation."