UEM Land ready for maiden foray into Sabah

Posted on 13 June 2013 by thesundaily.com
Eva Yeong

From left: UEM Land CFO Azhar Othman, chairman Tan Sri Dr Ahmad Tajuddin Ali and Wan Abdullah speaking at a press conference after the group's AGM yesterday. ADIB RAWI/theSun

PETALING JAYA (June 13, 2013): UEM Land Holdings Bhd, which is likely to surpass its target of RM3 billion in new property sales this year, is eyeing to start an urban development project in Kota Kinabalu, Sabah.

This foray into Sabah, if it materialises, underscores the group's strategy to expand its portfolio into new markets as it seeks to sustain its impressive growth rate.

"The Kota Kinabalu deal is on the table, but until and unless our partners are ready to sign on the dotted line, we cannot share details. Hopefully by year-end, we will have something," managing director and CEO Datuk Wan Abdullah Wan Ibrahim (pix) told reporters after the group's AGM yesterday.

A deal will mark the group's maiden entry into Sabah's bustling property market.

Wan Abdullah said the potential size of the undisclosed Kota Kinabalu project is between 10 acres and 30 acres.

Currently, the bulk of UEM Land projects is in Iskandar Malaysia, Johor. The group, however, has been busy scouting outside its home base and has identified Penang as a target.

"We're on an acquisition trail. We're still looking into new geographies, but we'll go through a stringent process to make sure we pick the right location for the right product," Wan Abdullah said.

The group is also looking at new opportunities overseas such as in India, Indonesia and Australia.

For the first three months of 2013 (Q1 2013), UEM Land, which is changing its name to UEM Sunrise Bhd pending approvals from the authorities, sold RM1.39 billion worth of new properties. A project in Canada contributed RM431 million in sales.

An estimated 59% of this new sales was contributed from its Nusajaya projects.

The group's unbilled sales jumped to RM3.55 billion in Q1 2013 from RM2.28 billion in Q4 2012.

"In order for us to achieve our growth targets, we certainly need to explore other locations. As you can see from our five-year compounded annual growth rate (sales 77%, revenue 40%), it is quite phenomenal. We want to continue this wave of growth and in order to achieve and sustain that kind of growth, we need to look at new geographies,'' Wan Abdullah said.

This year, the group expects to launch new residential and commercial properties with a total gross development value (GDV) of RM4 billion, which is expected to contribute towards its targeted sales of RM3 billion.

"To enhance our composition of revenue and bottomline, we need to enhance our recurring income. This will probably be more driven organically. We're not going to spend too much capital expenditure on major acquisition of assets for recurring income. We'd rather look at it as organic growth. We've got a few malls under construction and those will all fit into our recurring income portfolio," he said.

The group's current recurring income stands at 8% of total income and its total landbank is 10,600 acres.