DESPITE a year of uncertainty for new business developments, UEM Sunrise Bhd is among a few developers in Malaysia to have experienced tremendous growth this year.
The luxury developer posted commendable results for the two quarters ended June 30, which saw its net profit surge by 170 per cent to RM155.8 million. Revenue for the period rose 81 per cent to RM1.44 billion.
Major contributors to earnings were the company’s projects in Greater Kuala Lumpur, Johor and in Australia.
Analysts expect earnings to expand in the following quarters as the developer had sold lands in Johor and Canada.
Last month, UEM Sunrise announced three major land deals.
Its subsidiary, UEM Sunrise (Canada) Alderbridge Ltd, sold 1.98ha land in New Westminster, Richmond, to 1107782 BC Ltd, a unit of South Street Development Group, for C$113 million (RM382.54 million).
According to a Bursa Malaysia filing, the proposed disposal was completed on September 29.
In Johor Baru, UEM Sunrise announced two deals inked to a local and foreign investor for the sale of land in Iskandar Puteri totalling RM323 million.
The land parcels are located in the Southern Industrial and Logistics Clusters (SILC) Phase 3, which has a nett area of about 80ha.
UEM Sunrise secured the first deal with solid-surface material and furniture manufacturer, Luxx Newhouse Group, which will pay RM13 million for a 0.93ha site.
Under the agreement, Luxx will also have an option to purchase another 0.93ha site in the industrial park.
It is understood Luxx is looking to create a regional ID (interior design) hub, a furniture gallery and potentially an International Zaha Hadid Museum in Johor.
Luxx had said it would invest RM80 million over the next five years in SILC Phase 3. The investment will involve furniture production in a 60,000 sq ft plant, and house over 200 skilled employees.
The second deal was inked between UEM Sunrise’s wholly-owned subsidiary Bandar Nusajaya Development Sdn Bhd and Country View Resources Sdn Bhd, a unit of Country View Bhd.
The RM310 million transaction is expected to be completed in the third quarter of next year.
UEM Sunrise chief operating officer (commercial) Raymond Cheah said he was optimistic more land deals would come through next year for SILC Phase 3.
“We are upbeat on prospects for SILC Phase 3 after the announcement of the high-speed rail station in Gerbang Nusajaya, which is less than 2km away from the industrial park,” said Cheah.
SILC Phase 3 has a total gross development value of RM800 million.
According to Cheah, the park had achieved about RM50 million of sales since early this year with a couple of deals in the pipeline, mainly from Singapore manufacturers, in precision engineering and consumer products.
“We are focusing on end users instead of investors because we want to stick to our Fiabci Award Masterplan to ensure the entire ecosystem of ‘work, live, play and study’ functions at equilibrium. So job creation is our priority. It is a critical part of building a community of the future with you and for you,” he said.
SILC Phase 3 offers levelled industrial land with ready infrastructure, build-to-suit packages and limited units of ready-built facilities.
Development of the land is scheduled to be completed by the first quarter of next year.
The park, which faces the Second Link Highway, is only 10 minutes away from the Malaysia-Singapore Second Link, Customs, Immigration and Quarantine and Port Clearance Complex, and 15 minutes away from the Port of Tanjung Pelepas (PTP).
Cheah added that SILC Phase 3 benefited from the unique position — with access to the freight railways linked to Senai, Johor Baru Central, Pasir Gudang and PTP.
SILC Phases 1 and 2 were completely sold out, and businesses from 12 countries have made them their homes today.
UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib expects SILC Phase 3 to be fully taken up within the next three years.
“It’s not easy... the market is tough and companies are cautious about their capital expenditure (so) finding that right tenant mix is very critical.”
“The idea is that we want to create industries. We want international companies that can come in and create products that will then develop businesses further around the area to support them.”
Meanwhile, Luxx founder Jimmy Tong said the company was investing in SILC because it saw Iskandar Puteri as a regional hub to best serve the local market, while gaining access to the wider Southeast Asian region.
The company would be consolidating its operations in Shah Alam, Selangor, within its new plant in SILC, which would be ready by 2020, he said.
Country View will undertake a mixed commercial project with a gross development value of RM1.26 billion on the land that it is buying.
The project will feature resort-linked villas, shop offices and commercial land.