Business News

Wednesday, 15 February 2017

Sunway Property eyes RM1bil 2017 sales, sees property market improving

KUALA LUMPUR: Sunway Property, the property arm of Sunway Bhd, is targeting RM1.1bil in sales for 2017 in anticipation of an improvement in the property market this year.

Sunway Property managing director, property development division for Malaysia and Singapore, Sarena Cheah said the company will monitor the market closely and launch products that are in demand.

“It’s an uncertain market, but we all know that the property market goes down and comes back up. So we will plan for when the market comes back up,” she told reporters during a media briefing yesterday.

“We will watch the market carefully and come up with products to meet the needs. We will not rush to launch, but we will prepare to when the market picks up because all of the locations that we are in are actually very strategic.”

Cheah said the company will be launching between 10 and 12 projects this year worth RM2bil in gross development value.

“We are confident that these launches will do well as most of it are integrated properties.”

She said the planned launches will model the success of its products last year, the best performers of which comprised integrated developments. Sunway Property’s projects are focused within the Klang Valley, Johor, Penang, Singapore and China.

Sunway Property also announced the acquisition of 8.45 acres of land along Jalan Peel, Cheras, which will be developed into Sunway Velocity TWO, directly opposite the Sunway Velocity Mall.

With an estimated GDV of RM2bil, more than 70% of Sunway Velocity TWO will comprise residential units, complementing Sunway Velocity Mall which consists of 75% commercial units. It will be developed over a 10-year period, said Cheah.

The developer plans to build linkways between Sunway Velocity and Sunway Velocity TWO within the two integrated developments.

Cheah said Sunway Velocity Mall, which was launched on Dec 8 with an occupancy rate of 80%, is currently 97% occupied.“We expect to hit 100% by June this year,” she added. Despite the current oversupply situation within the retail property market, Cheah said Sunway Velocity Mall has been successful due to its good tenant mix, product offering and firm management practices.

Cheah said Sunway Property achieved sales of RM1.1bil in 2016. Unbilled sales stood at RM1.7bil as at September 2016.

The company revised its 2016 sales target downwards as it held back the launch of two projects mainly due to the slowdown in the property market.

Sunway Bhd recorded an 8% increase in its third quarter earnings ended Sept 30, 2016 to RM143.6mil from a year earlier due to better performance from four of its five main business segments, the exception being quarry.

The group, which achieved the better bottom line on a 20% higher revenue of RM1.14bil, reported that pre-tax profit of the property development business grew 62% to RM62.2mil in the third quarter due to higher progress billings from local projects and other property projects in Singapore.

For the nine-month period, Sunway’s earnings fell 23% to RM400.07mil but it posted a 10.1% jump in revenue to RM3.36bil.

Tags / Keywords: Stocks , Earnings , Property , Corporate News , Investing , Property , Sunway Property , sales , Velocity , Sarena Cheah

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