KUALA LUMPUR: Iskandar Malaysia’s biggest property developer UEM Sunrise Bhd will focus on Peninsular Malaysia’s central region, as Johor faces a property glut and slowdown.
Managing director Anwar Syahrin Abdul Ajib said the company would be shifting focus to the central and northern regions as well as overseas.
He added that it would be unhealthy for the company to only have exposure in Iskandar Malaysia.
“Certainly, having 70% to 80% of businesses concentrated in Johor may not be seen as a good thing at this point in time.
“But in the long run, I still believe in Johor because of its proximity to Singapore. Eventually, they still have to come to our side,” he told reporters.
UEM Sunrise is regarded as the biggest property developer in Johor by virtue of it being a subsidiary of Khazanah Nasional Bhd, which is the biggest landowner in Iskandar Malaysia. Khazanah has drawn a masterplan for the entire development of the southern corridor, where development is supposed to take place in phases.
However, the entry of developers from China such as Country Garden Properties and Guangzhou R&F Properties Co Ltd, who have embarked on several large-scale developments in and around the water-fronting areas in Johor Baru, has caused an increase in supply over a short period of time as compared to the orginal plan.
For instance, Country Garden launched 9,000 units of high-rise condominiums in August 2013, a scale that was unprecendented. Some 6,000 units have been taken up, according to the company.
According to a property official in Johor, work is progressing fast in the project and other similar projects launched by developers from China.
Anwar said the shift towards the central region was necessary, as Iskandar Malaysia faced a downcycle and the company also needed to weather other “potential storms”.
“Right now, it’s a bit slow. There’s nothing to hide ... everybody is feeling it. Some developers have already cut their forecasts, some are saying growth is stagnant while some say they’re going to do better than others last year,” he said.
The group has achieved RM2.4bil in sales last year and is targeting RM2bil this year, as buyers are finding it hard to secure loans from banks.
“We need to find a solution and talk to financial institutions and see whether they need to relax a bit in terms of letting people be able to purchase houses for investment purposes,” he explained.
Anwar does not know how long the downtrend will last, as oil prices remain one of the factors that determine Iskandar Malaysia’s vibrancy.
“If oil prices catch up, then we can see Pengerang busy again. That will again be the stimulus for the whole area.
“For us, we are just continuing with what we have. We will focus on our catalytic developments like our harbour, private marina, the motor sports city and the high-speed railway,” he said.
On the company’s progress this year, Anwar said the company planned to launch RM3.7bil worth of projects this year, with another RM39bil in gross development value still in the pipeline. Of the RM39bil, half of the projects are wholly owned while the others are joint ventures, mostly in Johor.
The projects that UEM Sunrise will launch this year include Serene Heights@Bangi, a landed residential; Sefina@Segambut, a high-rise project in Kuala Lumpur, by year-end; and the second phase of Aurora Melbourne Central, a mixed development, by the second half of the year.
Besides Malaysia, UEM Sunrise has projects in Singapore; Vancouver, Canada; and Durban, South Africa.