UEM Sunrise is confident of the growth trend in the real estate sector

PETALING JAYA: Building on last year’s record in property transactions, UEM Sunrise Bhd (UEMS) is optimistic about ending the 2024 fiscal year (FY24) on a positive note.

Group CEO Sufian Abdullah (pictured) said among the many projects the group was involved in was Gerbang Nusajaya, where 921 residential and commercial units were successfully launched and completed with an occupancy rate of 99%.

He added that in fiscal 2024, the group plans to launch the remaining 253 units of the “Nest Series”, Aspira Lakehomes Phases 4, 5 and 6, as well as a new residential project comprising 901 units of the “Rise Series” known as Aspira Hills.

As he explained, approximately 16,000 houses are planned to be built, and 5,745 houses are to be put into use by 2030.

“The revised Gerbang Nusajaya development plan envisages the conversion of 361.2 acres of land from residential to industrial use.

“We expect the industrial component to account for more than 20% of Gerbang Nusajaya’s total gross development potential of RM45 billion,” he told StarBiz.

Additionally, UEMS has noticed a demand for residences relatively close to Singapore, especially among those working there.

Sufian said UEMS had constructed a road interchange worth 152.3 million ringgit that provides a direct link from Gerbang Nusajaya to the Tuas checkpoint on the Second Link Expressway.

“The construction was completed earlier this year and the process of handing over the facility to the authorities is currently underway. The opening of the facility is planned for the third quarter of 2024.

“Another important development we are currently building is the Gerbang Nusajaya Sales Village, a site where we will showcase our 15-year master plan,” he said.

The Senadi Hills project in Iskandar Puteri, Johor is also expected to strengthen the group’s position in the local property market.

Sufian said 88% of the Senadi Hills Phase 2A and 2B development has been sold so far, with easy access to Singapore being one of the key factors.

“The development is located along Lebuh Kota Iskandar and the Coastal Highway. It also offers a wealth of amenities and facilities, from schools, shopping malls to medical facilities and more,” he said.

Sufian added that this also supports the government’s plans to develop Forest City in Johor into a financial zone.

He added that the government’s offer will increase investment and economic activity in Johor.

“Therefore, UEMS will benefit from the spillover effects of increasing investment and employment opportunities in the region in the long term, focusing more on catalytic developments that will potentially shift towards the Malaysia-Singapore link-2 area, given its vast land resources and well-developed infrastructure.

“In addition, UEMS can actively participate in marketing and promotional activities to maintain constant interest and demand among its target market,” he added.

Sufian admitted that while the local real estate market presents both opportunities and challenges, observations point to some promising trends.

The data revealed that 399,008 properties with a total value of RM196 billion were sold on the market in 2023.

The number of units sold increased by 2.5% and their total value increased by 10% compared to 2022.

“We are generally optimistic and expect domestic demand to continue to support the market, but remain cautious as there are still many headwinds and risks,” he said.

According to Sufian, although inflation has declined somewhat, interest rates remain relatively high.

The industry continues to grapple with supply chain issues and labour shortages due to the prolonged effects of the Covid-19 pandemic, exacerbated by ongoing geopolitical tensions in Europe and the Middle East, ultimately resulting in higher cost inflation.

“Our upcoming launches will mainly be residential projects in Johor and Selangor. We are confident that our products, which have been carefully designed and tailored to the specific needs and requirements of the market, will provide the best value to our customers,” he said.

Meanwhile, research firm MIDF Research in its latest report continues to give a positive assessment of the real estate sector, noting an increase in loan applications, which indicates greater demand for real estate.

The report noted that the situation in this sector continued to improve, with the housing surplus falling further in the first quarter of this year (1Q24) to its lowest level since 2018.

“We are of the view that loan approvals should remain encouraging going forward, given the higher loan applications. This should translate into better new sales prospects for developers,” it said.

The research firm said in the latest reporting season that four of the six real estate companies it surveyed posted profits in line with expectations.

“Overall, 1Q24 earnings growth for real estate companies was positive, driven by higher appreciation of real estate projects as the labor shortage issue was resolved. Additionally, overall improvement in new property sales also supported earnings growth.

In addition, sales of new properties in Q1 2024 by real estate companies are largely in line with expectations, as interest in purchasing real estate remains high,” it noted.