New niche projects to rev up sales for UM Land

New niche projects to rev up sales for UM Land
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By Yeow Pooi Ling

Anthony Yap
KUALA LUMPUR: United Malayan Land Bhd (UM Land) sees future sales driven by its three new niche projects in the Klang Valley with a combined gross development value of over RM1bil, according to group chief executive officer Anthony Yap.

The three developments are located in Bangsar, Persiaran Raja Chulan and Jalan Mayang.

UM Land hoped to launch the Bangsar and Raja Chulan projects by year-end and the Mayang project next year, Yap told StarBiz.

For year ended Dec 31, 2006 (FY06), revenue grew over 90% to RM417mil from RM215mil in FY05.

For the new developments, UM Land would incorporate a safety design feature to comply with the US Zone 1 earthquake structural specifications, Yap said. The feature was first implemented at Suasana Sentral Loft.

Its current projects include three townships - Bandar Seri Alam and Taman Seri Austin (both in Johor Baru) and Bandar Seri Putra (in Bangi) - and niche projects Suasana Sentral Loft and Seri Bukit Ceylon.

As at end-March, unbilled sales amounted to some RM123mil. The take-up rate for its townships range from 68% to 94% while niche developments at Suasana Sentral Loft and Seri Bukit Ceylon could be considered fully sold as only two of 846 units were yet to be taken up, Yap said.

“We're uniquely placed as townships and niche developments give us a more balanced earnings,” he said.

Yap noted that townships took time to mature and capital would be tied up in the land. To unlock value, UM Land is working with other developers to expedite the growth of the townships. For example, it sold parcels of industrial land at Bandar Seri Alam.

“These developers are our non-competitors. It's a win-win situation for our partners and us,” Yap said.

The two Johor Baru townships, on undeveloped land totalling 2,000 acres, are located within the Iskandar Development Region.

Bandar Seri Alam would benefit directly from the improvements to the Pasir Gudang Highway and the East West Link, which would relieve the current congestion and reduce both the distance and travelling time from central Johor Baru, he added.

The police force had also chosen Bandar Seri Alam to house the Eastern District Regional Headquarters for Johor, Yap added.

Meanwhile, the magnetic train project from central Johor Baru to Tebrau City would pass through Taman Seri Austin, hence providing alternative mode of transport, he said.

Bandar Seri Putra in Bangi, on the other hand, is experiencing the ripple effects from rising property prices.

“For the price of a terrace house (in the Klang Valley) you can buy a semi-detached house in Bangi,” he said, adding that traffic congestion at the Sungai Besi exit had now eased with the opening of the SMART tunnel.

UM Land intends to focus on Kuala Lumpur, the Klang Valley and Johor as there are still ample opportunities.

There were areas seen as having a “silver lining” as they stood to benefit from the spill-over effects but had yet to realise their full potential, Yap said.

On the pricing of landbank, he said: “It's not important what the land price is. More important is how much you can sell it for.”

The Government's initiative to expedite the delivery system for the property sector would bode well for the industry, he said.

“Shorter delivery time means we can be spot-on in our expectations as the market can change within two to three years,” he said, adding that the recent pay hike for civil servants would be positive to the economy and the property sector.

While UM Land had yet to have a dividend policy, it strove to pay a dividend of at least 10 sen per share, Yap said. The company paid out 9 sen per share in the last financial year compared with 7.5 sen in FY05 and FY04.