Top officials: (from left) Mitsui-Fudosan Asia executive director Tomoo Nakamura, Kuwait Finance House corporate banking assistant director Rosalin Ahmad, Mitsui-Fudosan managing officer Osamu Obayashi, Cheah, EPF head of domestic and regional real estate private markets department Mohd Auzir Zakri Abd Hamid and Sunway Bhd property development division for Malaysia and Singapore deputy managing director Tan Wee Bee at the roof topping out ceremony of Sunway Geo Residences development.
SUBANG JAYA: Sunway Property believes the higher level of consolidation taking place within the slowing property market currently will bode well for the sector over the long term.
Sunway Property managing director Sarena Cheah said it is crucial for property developers to focus on products that are relevant during a market slowdown.
“We’re already seeing some consolidation happening in the property market. We believe it is beneficial for the market in the longer term,” she said at a roof topping out ceremony of the company’s Sunway Geo Residences development here yesterday.
“Marketwise it will be slower but for developers like us, we will continue to build and invest in locations and the townships that we build.”
Cheah said the Sunway group will be launching projects totalling RM2bil next year, emphasising that the company will be focusing on designing and pricing products that are relevant to market needs and demands.
“Our launches are across the country, with heavier emphasis on the south and central regions.”
On whether the company plans to focus on affordable projects, she said: “That will be relative to the location. Most of our products are below RM1mil. Of course, that will also depend on where our landbank is.”
According to reports, Sunway registered new sales of RM192mil in the third quarter of this year, bringing the total new sales to RM805mil for the nine months of 2016, accounting for 73% of the new sales target of RM1.1bil (from RM1.4bil initially).
In the fourth quarter, it plans to launch another RM245mil worth of properties, including retail and offices in Sunway Iskandar and Tianjin Eco-City condominium.
Sunway held back the launch of two projects this year, due mainly to the slowdown in the current property market.
“For this year, we delayed two main projects, one of which is the last component Sunway Geo Residences,” said Cheah.
“We delayed it slightly because we’re improving the connectivity and accessibility from this particular development towards the retail, offices as well as the medical centre. We’re delaying the launch to next year.”
Sunway also abandoned plans to sell its Sunway Velocity office units, choosing instead to retain it as a property investment asset.
“The other component that we’ve held back is an office block on top of the Sunway Velocity mall.
“We feel that because it’s located on top of the mall we may actually want to rent it out first and potentially use it as a real estate investment trust-type product rather than put it out to the retail market.
“We’re not in a position where we must sell; and that is important because that means we can manage our strategy in line with our market cycles and at the same time, being able to optimise value for the project as well as the overall development.”
Meanwhile, Sunway Geo Residences, which is part of the 23-acre Sunway Geo integrated development comprising residences, retail and office units – with a combined gross development value of RM2.2bil.
Sunway Geo Residences is a 67:33 joint venture between Sunway and Japan’s Mitsui Fudosan Co Ltd. Comprising 472 apartments within two 30-storey blocks with a GDV of RM490mil, all units have been sold and will be delivered in April next year.