Tuesday 16 Jul 2024
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This article first appeared in City & Country, The Edge Malaysia Weekly on December 20, 2021 - December 26, 2021

No. 7 | UEM Sunrise Bhd
  2021 2020
Overall 7 6
Quantitative 12 4
Qualitative 7 4

As we settle into our seats in his bright office in Mont’Kiara, UEM Sunrise Bhd CEO Sufian Abdullah exuberantly paints a picture of his journey since he took over the helm of the company earlier this year. “One might say I came in the heat of things. The first six months have been a housekeeping act. We are setting up for recovery and relooking our existing strategies. We also reviewed some of the technical decisions we made and injected their relevance into the market,” he says.

With the fresh approach, UEM Sunrise continues to strengthen its position and is once again ranked in the Top 10 of the Top Property Developers Awards at The Edge Malaysia Property Excellence Awards 2021. Known for its signature townships and developments in Mont’Kiara and Dutamas, the developer has also embarked on a highly anticipated development in Kepong called Kiara Bay. 

According to Sufian, UEM Sunrise will be focusing on a more attainable and diversified product rollout. “There is good demand for residential properties in the RM300,000 to RM600,000 price range,” he points out.

“The Covid-19 pandemic has been a good opportunity for us to go through an organisational reset, both in terms of strategic direction and trying to chart a slightly different trajectory,” he adds. 

The latter entails new products, engaging with a new demographic and bringing a unique value proposition, says Sufian. “For example, if you look at our rollout plan for the next three years, it is mostly in the attainable price class. It also gives us an opportunity to test out a couple of things with regard to our cost structure.” 

The following are excerpts from the conversation with Sufian.

City & Country: Please review the group’s performance and financial statistics over the last 12 months.

Sufian Abdullah: If you take a look at our profit and loss report, it reflects that we may be missing something. On that note, we would like to bring the focus back to product creation and product development. We have created a division that looks into research and development within the organisation.

Operationally, even until 2H2021, we exceeded our sales projections. Nonetheless, we need to address our capital structure.

In the next 12 to 18 months, I foresee UEM Sunrise going into some kind of triage position — we just want to treat the wounds, stop the bleeding and work out matters that have not been doing so well. Taking into account any additional growth plans, we needed to stabilise what we already have.

How does UEM Sunrise continue to set a benchmark, and to distinguish itself from its peers?

There is a degree of professionalism within UEM Sunrise to deliver quality products, treat the fundamental issues with regard to capital structure and manage our cash flow balance sheet.

In recent months, we have reorganised our product development team. Within that division is a specific unit that will look at things like urban design. We feel this is [what we need to focus on].

We also had a design workshop, with a bunch of our guys working on our project sites. It’s a bit of an adjustment for the organisation, because I also sit in on technical committee meetings.

We brought in a number of new people to add a fresh dimension to how we look at things. It is a learning curve for everybody — in terms of how we look at our product and what matters most to the customer. I feel that we were probably too comfortable with the fact that we had success in the past [which may hinder progressive change].

What were the challenges encountered during the review period? What are the group’s plans to overcome them?

The greatest challenge is that we are at a time when the market is perceived to be soft. In actuality, it is perceived to be uncertain. If you ask 10 different developers what their outlook is for next year, at least half will be optimistic.

At UEM Sunrise, we know where our strengths lie. We understand our deficiencies, weaknesses and what we need to do to correct them. That in itself is possibly our biggest challenge because it requires an organisational and behavioural change to a certain degree.

We have systemised a number of things, especially in terms of shared accountability. UEM Sunrise has always been a company that values our expertise in construction and project management, and there’s no doubt in our success.

We have a product development team; an environmental, sustainability team; marketing; market research — and I believe they should be converged, with all of them having equity and input. We are in the process of trying to change the mindset of the organisation.

Previously, you shared the company’s ‘modest launch plan’ — to feature more affordable and attainable products in the central and southern region this year. How has this fared so far?

The projects that fall under our modest launch plan are currently faring well and we are about to reach our sales target of RM1.2 billion (in central and southern regions combined). 

The group will be focusing on a more attainable and diversified product rollout. There is good demand for residential properties in the RM300,000 to RM600,000 price range. The pandemic has accelerated our online platforms and for certain product categories, our customers are happy to look at a video or live broadcasts from our sales representatives, especially the younger homebuyers.

In addition, we plan to restructure some of our joint-venture partnerships, especially in the southern region. We are being really pragmatic, and [want] to see value extraction from our existing resources.

Which product segment will the group focus on in the coming financial year?

It is now an opportunity for us to test out certain products that would appeal more to individuals with high real affordability, such as young, fresh graduates who may or may not see sense in buying property. We would like to explore the kind of topologies that work for that income group.

As at June 2021, UEM Sunrise had a total land bank of 634.2 acres with a gross development value (GDV) of RM30.2 billion in the central region, including Seremban, and 8,627 acres with a GDV of RM77.4 billion in the southern region. Is the group planning to acquire more land?

In 1Q2022, we intend to explore and unleash the value of our recently acquired 10-acre Dutch Lady parcel in Section 13, Petaling Jaya. The area has evolved over time and has been home to multigenerational communities since the 1950s. So, we plan to honour that and do more engagements, as well as design workshops, internally. We also plan to engage with the local authorities in this market by coming up with the actual design scheme for it.

Moving forward, what are UEM Sunrise’s strategies for branding and growth?

We have established a certain discipline in terms of the process that will allow us to achieve our goals [in terms of branding and growth]. How much of that can be achieved and is tangible? We intend to work out internally to improve our ability every time we design a product. Our procurement strategy, with sustainability, is always in mind.

Property [development] is admittedly unsustainable; it is common practice in the construction industry to allocate the waste up front. So, we would have to cut, trim and distinguish the materials [to be more sustainable].

What are the group’s sustainability targets, and why are they important?

We have been incorporating environmentally friendly features into our products since 2010. Our sustainability strategies are designed to support the 12th Malaysia Plan in developing a prosperous, inclusive and sustainable Malaysia.

Our green buildings include Aspira Gardens in Iskandar Puteri, which is designed to reduce solar heat gain and benefit from prevailing winds, reducing the need for air conditioning. The roofs are designed for future installation of solar panels by homeowners.

Kiara Bay in Kepong has multiple electric-vehicle (EV) charging stations while Aurora Melbourne Central in Australia has 784 bicycle spaces as well as shower and changing facilities. KAIA Heights in Seri Kembangan is the first UEM Sunrise product that embodies its sustainability principles and is GreenRE silver-certified.

On the environment front, UEM Sunrise has incorporated sustainability into our product DNA, which oversees vital elements such as energy and water efficiency, environmental protection and indoor environmental quality. This is aligned with the UN Sustainable Development Goal (UN SDG) 11: to make cities and human settlements inclusive, safe, resilient and sustainable.

On the social pillar, UEM Sunrise initiated the BukuHub programme, a mini library or community reading space that provides easy access to books, which is in line with the Highly Immersive Programme (HIP) conducted at several of our PINTAR adopted schools to improve English literacy among children. This is aligned with UN SDG 10: to reduce inequality within and among countries.

As for corporate governance, we have implemented anti-corruption practices and organised engagements in the workplace to raise awareness of the need to combat corruption. This is aligned with UN SDG 16: to substantially reduce corruption and bribery and develop effective accountability and transparency.

We plan to operationalise sustainability throughout our value chain, offering greater value to our shareholders and customers while working towards developing greener buildings and including sustainable features in our building designs.

Our recent win at the Sustainable Business Awards and the Asean Corporate Governance Awards 2020 reaffirms the group’s position in sustainable development.

Please share updates on ongoing and upcoming projects locally and internationally.

In FY2022, we plan to roll out new phases of our existing new projects. We have Residensi AVA, which has a GDV of RM651.8 million in Kiara Bay, Kepong. Kiara Bay is a 73-acre master plan that was launched in November 2019. Due to be completed by 2Q2024, Residensi AVA comprises two 41-storey towers with 870 units and offers built-ups of 813 to 1,285 sq ft, with prices starting from RM567,800.

Allevia is a freehold, high-rise residential development in affluent Mont’Kiara, with a GDV of RM545.9 million. Launched at end-2020, the units are priced from RM1.54 million (RM907 psf). Due to be completed in 1Q2025, the 43- and 38-storey towers will offer 294 units, with built-ups of 1,703 to 2,634 sq ft.

KAIA Heights is located on top of a hill in the vibrant and mature Equine Park. The township has a GDV of RM351 million, with unit prices starting from RM567,800. Details of the second phase will be unveiled soon.

Aspira ParkHomes in Iskandar Puteri capitalises on UEM Sunrise’s vision of building happy communities in this freehold gated and guarded development. Rooted to an urban green living concept, Aspira ParkHomes is replete with urban farms, herb gardens, verdant parks and community facilities. 

Sprawling across a 43.12-acre tract, the master plan development has a GDV of RM306.5 million. The 2-storey terraced houses have an estimated price of RM560,150 to RM1.02 million.

Serene Heights is a township built on 448 acres of freehold land in Bangi. Its central location is between Kuala Lumpur, Putrajaya and Cyberjaya and is close to amenities, leisure parks and golf and country clubs. In FY2021, we unveiled a series of cluster homes there, specifically Verna Garden Clusters, Verna Twin Villas, Verna Park Terrace, Verna Linked Homes and Verna Lake Villas, which have all performed well.

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