UEM: Quota on foreign threshold of property purchase is necessary

According to the firm, this is to act as a hedge against rising competition involving locals and foreigners in the property market


UEM Sunrise Bhd highlights the significance of positioning a quota for new launches — specifically directed at foreign buyers — capped at 10% and under, as a hedge against rising competition involving locals and foreigners in the property market.

MD and CEO Anwar Syahrin Abdul Ajib said the market for the premium segment with properties listed over RM700,000 is still sturdy with loan approvals at around 70%- 80%, when compared to the below RM500,000 housing bracket, which is at present producing a 40% to 50% loans approval ratio.

“I do not think that it is mandatory to fully open up new launch units for foreign buyers, or even consider lowering the foreign threshold price to RM700,000 from the present RM1 million,” he informed reporters at a media briefing in Kuala Lumpur yesterday.

“Our local properties continue to appeal to foreign purchasers, given that they are fairly affordable. To illustrate, a RM1 million property is equivalent to only about S$300,000 — that is a booster for them to carry on flooding our local market.

“For that reason, we need to find an equilibrium to make use of the foreign buyers to improve overall property transactions by clearing out the existing access stocks available,” added Anwar Syahrin.

UEM Sunrise is among the various other property players — among them the Real Estate and Housing Developers’ Association Malaysia — to have handed in a request for the government to reduce the foreign threshold price for property purchases within the RM1 million range in certain primary locations, as a way to prevent market overhang caused by excessive unsold supplies throughout the prime areas.

Subsequently, UEM Sunrise will be focusing on achieving 25%-30% year-on-year (YoY) in sales throughout the next three years for the Southern Industrial and Logistic Clusters (SILC) Phase 3, which has an estimated gross development value of RM800 million.

Anwar Syahrin believes the targeted buyers profile makes the more refined industries with higher appeals like food, electronics, health and beauty, combined with logistics significant.

“For SILC Phase 3, we in fact intend to develop high-value establishments, paired with a great influx of international companies coming in to expand businesses, which in turn support local companies.

“Furthermore, we do not wish to flood the area with unclean industrial sectors, considering we are attempting to get more high-value income jobs for the people around the area.

“Having said that, we are mindful that the market is challenging with more companies becoming a lot more careful in their capital expansion — attributable to the mounting interferences and new business models — that is why we are being realistic in our projections,” he said.

At present, SILC Phase 3 has attained just about RM50 million in sales, much less than the 80ha of vacant land under UEM Sunrise’s ownership.

The development rests on a net area of around 79ha and aims to get 85 industrial lots that may be part of a 526ha industrial park situated in Iskandar Puteri, Johor, scheduled to finish in the first quarter of 2018.

In addition, UEM Sunrise also inked a sale and purchase agreement yesterday with Luxx Newhouse Furniture Sdn Bhd, a subsidiary of Luxx Newhouse Group, for the sale of close to 9,290 sq m of land in SILC Phase 3 for a total sum of RM13 million.

Luxx Newhouse is forecast to shell out somewhere around RM80 million in the next five years to produce over 200 trained and skilled workers.

Commenting on the investment, Anwar Syahrin said this latest addition of the brand as Asia’s prominent surface provider is likely to spur even more growth for the more expansive Iskandar Malaysia community.

Luxx Newhouse president and founder Jimmy Tong said the move to invest in land in SILC Phase 3 is motivated by Iskandar Puteri’s market position as a regional hub to best serve the Malaysian market, concurrently rendering accessibility to the greater South-East Asian region.