Though he took on the position of acting managing director of Sime Darby Property Bhd (SDP) only on April 1, Datuk Jauhari Hamidi wears his responsibility with casual ease.

He is pleased that Sime Darby Bhd’s property division has once again appeared amongst the Top 10 of The Edge Malaysia Top Property Developers’ Awards. The award proves that the company is meeting customer needs, he says.

“There is no secret to SDP’s success. It is all about understanding what your customers want. As long as your product is in demand and the product that comes out every year has value-add and gives customers something different, they will keep coming back to you,” he adds.

Before joining SDP, Jauhari — who has been with Sime Darby for over 33 years — had worked for the group’s oil and gas segment, which was sold in 2011. However, he is not inexperienced in property development, having been the managing director of Sime UEP, the developer of Subang Jaya, from 2004 to 2007.

Having been away from the property industry for a while may seem like a disadvantage to some but Jauhari believes his “outside” perspective will bring something refreshing to the team to help them think out of the box and be innovative.

And this emphasis on innovation is what Jauhari believes has kept SDP ahead of the game and developing products that meet the demands of the homebuyer.

He shares that the division is looking to up its sales target for the current financial year to RM3.6 billion from selling about 4,626 units that comprises new and existing stock. In FY2014 ended June 30, SDP achieved gross sales of RM2.1 billion with 1,659 units sold.

He understands that moving forward, SDP will need to look beyond its traditional residential developments to include more integrated developments and property management. “Property development goes beyond building and selling houses. We have to move a step further and we are now an integrated, comprehensive property player.”

Among the integrated projects SDP is undertaking is a mixed-use development called Radia with UEM Sunrise Bhd in Bukit Jelutong, Shah Alam, and PJ Midtown with IOI Properties Group Bhd in Section 13, Petaling Jaya. It is also working with Singapore’s CapitaMalls Asia Ltd on the Melawati Mall in Kuala Lumpur.

Jauhari talks to The Edge about how he is looking to keep SDP relevant to a challenging market.

 

The Edge: What strategies are in place to deal with the soft property market at this time?

Datuk Jauhari Hamidi: We are putting a lot of strategies in place but first, you need to know that your product is still in demand. Because if your product is not in demand, no matter what strategy you have, nobody wants to buy it. The first thing is to make sure that the product that we put on the market meets the requirements of our customers. How do we do that? We do a lot of engagement sessions. We even worked with Universiti Malaya to create a Housing Price Index.

You need to know the affordability of the customers and then package something that will meet their requirements. Of course … construction cost has gone up because of the Goods and Services Tax, building materials have gone up … there is [only] so much we can absorb, there is [only] so much we can pass on but what we pass on is something that we will then compensate [the customer] with, which they can appreciate. Either we give them a slightly bigger space or slightly better amenities or something that other townships are not giving.

 

You sold land to Eastern & Oriental Bhd and Sunsuria Bhd in the last financial year. Are such sales part of the division’s business strategy moving forward?

As part of the strategy moving forward, we will be looking at co-developing. The co-developer can come in in the form of outright sale of land, and we will obtain the approval for the land that is already earmarked, whether it is residential, industrial or so forth.

And if the party wants to collaborate with us on some specific landbank and their plan is what we want ... I think that is a transaction that is part and parcel of property development.

A very good example is Eastern & Oriental Bhd (E&O) . For the transaction of the piece of land in Elmina West, E&O wanted to do a wellness concept development in the area that fits the overall Elmina concept.

There is also Sunsuria Bhd. Sunsuria was an outright sale. We wanted to do a JV and that JV bought pieces of land for them to develop. But sometimes a joint venture goes on to a stage where it is much more aggressive than us. They say, we want to do this, we want to do that, but remember Sime Darby has other parcels of land that we want to develop. Cash flow is very tight. As a result, we have to prioritise and strategise. And Sunsuria was asking if there was a possibility of buying our share in the JV. So we said, go ahead. So, from that perspective, it was a share transaction rather than a land transaction.

 

With the weakening ringgit, do you see Malaysian property as a good deal for foreign investors?

Of course, for the same product that is being offered, it is less US dollars, less Singapore dollars, less UK pounds they have to come up with. From that perspective, yes, it should excite the market, it should bring in a lot of investors here. But we have yet to see that.

 

How do you deal with the challenging market conditions?

First, you need to realise there are challenges. Then you analyse the challenges and look at how to solve them. Because sometimes people take the easy way out and are constantly in a state of denial. We don’t do that.I took the trouble to do a brand audit. What does the brand of Sime Darby Property say to our customers? And this is key because I need to know. The perception in the market currently is that Sime Darby Property’s products are slightly more expensive. That is the perception. Rightly or wrongly, that is the perception. So, how do we manage that?

Okay, of course, we are very proud; we believe that if you want a quality product, you have to pay slightly more for it. If you want a BMW, you have to pay for a BMW, if you want other brands, you have to pay accordingly. We are setting ourselves as a BMW product. When you set yourself as a BMW product, the attributes of a quality product must be there.

 

What is SDP doing to reduce construction cost so that quality houses can be built efficiently?

We believe innovation is the key. We take it very seriously, to the extent that we have an innovation council. It can be seen in both our products and our processes. For products, there are a lot of things that are different from what you have been providing all this while. You have to innovate the process so that the product gets to your customer in the shortest period of time with the highest quality and within the budget.

 

What is your upcoming product launch or launches?

For this financial year, the transit-oriented development (TOD) that we are going to launch is in Ara Damansara, called Cantara. There are 888 serviced apartments in four blocks located within walking distance of the Kelana Jaya LRT station and there will be a covered walkway, so basically, as far as the buyers are concerned, this is a TOD and more than 80% of the units are in the range of 800 to 1,000 sq ft. Small enough for a young family to stay. We have not announced the price range yet but we believe it will be maybe RM600 to RM700 psf, which works out to about half a million to RM600,000.

As of today, 3,000 registrants have already registered ... this is by word of mouth. By the time we are ready to launch, in the first quarter of next year, we should be able to achieve our target of at least making sure during the launch week that 40% to 50% of the units will be taken up.

 

What other projects will SDP be focusing on?

We will unveil our development at the Kuala Lumpur Golf and Country Club in Mont’Kiara. It will sit on 72 acres there, all fronting the golf course. Details are being finalised. There are also landed properties in Elmina West to be launched in 1Q2016. There are projects in Nilai Impian in Nilai, Bandar Ainsdale in Seremban, in Bandar Bukit Raja, Klang, and Bandar Universiti Pagoh, Johor.

Bandar Universiti Pagoh will see the building of five universities there that will be handed over in June 2016, a year earlier than the initial target of June 2017. It will cover 2,000 acres. The central portion will be the five universities and the surrounding areas will have residential, commercial and industrial properties to support the hub. A KL-Singapore high-speed rail station will be located there. TEPEA 2015

Do not ask your BFF about the value of your home. Click here at The Edge Reference Price to find out.

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Dec 7, 2015. Subscribe here for your personal copy.

SHARE
RELATED POSTS
  1. Sime Darby Property concludes Dragon Deals campaign with RM352 mil worth of bookings
  2. Sime Darby Property recognised for environmental leadership with Fiabci Malaysia Property Award 2023 win
  3. Sime Darby Property’s XME Boulevard phase one fully taken up