The Edge Top Property Developers Awards 2013: No. 4 - UEM Sunrise Bhd
DATUK WAN ABDULLAH WAN IBRAHIM sits back in his chair and takes a breather as we sat down for the interview on a Thursday afternoon. As the managing director and CEO of UEM Sunrise Bhd, it is little moments like this that offer him the time off he craves.
“Like most years, we’ve been very busy dealing with a lot of things on the table,” he says.
UEM Sunrise has been occupied with a lot of activities, including the on-going development of Symphony Hills in Cyberjaya and Arcoris in Mont’Kiara, Kuala Lumpur. However, what is demanding a lot of Wan Abdullah’s attention is the integration of UEM Land Holdings Bhd and Sunrise Bhd.
“We have had a lot of engagements with our human resource team trying to unite the two brands under one common platform which we call ‘The Power of One’,” he says.
Getting the two “ships” together was quite a challenge, he says.
“We are very pleased with the result of the integration and based on the analysis and surveys we did, we have received positive feedback from the two companies,” he adds.
With the integration going well, Wan Abdullah is focusing on pushing his products onto the market.
|We are in line to achieve our targeted sales in 2013. This is driven mainly by our Nusajaya projects in Johor. We have seen excitement from the buying public, namely from Singapore and the locals from Johor. — Wan Abdullah|
“We are in line to achieve our targeted sales in 2013. This is driven mainly by our Nusajaya projects in Johor. We have seen excitement from the buying public, namely from Singapore and the locals from Johor. They are starting to buy into the concept that Nusajaya is offering with the completion of various universities, theme parks, coastal highways and a lot more catalytic projects under construction that are being promoted via the ‘World in One City’ concept.”
Below, he talks about what the year has been like for UEM Sunrise, the positive impact of the upcoming budget and his priorities in the coming months.
The Edge: Has the buying mood this year been optimistic?
Datuk Wan Abdullah Wan Ibrahim: I would say so. We announced our second quarter results with positive prospects. I think that will continue for the rest of the year.
What is your sales target for this year?
We put a sales target of RM3 billion. We are well within achieving that.
What is World in One City?
It includes various products like universities, theme parks, coastal highways and a lot more catalytic projects that are under construction. One of the projects that’s already in operation is Johor’s new administrative centre called Kota Iskandar. For the EduCity project, we have Newcastle University as well as Netherland Maritime Institute of Technology in operation. This EduCity concept is working out very well with six universities. Three are already in operation and three more will be completed within the next two years. That’s going to grow. Legoland has breached the targeted number of visitors within the first six months. So things are going very well.
What are some of your new catalytic projects?
Last year, we announced a few more catalytic projects. One is with Ascendas, a Singaporean company that focuses on industrial developments around the world. We have partnered with them to develop a 500-acre technology park. Unlike our previous developments that were just based on selling land, this time around, we will be building an industrial complex where people will come and lease from us. Tentatively, it’s called Nusajaya Tech Park.
Another catalytic project is the Motorsport City where we are in a joint venture with Fast Track from Singapore. We’ve hired track designer, Herman Tilke from Germany. He has been designing quite a number of Formula 1 tracks all over the world. In this 300-acre development, there will be an F1-compliant track, but it won’t be used to stage F1 races. We hope to have duty-free zones where people can import their super cars but as long as they leave it on the tracks, they can race their cars on the weekend. Of course, it will be open to the public as well.
|The FASTrack Motorsport City race track was designed by Herman Tilke from Germany||An artist’s impression of Arcoris, Mont’Kiara.|
How do you perceive the market?
In the central region, it’s been neutral — it’s not hot, neither is it cold. We are still getting good sales from the projects that we’ve launched in the central region … Arcoris and Verde are still coming up while MK22 will be launching very soon. Over in the south, the market has been really hot and it’s been a very good journey this year.
How does UEM Sunrise remain competitive?
Firstly, people have to distinguish us from the rest of the pack. An example is that in Nusajaya, we are undertaking three strategic initiatives which will separate us from the rest of the pack in Iskandar: Eco Nusajaya, Safe Nusajaya and the Smart and Connected Nusajaya.
The first two have been deployed and are already being practised but the third is still a work in progress. We are working with Telekom Malaysia and we hope to sign a collaboration with a telco company from Korea and Cisco from America.
These three concepts are living concepts which most liveable cities in the world have in their master plans. It’s sad to say that most developers in Malaysia are more interested in selling real estate, but we in UEM take pride in selling a lifestyle.
How do you brand your company?
We have a house of brands. We are building from the most expensive to the cheapest units … we’ve got residential, industrial and commercial. So we like to be known as a house of brands.
How has UEM Sunrise sustained its performance and what are its success factors?
We take our landbank to a new dimension and unlock the value of our assets.
As you know, Nusajaya is big and we landed a huge piece of landbank right from the beginning wherein our equity base is very big, so getting a reasonable return on equity wasn’t easy in the early part of our endeavors. We had to create new precincts and new concepts as we moved along. We were successful in Nusajaya because we catered to a variety of buyers. We have the cheapest product called Nusa Bayu, the mid market one called Nusa Idaman, we have a golf course development called Horizon Hills, we have an upmarket precinct called East Ledang and we’ve got waterfront homes called Puteri Harbour. So all this will add up into improving our bottom line and ensuring that our growth is sustainable.
Over and above the projects that I have mentioned, we are already coming up with a hefty pipeline of products. This will fuel our growth in the near term.
In Bangi, Selangor, we will launch Serene Heights and as I said, we are still looking for more land and we have the capacity to do more.
You mentioned earlier that one of the major challenges you had was the integration of UEM Land and Sunrise Bhd. What did UEM Sunrise do to make the integration a success?
Most importantly, you need to hear what the employees had to say. We listened to both sides and put our ears on the ground to understand where they’re coming from. So we heard, understood and formulated a set of strategies that will get the buy-in from all sides and not just from one side. So that has been the challenge.
What are the lessons taken after venturing into Iskandar?
We have to continue to be courageous. I can say that it was very difficult in the beginning when we had to go to Singapore and overseas to sell some of our products; nobody wanted to believe us. A lot of things that we have talked about in the last few years have achieved a certain level of completion and operation and it’s much easier to convince people now to invest in Iskandar. Although we’ve seen an increase in prices, I always tell people that this increase is merely coming from new formats, new standards and new quality finishes.
What are the lessons you have learnt in your career?
In property development, I always say it’s a big boy’s game. There’s no room for small players. If you look at property development in the west, it’s all dominated by big companies. For small companies, their scope is limited. As a bigger outfit, we are there for the long run and there lies the security for the buyers.
What’s next for UEM Sunrise?
We are interested to expand regionally but we are not in a hurry. We have identified a number of projects that we are evaluating and scrutinising. The due diligence that we have to go through is more than the typical due diligence that we have to undertake because of the fear of the unknown. We are in talks already with several parties and we are already on the table.
What would you like to see happen in the domestic economy?
I think the government has got it right in the sense that it is pushing public expenditure to a new level, creating more jobs and opportunities. This will fuel our economy and improve our gross domestic product and my industry will benefit out of an economy that is progressing.
With the softening of the ringgit, how has it affected your company?
The softening of the ringgit is certainly good for us because it makes our products so much cheaper, especially for our Singaporean neighbors. When they look at buying some of our bungalows in Nusajaya, it makes it so cheap. I guess if the ringgit devalues also, it’s not good in the long term. But I have faith in the government and the economy still has upside.
How is your project in Vancouver?
We have sold about 95% and the 5% is expected to be sold upon completion. Phase 1 is almost in the handover period and phase 2 is well under construction. We see that there is justification for another project in Vancouver.
We chose Vancouver because I think the position it’s in compared with the rest of the other cities in the world speaks for itself. It was the most livable city for a number of years so surely as an investor, we would like to go to cities where they care for the residents of the city. Hence, you can’t go wrong if the city has been voted the most liveable city in the world.
This article first appeared in The Edge Malaysia Weekly, on October 14, 2013.
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