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Strong demand for properties, especially landed homes, spurred the Malaysian property market after a slowdown in the aftermath of the 2008/09 global financial crisis. Local developers rode the “hot” market to achieve good sales at their launches. The current low interest rate environment continues to fuel sales despite renewed concerns over a deepening global economic crisis and fears of a recession.
Having ridden the crest of the recent property boom in the country, the top 10 developers in The Edge Top Property Developers Awards 2011 are now keeping a close eye on the global economy and tightening measures at home.
S P Setia Bhd, which was No 1 from 2005 to 2008 and in 2010, topped the chart again this year. It achieved its overall pole position by coming in first in all five qualitative attributes of product quality, innovation and creativity, value creation, image and expertise.
The developer of the 2,525-acre Setia Alam township and eco-themed Setia Eco Park in Shah Alam was third in the quantitative ranking behind Sime Darby Property Bhd and IOI Properties Bhd but its FY2010 ended Oct 31 performance was by no means less impressive — it posted record sales of RM2.31 billion, which was a 40% increase from FY2009’s sales.
S P Setia is in the midst of developing the 240-acre Setia City commercial precinct in Setia Alam, which includes the Setia City Mall, a joint venture with Lend Lease that is expected to open its doors next year. Its upcoming projects are Setia Eco Glades in Cyberjaya, KL Eco City in Bangsar and Setia Eco Cascadia in Johor. The developer also recently acquired a 1,011-acre parcel in Semenyih. In June this year, the group launched the first phase of Fulton Lane in Melbourne, Australia, on a 46,715 sq ft site it acquired in 2010. It is also in the midst of acquiring another site in Melbourne — a 0.9ha freehold plot for an apartment project with an estimated gross development value (GDV) of RM777.5 million.
S P Setia’s Vietnam projects, including EcoLakes at My Phuoc in the Binh Duong province, continue to see encouraging sales. As at press time, in a new development, S P Setia had received a notice of a takeover offer from Permodalan Nasional Bhd, a major shareholder of S P Setia.
Runner-up once again is Sime Darby Property, which leads in the quantitative ranking with the largest shareholders’ funds and highest turnover (RM1.812 billion) in FY2010. The property division of conglomerate Sime Darby Bhd that is known for its township developments such as Subang Jaya, Ara Damansara and Bukit Jelutong is developing high-end homes in its townships, including Seri Pilmoor in Ara Damansara and The Glades in Putra Heights. Future developments include the Bukit Jelutong Commercial Centre (BJCC) with an estimated GDV of RM3.2 billion. Meanwhile, the masterplan development Sime Darby Vision Valley, which will cover 1.2 million acres and stretch from Kuala Selangor in the north to Seremban and Port Dickson in the south, of which Sime Darby owns 126,000 acres will be developed in phases. Sime Darby Vision Valley has been classified as one of the 12 NKEAs (National Key Economic Areas) under the 10th Malaysia Plan.
Sunway City (SunCity), the developer of Sunway Integrated Resort City and Sunway City Ipoh, emerged third for the fourth consecutive year. It, however, moved up to second place in the qualitative ranking this year. Among its notable projects launched recently are the 22-acre integrated development Sunway Velocity in Cheras and Sunway Rymba Hills — a gated and guarded residential enclave in Sunway Damansara. Upcoming is the 25-storey The Pinnacle office tower in Bandar Sunway. In China, SunCity is developing 102 acres of the 7,400-acre Sino-Singapore Tianjin Eco-City project.
To streamline the group’s property and construction businesses and to achieve synergy within Sunway Group, a merger exercise was initiated between Sunway City and Sunway Holdings Bhd and on Aug 23, the merged entity Sunway Bhd was listed on the Main Market of Bursa Malaysia. Sunway Bhd has total assets of over RM7 billion and a landbank of close to 2,200 acres with a potential GDV of about RM23 billion.
In fourth place is IGB Corp Bhd, the developer of Mid Valley City. As in previous years, property investment continues to be the main contributor to the group’s revenue as occupancy at Mid Valley Megamall has reached 99.86% while that at The Gardens Mall is 98%. In FY2010, the group’s property investment and management division contributed RM425.8 million to revenue, the hotel division RM202.5 million and the property development division RM71.3 million.
The developer of Sierramas in Sungai Buloh continues to enjoy good take-ups for its launches there while it is preparing to develop the last phase of Mid Valley City. IGB is also expanding its St Giles and Cititel hotel brands.
I & P Group Sdn Bhd came in fifth, rising two notches from last year. A wholly-owned subsidiary of Permodalan Nasional Bhd (PNB), I & P Group was formed two years ago as a result of a rationalisation exercise of Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd.
Its Bandar Kinrara township in Puchong won The Edge-PEPS Value Creation Award 2011 in the residential category, repeating its win last year. The developer is working on various phases of development in its 12 townships, including Bandar Baru Sri Petaling, TemasyaGlenmarie, Alam Impian in the Klang Valley and Taman Rinting and Taman Perling in Johor. The group has a total landbank of about 2,200ha in the Klang Valley and Johor.
IOI Properties Bhd retained its sixth position this year. Although it dropped to 16th place in the qualitative ranking, its financials were impressive. It was runner-up to Sime Darby and above S P Setia in the quantitative ranking. FY2010 was a good year for the property division of plantation giant IOI Corp as its operating profit of RM602.9 million was 29% higher than in the previous year. Revenue exceeded RM1 billion due to strong sales and higher pricing.
Following encouraging sales for its Singapore projects, namely Seascape condo in Sentosa Cove and Cityscape @ Mergui Road, IOI Properties plans to launch a third project there in FY2012. The group is also drawing up plans for a 7.7-acre site in Xiamen, Fujian province, in China. The developer of the 930-acre Bandar Puteri Puchong and the 800-acre IOI Resort City in Putrajaya, has begun work on one of its most iconic projects to date — the IOI City Development in IOI Resort City that comprises a two million sq ft shopping mall, office blocks, a hotel and serviced residences.
Mah Sing Group Bhd, which debuted at ninth place last year, moved up two rungs this year followed by Sunrise Bhd in eighth place.
Mah Sing did remarkably well in its qualitative standing, coming in fourth. IJM Land was third while Sunrise and Bandar Raya Developments Bhd came in fifth and eighth respectively in the qualitative ranking.
In FY2010, Mah Sing breached the RM1 billion sales mark, registering RM1.5 billion. The developer, which is known for its quick turnaround strategies, was on a land-buying spree in 2010, making 10 acquisitions in the year for projects with an estimated GDV of RM4 billion. It acquired another site early this year in Iskandar Malaysia, Johor. It has come up with a mixed portfolio of products in recent times in the Klang Valley, Penang Island and Johor Baru. Among notable launches are Garden Residence in Cyberjaya, M-Suites @ Jalan Ampang, Residence@Southbay in Batu Maung, Penang, i-Parc @ Bukit Jelutong and Star Avenue@D’sara.
In eighth position is Sunrise Bhd. Although it voluntarily delisted on Jan 21 this year and is now part of UEM Land Holdings Bhd following a corporate exercise, Sunrise released an annual report for FY2010 while still listed in the property sector. Hence, it was automatically considered for the awards this year.
Sunrise’s FY2010 revenue was 26% lower at RM590.7 million while unbilled sales were down to RM861 million. New sales slowed due to planning and approval processes, market conditions and the global financial crisis. Pre-tax profit fell by 12% or RM24.9 million.
Its latest unbilled sales for 28 Mont’Kiara (MK28), Quintet in Richmond, Vancouver, and Summer Suites (formerly Menara Solaris) in Jalan Sultan Ismail, Kuala Lumpur, are said to be around RM1.2 billion. Slated for launch next are Arcoris (MK20) and MK22 in Mont’Kiara while the mixed-use development on the Wisma Angkasa Raya site in KLCC and in Bukit Jelutong are in the works.
With Sunrise now a part of UEM Land, which is the property arm of UEM Group which in turn is wholly owned by Khazanah Nasional Bhd, one can expect a lot more from both developers
as they tap each other’s strengths.
IJM Corp Bhd’s listed property arm IJM Land Bhd — the result of a merger between RB Land and IJM Properties Sdn Bhd — moved up a notch to ninth position this year. IJM Land is known for developing a mixed variety of products in various locations throughout the country — from townships such as Seremban 2 to luxury high-rises such as Ampersand @ Kia Peng to iconic developments such as The Light waterfront development in Penang. It emerged third in the qualitative ranking.
In FY2010 ended March 31, the developer achieved record revenue of RM1.1 billion (2009: RM671.01 million) and profit before tax of RM148.92 million (2009: RM68.30 million). The improved performance was due in part to the unprecedented property sales of RM1.26 billion recorded during the year.
Bringing up the rear is Bandar Raya Developments Bhd (BRDB), which made the headlines recently for its decision to draft its prime assets, including Bangsar Shopping Centre, Menara BRDB, CapSquare Retail Centre in Kuala Lumpur and Permas Jusco Mall in Johor Baru.
Besides these assets, BRDB is known for its luxury lifestyle developments, including One Menerung in Bangsar and the Foster & Partners-designed Troika in Kuala Lumpur. It dropped significantly in the quantitative ranking from seventh place last year to 22nd this year. Group revenue in FY2010 declined 31% y-o-y to RM627.4 million while revenue from the property division dropped 37% y-o-y to RM453.2 million. Group profit before tax was RM151.1 million for the year under review, 3% less than in FY2009. BRDB recently launched condominium project Verdana at Kiara North in Dutamas, setting a new standard in the location for design, quality and pricing. It is gearing up to launch Taman Duta in Kuala Lumpur, which will feature ultra-luxurious low-rises on 12 acres of freehold land with a GDV of about RM1 billion.
Worth noting in the qualitative ranking is unlisted developer Al-Batha Bukit Kiara Holdings Sdn Bhd, which is more popularly known as Bukit Kiara Properties. It submitted an entry for the awards for the first time this year and came in at ninth place. Bukit Kiara Properties was founded by group chairman Datuk Alan Tong and has carved a name for itself as an innovative niche developer with projects such as Hijauan Kiara and Verve Suites, both in Mont’Kiara. It made an impressive debut, adjudged No 15 overall.
Another unlisted developer that just missed out on appearing on the overall Top 10 list by coming in at 11th place is the developer of the Bandar Utama township — Bandar Utama City Corp Sdn Bhd. 1 First Avenue, a green office building developed by the group in the township won this year’s The Edge-PAM Green Excellence Award.
Quality first
Since last year, The Edge Top Property Developers Awards has come under the banner of The Edge Property Excellence Awards which encompasses The Edge-PEPS Value Creation Excellence Award and The Edge-PAM Green Excellence Award.
The The Edge Top Property Developers Awards ranking is based on a developer’s FY2010 results. Data on the quantitative attributes of listed companies in the property sector of Bursa Malaysia is derived from published sources compiled by Interactive Data Systems Sdn Bhd while unlisted companies are required to submit copies of signed audited accounts. The four quantitative attributes are shareholders’ funds, group pre-tax profit, revenue and net gearing. Net gearing is defined as the total of long and short-term loans minus cash divided by shareholders’ funds.
Since last year, greater weightage has been given to qualitative attributes (65% compared with 50% previously), namely product quality, innovation and creativity, value creation for buyers, image and expertise. For this year, these were judged by industry experts and veteran property developers Datuk Alan Tong, Datuk Richard Fong, Datuk Jeffery Ng, Datuk Teo Chiang Kok, Kumar Tharmalingam, Datuk Eddy Chen and The Edge chief marketing officer Au Foong Yee.
The respective judges abstained from the deliberation and judging of companies in which they have direct or indirect interests. They are Fong (for Glomac Bhd where he is group executive vice-chairman), Ng for Sunway City (he is CEO of Sunway REIT Management Sdn Bhd), Chen for MKH Bhd (he is the managing director,) Tong for Bukit Kiara Properties (he is the chairman), Teo for Bandar Utama City Corp (he is a director), Kumar for Sime Darby Property (he is a director) and Au for Sunrise (the chairman of The Edge is also a director of Sunrise Bhd). The results were audited by Deloitte Malaysia.
AWARDS Methodology
The Edge Top Property Developers Awards is an exercise to rank Malaysia’s top property players for their quantitative and qualitative attributes — from the consumer’s perspective. The Edge publishes the ranking and presents the awards annually.
Introduced in 2003, the awards are based on the conviction that a developer’s quantitative attributes alone are not sufficient to earn it the title of most outstanding player. A property developer is not judged solely on how profitable the company is or how many homes it builds and sells each year, but also its qualitative attributes.
All companies listed on Bursa Malaysia’s property sector are automatically considered for the awards, while non-listed property developers that are interested to be ranked need to submit an entry.
Advertisements calling for entries from privately owned companies and the property development arms of companies not listed on Bursa’s property sector were published in The Edge.
Quantitative attributes
Four quantitative attributes, namely shareholders’ funds, revenue, profit before tax and cash/net gearing, make up 35% of the overall score.
The quantitative data of listed developers are based on data provided by Interactive Data Systems Sdn Bhd (IDS) or are extracted from documents submitted to Bursa. All financial data considered for the 2011 awards are for FY2010.
The quantitative data for non-listed property developers are based on the signed audited financial statements submitted as part of the entry requirements for the awards. In the case where signed audited financial statements are not available, data certified by the company’s external auditors are used.
Qualitative attributes
Five qualitative attributes — product quality (includes service, finish, timeliness), innovation and creativity (includes product and marketing), value creation for buyers (capital appreciation), image or market perception (includes credibility and effectiveness) and expertise (includes management and experience) — make up 65% of the overall score.
Points awarded
A maximum of 10 points are awarded for each qualitative and quantitative attribute. Points for quantitative attributes are given based on the financial data of each company.
Points for qualitative attributes are awarded by a panel of seven, comprising industry veterans and experts. The respective judges abstained from judging companies in which they have direct or indirect interest. They were Datuk Richard Fong for Glomac Bhd, Datuk Jeffrey Ng for Sunway City Bhd, Datuk Eddy Chen for MKH Bhd, Datuk Alan Tong for Al-Batha Bukit Kiara Holdings, Datuk Teo Chiang Kok for Bandar Utama City Corp Sdn Bhd, Kumar Tharmalingam for Sime Darby Property Bhd and Au Foong Yee for Sunrise Bhd (the chairman of The Edge is also a director of Sunrise Bhd).
Results audited
The results from the tabulation of points for both quantitative and qualitative attributes were audited by Deloitte Malaysia.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 878, Oct 3-9, 2011
