UEM Sunrise, with RM3bil unbilled sales, to restrategise in Johor (Update)

PETALING JAYA: UEM Sunrise Bhd, the principal developer of Iskandar Malaysia, says it will restrategise and replan, where necessary, in view of the changes in the property market and the entry of China developers in Johor.

UEM Group Bhd group managing director and chief executive officer Datuk Izzaddin Idris said there would always be challenges in the property sector, which he described as “cyclical” in nature.

“With Khazanah (Nasional Bhd) as the parent company, we have the advantage of knowing what’s going on,” said Izzaddin after UEM Sunrise’s EGM yesterday.

In recent months, the property market has softened, while developers from China had launched houses in the Danga Bay area by the thousands, causing concerns of an oversupply in Johor.

“With the unique offerings such as Legoland Malaysia, Pinewood Iskandar Malaysia Studios, townships and other elements, we have the upper hand. Having said that, we will watch the China players closely and adjust our plans accordingly,” he told reporters after the EGM that approved the company’s purchase of 2,500 acres in Kulai Jaya near Senai and the disposal of 500 acres in Gerbang, Johor.

The deal would give UEM Sunrise the option of buying a further 500 acres in the 5,000-acre plot in Kulai so as to round up the development to 3,000 acres within five years, as well as the first right of refusal over the remaining 2,000 acres.

Two joint-venture companies, Scope Energy Sdn Bhd (SESB) and Aura Muhibah Sdn Bhd (AMSB), will be formed for the development in Gerbang and Kulai Jaya, respectively.

UEM Sunrise will have a 40% stake in SESB, which has the mandate to undertake the Gerbang development with Kuala Lumpur Kepong Bhd (KLK).

As for AMSB, which will undertake the development in Kulai Jaya, KLK will hold 40% while UEM Sunrise will have the balance.

The Gerbang land sold to KLK at RM40 per sq ft is more valuable compared with the RM8 per sq ft Kulai Jaya plot, which has yet to be converted from its current agricultural land status.

“Now that we have Nusajaya, that will be our main focus,” UEM Group chairman Tan Sri Dr Ahmad Tajuddin Ali said.

UEM Sunrise’s Almas, a high-rise development in Puteri Harbour, has only sold 25%-30% in light of the cooling measures implemented by the Government last year.

However, Izzaddin said it wasn’t a concern, as there was some RM3bil in unbilled sales and the company would take heed and cater to landed property seekers in Gerbang instead.

In a filing with Bursa Malaysia, UEM Sunrise said the board had appointed Anwar Syahrin Abdul Ajib as MD and CEO effective Sept 1. The positions had been previously held by the late Datuk Wan Abdullah Wan Ibrahim.

Izzaddin will be redesignated as non-independent non-executive director from executive director of UEM Sunrise effective Sept 1.