Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Monday, April 27, 2009

SunCity keen to export project expertise

SUNWAY City Bhd (SunCity) is keen to export its expertise in development and investment projects to the potentially high-growth markets of China, India and Vietnam.

Managing director for property investment Ngeow Voon Yean said that besides having the right project plans, the other main challenge in the company’s overseas pursuit was identifying the right joint-venture partners.

“Having good local partners there will be a significant help for our success overseas as they know all the practices of the market and this will help to shorten our learning curve,” Ngeow told StarBiz.

Building up its overseas presence will enable SunCity to replicate its success as a Malaysian community master developer in the other countries in the region.

“These overseas projects will also contribute towards widening our earnings base. In the next five years, some 30% of SunCity’s revenue will be contributed by our overseas projects,” he added.

Ngeow said the global financial crisis had resulted in more favourable costs for new project start-ups as there were better deals around.

“We have been receiving many foreign visitors from the private sector and government-linked companies who are in Malaysia to explore joint-venture opportunities and to find out more about SunCity’s property projects,” he said.

SunCity has been engaged for two commercial projects – involving property designing and management services in China and as a consultant for a hotel development in Vietnam.

“We have the hardware and software to advise our clients on every aspect of a project’s development – from design planning to integration of facilities, marketing and property management. Given our expertise in theme park projects, there is also potential for this kind of management projects in those countries,” Ngeow said.

The contract for the Shenzen Holiday Plaza, a mixed development comprising retail, hotel and office suites, was inked two years ago. The project was opened to the public last September.

In March 2007, SunCity clinched the contract for the Chongqing project which comprised of retail space, hotels and residences.

It is also in the final stages to undertake a five-star hotel development in ChongSan, China.

In Vietnam, the company has been awarded the contract for a four-star city hotel that is under development by VIPTOUR group. SunCity is also working on securing other management contracts for another two or three hotels there.

In property development, SunCity has made inroads into China’s market through a joint venture with Sunway Holdings Bhd’s subsidiary, Sunway Mas Sdn Bhd, and Shanghai Guanghao Real Estate Development Group Co Ltd for a mixed high-rise development in Jiangyin New Harbour City in Jiangsu Province.

The resort-style project on 6.8ha will comprise 1,110 medium- to high-end condominiums with an estimated gross development value of RM473mil. Overseas projects, especially from India and China, will contribute 30% to property sales in the next five years.

Ngeow said locally, SunCity was looking for ways to expand the market for its hotels, shopping complexes and hospital facilities to improve its income streams.

“We have invested close to RM5bil in our property investment assets in the Klang Valley, Penang and Ipoh, that comprise office buildings, shopping complexes, university campuses, a medical college, hotels, theme park resorts and convention and exhibition centres.

“The management will ensure the necessary efforts are expended to optimise the operational efficiency and productivity to derive higher yields from all our assets and projects,” he added.

Under the company’s plans to unlock the value of its property investment, assets to the tune of RM3.1bil will be injected into a real estate investment trust (REIT) that was initially planned for a listing in the second half of last year. The listing had to be postponed when the local market succumbed to the impact of the global financial crisis.

Ngeow said the company would closely monitor the economic and market conditions before deciding on the listing plans for the REIT.

“We are not in a hurry to list the REIT as we can still depend on our strong rental income to ride out the financial crisis,” he added.

About 75% of SunCity’s operating profit of RM175mil for the first two quarters ended Dec 31, 2008, was from property investment assets and the balance from property development.

For the current calendar year, SunCity can look forward to total rental income of RM285mil, of which 70% will be from Sunway Pyramid Shopping Mall.

An analyst with a local brokerage said earnings from property investment were expected to remain resilient with the full occupancy of the 1.7 million sq ft net lettable space in Sunway Pyramid while rental rates remained firm.

“With a beta of 1.37, SunCity is a good proxy for a property sector recovery play. Our ‘buy’ call on SunCity is re-affirmed and it remains our top pick for the sector,” he added.

By The Star (by Angie Ng)

No comments: