PETALING JAYA: Property developer Sunway Bhd, which achieved record sales of RM2.55 billion last year, has set a conservative target of RM2.2 billion for 2022 as the group is cautiously optimistic about its future prospects.

While the group is confident of hitting its target for the year, Sunway’s real estate division managing director Sarena Cheah said the company still needs to prepare for potential uncertainties that could impact the real estate market. on local and foreign fronts.

“We are optimistic because the demand is still there. However, we still have to be careful because there are still some uncontrollable things to watch out for,” she said during Sunway’s 2022 business update and press conference yesterday.

The developer, who has also set a sales target of RM2.2 billion in 2021, launched properties worth RM3.2 billion last year.

Commenting on the sales drivers for 2022, Cheah said the company will focus on launching value-for-money products in favorable locations. “We plan to offer the right units in the right locations,” she said, adding that Sunway will launch properties worth RM2.3 billion in 2022.

Cheah said nearly 70% of new launches will be in Malaysia, with the rest in Singapore and China.

On the local front, Cheah said the halt to the home ownership campaign (HOC) this year could initially lead to slower sales. “I think there will be an immediate impact and maybe it will be a bit slower at first. But the key will be the inherent demand. If there is no demand, having all the campaigns is not going to work. not help,” she said.

The government launched the HOC in January 2019 to address the over-indebtedness situation in the country. The campaign, which saw developers offer various discount packages and incentives, was originally scheduled for six months, but was later extended for a year.

It generated sales totaling RM23.2 billion in 2019, exceeding the government’s original target of RM17 billion.

The government reintroduced the HOC in June 2020 as part of the Penjana initiative to boost the property market after it was affected by the Covid-19 pandemic.

The campaign, which finally ended on December 31, 2021, was seen by many as an effective buffer against the adverse effects of the pandemic.

Many real estate developers who saw record sales during the pandemic attributed their performance to the HOC.

For Sunway’s Klang Valley launches this year, Cheah said the developer will launch the first tower of serviced apartments at Jernih Residence in Kajang which will have a Gross Development Value (GDV) of RM281 million. .

The developer will also launch a condominium and superlink units at Sunway Alishan in Kuala Lumpur (with a GDV of RM261mil) and the first serviced apartment tower in Bukit Jalil (which will have a GDV of RM275mil).

Cheah said Sunway is confident of getting good take-ups for the units, despite the oversupply of high-rise buildings in Malaysia.

“In the central region, we have a lot of high-rise units, but we don’t have completed inventory that isn’t being sold.

“It’s basically about being able to deliver a good product,” she said.

Meanwhile, in Penang, Sunway will launch townhouses at Sunway Wellesley (GDV: RM120mil) and condominium units at Sunway Dora (GDV: RM71mil).

Cheah said the developer will also continue to build Sunway Medical Center Seberang Jaya and expand Sunway Carnival Mall.

In Ipoh, Perak, Cheah said the company will launch townhouses in Sunway City Ipoh (GDV: RM75mil).

In total, Cheah said Sunway has allocated RM2bil to invest in Sunway City Ipoh, which will include the development of a medical center, a 700,000 square foot net leasable area shopping center and infrastructure upgrades. , in collaboration with the state government.

Besides launching semi-detached houses with GDV of RM213mil in Sunway City Iskandar Puteri, Johor, the developer will also launch semi-detached houses and bungalows in Sunway Lenang Heights (GDV: RM93mil).

Additionally, the group will begin construction of Sunway Medical Center Kota Bharu, Kelantan, which will anchor its wellness center.

For the group’s international markets, Cheah said Sunway will launch private condominiums at Flynn Park (GDV: RM698mil) in Singapore and Sunway Gardens in Tianjin, China (GDV: RM276mil).

With the acquisition of 20 acres of new land in 2021 with a potential GDV of RM4bil, Sunway’s land bank currently stands at 3,334 acres. Its unbilled sales are RM4bil, which will provide profit visibility for the next three years.

Regarding Sunway’s record sales last year, Cheah attributed the outstanding performance to strong sales in Singapore.

Cheah said Singapore contributed around 50% of the group’s total sales last year.

“For 2022, we believe the bulk of sales will come from the Malaysian market,” she said.

Separately, Cheah said Sunway is currently planning eight integrated wellness centers across Malaysia.

She said the hubs will be anchored by Sunway Medical Center, with Singapore’s sovereign wealth fund GIC Pte Ltd as an investment and strategic partner.

“Sunway will invest RM2bil in capital expenditures over the next four to five years to build the medical centers,” Cheah said.

For its third quarter ended September 30, 2021, Sunway Bhd’s net profit was RM81.10 million on revenue of RM1.07 billion.

For the nine-month period ended September 30, 2021, the group’s net profit jumped to RM210.07 million from RM157.99 million in the previous corresponding period, while revenue jumped to 3, 05 billion RM against 2.56 billion RM a year earlier.

In a filing with Bursa Malaysia on its financial performance for the cumulative nine-month period, Sunway said the revenue improvement was due to a higher contribution from most business segments, except for the real estate investment segment.

He added that pre-tax profit was also better due to higher profit contribution from most business segments except the real estate investment, construction and quarrying divisions.

MIDF Research, in a report on the group’s third-quarter financial performance, said it stood by its 2021 earnings estimate for Sunway.

This, the research house said, is supported by the expectation that Sunway’s underperforming divisions will see stronger growth in the fourth quarter.

“Our target price of RM1.71, which was derived using the sum of parts valuation, remains unchanged. We maintain our neutral call on Sunway, with an expected total return of 4.1%,” said MIDFResearch.