Sunway City eyeing stronger overseas presence

Monday, April 19, 2010


Sunway City eyeing stronger overseas presence


PETALING JAYA: Sunway City Bhd (SunCity) expects earnings contribution from its offshore property development to increase to 30% by 2015 from less than 5% now.

To achieve this target, the company recently established a new international property development division headed by managing director Ngian Siew Siong while former chief operating officer Ho Hon Sang has been appointed managing director of the local property development division.

Ngian said SunCity was focusing on developing its presence in China, India and emerging markets such as Vietnam.

Ngian said China was one of the biggest foreign markets for SunCity and it was looking at opportunities in tier one and tier two cities.


MD Ngian Siew Siong (right) says SunCity is focused on developing its presence in China, India and emerging market. With him is Ho Hon Sang

“China, with its fast growing middle class and high urbanisation, will make up more than 50% of our total foreign earnings in the coming years,” he said.

SunCity has two projects in China. Its maiden project – the 17-acre Sunway Guanghao project in Jiangyin – is expected to be launched by June.

Comprising medium-end condominiums and specialty shops, the project has an estimated gross development value (GDV) of RM492mil.

The Sunway Guanghao project is a 39:26:35 joint venture between SunCity, SunwayMas Sdn Bhd and Shanghai Guanghao Real Estate Development Group Co Ltd.

Its second project is in Tianjin. SunCity will be signing a 60:40 joint venture agreement with Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd (SSTEC) to undertake the development of 110 acres within the Tianjin Eco-City project.

The eco-themed integrated project by SunCity will have an estimated GDV of RM5bil. It is expected to begin next year for completion in five years.

SSTEC, a 50:50 joint venture between a Chinese consortium led by Tianjin TEDA Investment Holding Co Ltd and a Singapore consortium led by Keppel Group, is involved in the development of the 7,500-acre Tianjin Eco-City.

In India, the company’s inaugural project is Sunway Opus Grand Residency located in Ameenpur, Hyderabad. Comprising more than 3,000 units of condominiums on 30 acres, it will be launched by year-end.

Prices are expected to start from RM200 per sq ft. The 50:50 joint venture with Opus Developers and Builders Pte Ltd has an expected GDV of RM1.2bil.

Ngian said SunCity had another development on a 14-acre site near Hyderabad. The RM380mil project comprises 1,500 condominiums priced from RM208 per sq ft.

Apart from these projects in China and India, the company is on the look-out for suitable land in Ho Chi Minh City. It also plans to undertake a joint-venture with Australand to develop 123 acres of industrial property near Sydney, worth about RM800mil.

Ho said SunCity had 10 ongoing projects in Malaysia and aimed to hit the RM1bil sales mark in the financial year ending Dec 31. It reported RM410mil sales last year.

The company will be launching RM1.47bil worth of projects this year including the RM250mil Sunway Rymba Hills, comprising 80 bungalows, in the Sunway Damansara township in Selangor.

Also in the pipeline is Sunway Velocity, an integrated development which consists of serviced apartments, shopping mall and retail space in Kuala Lumpur.

Earlier this month, SunCity proposed to dispose its entire interest in selected properties to a real estate investment trust to be set up by the company and listed on Bursa Malaysia.

The proposed properties include Sunway Pyramid Shopping Mall, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Menara Sunway, Sunway Carnival Mall, Sunway Hotel Seberang Jaya, Suncity Ipoh Hypermarket and Sunway Tower.

It said proceeds from the asset disposal would be used to acquire land bank, working capital, future business expansion and to repay SunCity’s borrowings.

For the 18-month period ended Dec 31, 2009, SunCity recorded a revenue of RM1.6bil and pre-tax profit of RM1.2bil.

Excluding a revaluation gain of RM804.9mil, adjustment for depreciation of RM10.6mil and upfront fees of RM10.5mil for banking facilities, the company’s pre-tax profit stood at RM428.4mil.

The revaluation gain was attributed to Sunway Pyramid Shopping Mall’s fair value gain of RM680.4mil, Sunway Carnival Mall’s RM58.5mil gain and 20 other investment properties’ gain of RM66mil.

By The Star