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Wednesday, October 29, 2008

Sunrise to proceed with launch of 3 projects

Property developer Sunrise Bhd said it will go ahead with the launch of two projects in Malaysia and one in Canada next year, worth a combined RM2.5 billion, despite concerns over cooling property prices.

The projects were supposed to be launched from December this year, but were deferred by a few months due to weak market sentiment.

They comprise a RM970 million maiden project in Richmond, Canada, featuring five residential blocks with some commercial elements; 28 Mont' Kiara, a six-star condominium development worth around RM900 million; and Solaris Towers, featuring two office blocks worth about RM600 million.

"There is a financial crisis but we will get ready and launch (the projects) when the market is better. We will hold the launches for a while partly because we want costs to come down," executive deputy chairman Datuk Allan Lim Kim Huat said after the company's shareholders meeting in Kuala Lumpur yesterday.

Lim did not rule out selling Solaris Towers en bloc.

As for the Richmont project, which is a modification of Mont' Kiara but with smaller built-ups of 600 to 700 sq ft, Lim said Sunrise will grow from there as margins are similar to its projects in Malaysia.

As for lower margins due to higher cost of raw materials, Lim said the easing of commodity prices will stabilise earnings.

He hopes Sunrise's net profit and revenue will do better this year, given that it has RM1.36 billion of unbilled sales with 32 per cent gross margins that will be realised over the next 30 months.

For its fiscal year ended June 30 2008, it achieved a 119 per cent growth in net profit to RM147.8 million from 2007's RM67.5 million. Revenue was higher by 22.9 per cent to RM685.8 million.

Sunrise's unbilled sales are one of the highest among local listed property firms and will soon touch RM1.49 billion as it gears up to sell 19 completed bungalows worth RM130 million.

"We hope to improve our performance this year. The next two to three years will not be an issue for us as by 2010, we expect to launch the (mix development) project at Wisma Angkasa Raya (opposite Petronas Twin Towers) in Kuala Lumpur, which is in the planning stage now," Lim said.

While the global economic slowdown will put some downward pressure on property prices, Sunrise hopes to maintain the pricing of its products which are targeted at the medium to high-income groups.

Sunrise's remaining 32ha in Mont'Kiara, with an estimated gross development value of more than RM3 billion, will continue to be the cash cow for the company over the next six to eight years.

It also has 160ha in Mersing, Johor, 80ha in Seremban, Negri Sembilan and 22ha in Serdang, Selangor for future launches.

By New Straits Times (by Sharen Kaur)

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