City&Country: UMLand strengthens presence in Johor

United Malayan Land Bhd (UMLand) is looking to capitalise on its solid track record, experience and presence in Nusajaya, Johor, since the 1990s to further grow and strengthen the group’s position in the emerging property market hot spot of Iskandar Malaysia.

It recently acquired the entire equity interest in Tentu Teguh Sdn Bhd (TTSB) — including its 333 acres of freehold land in the eastern corridor of Iskandar Malaysia, which will be for a mixed-use development — for RM10.9 million. The developer also reveals that it recently bought two more plots for niche developments in Iskandar Malaysia.

The aggressive land buying in Johor does not stop there. In fact, Zulkifly Garib, UMLand’s director of operations, says the group is in the final stage of negotiations on buying two sites in Pulai for joint-venture developments as well as another two smaller plots in Iskandar Malaysia.

Should the deals go through, UMLand will be able to add more than 600 acres to its already substantial undeveloped landbank of 2,200 acres nationwide, including more than 1,600 acres in Johor.

The group is not the only property player to forge deals in Iskandar Malaysia recently. Several weeks ago, Sunway Bhd teamed up with Khazanah Nasional Bhd to acquire two plots of a total 691 acres in Medini for RM745 million.

Developers that have also made their way south and established a presence or are making their presence felt include S P Setia Bhd, Mah Sing Group Bhd, Eastern & Oriental Bhd (E&O), IOI Properties Bhd, Mulpha International Bhd, KSL Holdings Bhd, Danga Bay Holdings Sdn Bhd and Dijaya Group.

“The opportunities in Johor are tremendous. With the catalyst projects in the area progressing smoothly and steadily, we want to continue and increase our involvement in Iskandar Malaysia,” Zulkifly tells City & Country in a recent interview.

UMLand has grown since its incorporation in 1961 and listing on Bursa Malaysia in 1965, when it was a mid-range developer targeting owner-occupiers. From mainly township developments, such as Bandar Seri Alam and Bandar Seri Austin in Johor, it has since developed a few niche projects.

“We have progressed to niche developments in Kuala Lumpur, such as Seri Bukit Ceylon in Jalan Bukit Ceylon, Suasana Sentral Loft at KL Sentral and Suasana Bangsar. Our strategy and target market segment have evolved to include a mix of owner-buyers, upgraders and speculators.

“With the launch of the leaseback serviced apartments project Somerset Puteri Harbour [in Iskandar Malaysia], we will be introducing another market segment to the mix — pure investor buyers,” Zulkifly says.

He adds though that despite the successful transition, township development will continue to be the bread and butter of the property group. “Township and urban niche residential developments have always been UMLand’s core business. Although niche developments have boosted the group significantly in terms of profit, the risk in this sort of development is high,” he points out.

New projects
UMLand will have its hands full with the launches lined up for later this year. The lanches at its township developments in Bandar Seri Alam, Bandar Seri Austin and Bandar Seri Putra in Bangi, Selangor will have a total gross development value of RM500 million while that of its upcoming niche developments will be a whopping RM2.7 billion.

The upcoming township launches are Ametrine in Taman Seri Austin (GDV: RM32 million), Sapphire in Bandar Seri Alam (GDV: RM57 million) and homes in Bandar Seri Putra (GDV: 57 mil). Ametrine is an upscale residential 7.09-acre enclave comprising bungalows that are 3,150 to 3,172 sq ft in size and priced from RM1 million. Sapphire, meanwhile, is a gated and guarded precinct comprising 3-storey link houses and 2-storey semi-detached homes.

Closer to the Klang Valley, the developer plans to launch a series of 2-storey and 3-storey terraced homes as well as 2-storey semidees in its Bandar Seri Putra township in Bangi.The gated and guarded residential enclave will span 10.4 acres. The size of the units is from 1,887 to 2,659
sq ft while the prices have yet to be confirmed.

UMLand had launched the second series of Legundi Residensi in Bandar Seri Putra last November. The low-density residential development has a GDV of RM68 million and will cover 8.44 acres.
The project houses only 60-plus units of 2-storey bungalows (3,506 sq ft; prices starting from RM1.39 million), 2-storey semidees (3,020 sq ft; prices from RM799,000) and 2-storey cluster homes (2,659 sq ft; prices from RM708,000).

While the group’s attention will centre around residential developments, the group’s has several upcoming niche projects- their first leaseback development, Somerset Puteri Harbour (GDV: RM220 million) — will be launched next month.

Somerset Puteri Harbour is a low-rise leaseback boutique development comprising retail components with a gross built-up area of 575,000 sq ft. Unit sizes range from 762 to 3,680
sq ft while prices start from RM80 psf. Upon completion in mid-2013, the serviced residences will be managed by The Ascott Ltd.

UMLand is also expediting the design for a mixed commercial development comprising of a hotel, serviced apartments and retail lots in Jalan Wong Ah Fook in Johor Baru. Covering six acres, this upcoming project in Iskandar Malaysia is another JV with UEM Land Holdings Bhd and will have a GDV of RM305 million.

In Jalan Mayang in Kuala Lumpur, the group plans to launch a 4.3-acre serviced apartment development with a GDV of RM2.2 billion.

UMLand also hopes to sell the remaining 100-plus units at Suasana Bangsar. The project comprises 190 high-end condos, with sizes ranging from 1,100 to 4,800 sq ft. The earlier units were mainly sold by word of mouth. Prices start from RM746 psf.

Zulkifly is confident that sales for their Johor projects, will grow over the next three to four months as the take-up rate in Iskandar Malaysia over the last two years has increased substantially. “Most of the interested parties in our earlier projects were locals, but recently there have been foreigners registering their interest in our upcoming projects, especially Singaporeans.”

Zulkifly attributes the growing interest to the first delivery and commencement of other catalyst projects in Iskandar Malaysia, such as the Johor Premium Outlets, the Newcastle University Medicine Malaysia and Legoland (opening in 3Q2012).

To tap the interest of investors in the city-state, the group had a promotion in Marina Bay Sands, Singapore, on upcoming launches of Somerset Puteri Harbour’s serviced apartments and Ametrine’s bungalows.

“About 200 applicants have registered their interest in the 168 units in Somerset Puteri Harbour,” Zulkifly says, adding that following the better-than-expected response, UMLand will introduce more of its products to the Singapore market Zulkifly says there has been a 15% take-up rate since the launch. Following the second series of Legundi, the group will undertake the development of apartments (in 3Q2012), shopoffices and bungalows in the township.

On the drawing board
With such a large landbank, the group is in for a hectic year in terms of development planning. UMLand hopes to finalise the plans for its recently acquired Johor landbank by year-end, says Zulkifly. “Hopefully, these projects will fuel UMLand’s growth in the upcoming years. We will definitely throw affordable homes into the mix of our future developments and move into greener and more sustainable townships complete with eco features, parks and amenities.”

UMLand has plans to develop a 200-acre parcel in Bandar Seri Putra in Bangi into a commercial and industrial hub. Also in the pipeline are several niche developments, two of which will be JV projects. Zulkifly says the group is working closely with Bolton Bhd at the moment and is looking again at its plans for the 4.3-acre parcel in Jalan Mayang near the Kuala Lumpur City Centre.

“We are planning high-end products in Seri Austin and Bandar Seri Putra because we believe the market is ready for more upscale homes. After taking a short break to replan Seri Alam, we will be launching more 2-storey terraced homes and will have third-party involvement in the townships, such as the recent joint venture with Singapore’s Raffles Campus to build Excelsior International School,” he adds.

On potential land acquisitions beyond Johor and the Klang Valley, Zulkifly says the group is especially interested in Penang, but does not rule out acquiring land in other parts of the country should a good opportunity present itself.

Beyond 2012
In 3Q2011, UMLand posted RM246.7 million in revenue and declared a dividend of 2.5 sen per share. The group had recorded revenue of RM316.92 million in the previous corresponding period, according to its 2010 annual report.

Commenting on this, Zulkifly says he is positive about the group’s performance and that with the exception of the financial downturn in 2008, which saw the group holding back many of its launches, the profits of the company have been steadily increasing over the years.

Zulkifly says expectations of developers have increased in tandem with the prices over the years owing to the sheer number of products available in the market as well as the increasing number of property players.

“People now are so spoilt for choice that as a developer we have to continue to keep up with the trends and public expectation of our products,” he says, adding that the scenario will continue to play out in the coming years.

So, how will UMLand cope with the increasingly demanding customers while dealing with rising land, material and labour costs?

“We have always delivered our properties on time and will continue to strive to maintain our track record. Of course, that isn’t enough. We want to continue to create and amplify the value and quality of our developments so that they provide good capital appreciation for our buyers,” Zulkifly says.

He anticipates the property market to be less robust than in the past few years and believes there will neither be a substantial rise nor fall in property prices. Overall, he remains positive about the level of public interest in UMLand’s projects.

How well the market performs this year will depend on how the economic situation is handled by the regulatory bodies and banking sector, Zulkifly says.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 895, Jan 30-Feb 5, 2012