Malaysian developer targets Singapore buyers for Johor project

Developer UEM Sunrise says a falling ringgit and city state's property curbs will boost sales

PUBLISHED : Saturday, 21 September, 2013, 12:00am
UPDATED : Saturday, 21 September, 2013, 2:29am

UEM Sunrise, Malaysia's second-biggest developer by market value, is betting the slide in the local currency and measures to curb property prices in neighbouring Singapore will boost sales at its largest projects.

UEM may surpass its new sales target of three billion ringgit (HK$7.35 billion) for the year, chief executive Wan Abdullah Wan Ibrahim said.

The developer is the biggest landowner in the Iskandar region in Malaysia, an economic development zone about twice the size of Hong Kong in southern Johor state bordering Singapore.

Iskandar "is more attractive and so cheap in comparison to Singapore", Abdullah said in Singapore on Thursday.

The ringgit has dropped 5.4 per cent against the Singapore dollar over the past four months and the city state has been implementing curbs to cool an overheated property market, prompting Singaporeans to look for cheaper property across the border.

Singaporeans accounted for 74 per cent of overseas buyers, making them the largest foreign and second-largest group of purchasers of UEM's properties after Malaysians, Abdullah said.

UEM, based in Kuala Lumpur, is taking advantage of the closer ties being fostered by the two Southeast Asian countries after decades of arguments.

Malaysian Prime Minister Najib Razak and his Singapore counterpart Lee Hsien Loong have announced plans for a high-speed rail link by 2020 that would cut the 300 kilometre journey from Singapore to Kuala Lumpur to 90 minutes, with Lee saying the two capitals could be linked like London and Paris.

UEM, 65 per cent owned by Khazanah Nasional, Malaysia's state-investment company, plans to start selling 6.29 billion ringgit worth of new projects in Iskandar by the end of the year, Abdullah said.

Home prices for UEM properties were expected to rise 5 per cent each year for the next couple of years, Abdullah said.

"Other developers may be opportunistic and may raise selling prices more but we are here for the long term," he said.

Selling prices per square foot for new condominiums developed by UEM in Nusajaya had risen to 775 ringgit this year from 539 ringgit in 2011 , Abdullah said.

UEM shares have declined 14 per cent in the past three months, making them the worst performers on the benchmark FTSE Bursa Malaysia KLCI Index.