Sunway Properties expect the higher level of consolidation occurring in the slowing property market to benefit the sector in the long term, reported The Star.
As such, it is crucial for developers to focus on products which are relevant in a market slowdown, said Sunway Property managing director Sarena Cheah.
“We’re already seeing some consolidation happening in the property market. We believe it is beneficial for the market in the longer term,” she said at the roof topping out of Sunway Geo Residences.
“Marketwise it will be slower but for developers like us, we will continue to build and invest in locations and the townships that we build.”
In fact, the Sunway group plans to launch RM2 billion worth of projects next year. The company will focus on pricing and designing products that are relevant to the needs and demands of the market, said Cheah.
“Our launches are across the country, with heavier emphasis on the south and central regions.”
On the company’s plan to focus on affordable projects, Cheah said, “It will be relative to the location. Most of our products are below RM1 million. Of course, that will also depend on where our landbank is.”
Sunway reportedly posted RM192 million in new sales in the third quarter of 2016, taking the total new sales to RM805 million for the nine months of 2016. The figure also accounts for 73 percent of the company’s RM1.1 billion new sales target.
Notably, Sunway plans to launch RM245 million worth of properties in the fourth quarter, which will include offices and retail in Tianjin Eco-City condominium and Sunway Iskandar.
The slowdown in the property market saw the company delaying two project launches this year.
“For this year, we delayed two main projects, one of which is the last component Sunway Geo Residences,” stated Cheah.
Forming part of the Sunway Geo integrated development, the RM490 million Sunway Geo Residences comprises 472 apartments spread across two 30-storey blocks.
“We delayed it slightly because we’re improving the connectivity and accessibility from this particular development towards the retail, offices as well as the medical centre. We’re delaying the launch to next year.”
Aside from this, the company also scrapped plans to sell its Sunway Velocity office units, which it retained as a property investment asset.
“The other component that we’ve held back is an office block on top of the Sunway Velocity mall,” she said.
“We feel that because it’s located on top of the mall we may actually want to rent it out first and potentially use it as a real estate investment trust-type product rather than put it out to the retail market.”
“We’re not in a position where we must sell; and that is important because that means we can manage our strategy in line with our market cycles and at the same time, being able to optimise value for the project as well as the overall development.”
Image sourced from Sunway Property
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email diane@propertyguru.com.my