Property
Bright future for Sunsuria
Ang Hui Hsien 
Monet Lily is the first of Sunsuria City’s series of Monet Residences
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After garnering attention in 2014 when it made a reverse takeover of Malaysia Aica Bhd, Sunsuria Bhd has gone on to become a formidable property player.

Sunsuria City is the product of Ter’s vision that encompasses homes, retail units, shopping malls, hotels and offices

Founded by executive chairman Tan Sri Ter Leong Yap, the developer is now widely known for its Sunsuria City in Sepang, also known as Putrajaya South. One of the crown jewels of the 212.5ha township is the first overseas campus of China’s Xiamen University.

This, along with the 5.5ha mixed development Sunsuria Forum in Setia Alam, will be the management team’s major focus this year as both projects are scheduled to roll out new products from April.

“In 2018, we will focus on getting approvals for more parcels within Sunsuria City to launch from 2019 onwards to cater for future demand,” CEO Koong Wai Seng tells FocusM.

He adds the company is also actively searching for land to expand its development profile.

While some of its peers have decided to adopt a wait-and-see approach until after the impending general election, Sunsuria is adamant in pushing ahead with its launches.

“Whether it’s good or bad times, we still have to deliver on our promise. When there is adversity, there will be opportunities too,” chief operating officer Simon Kwan says.

The developer will also be preparing for the launch of its projects in Kuala Lumpur next year, and has expressed an interest in entering into further joint ventures with companies to complement its property development business.

 

Education as a catalyst

With a gross development value (GDV) of RM10 bil, Sunsuria City is the product of Ter’s ambitious vision encompassing homes, retail units, shopping malls, hotels and offices.

To date, the developer has launched several components within the township. They include Jasper Square, which is an 86-unit commercial shop-office development, and mixed development Bell Avenue consisting of retail and small office home office (SoHo) units.

Both projects have recorded good take-up rates, and judging by the pace and demand for the early phases, the developer is confident the whole of Sunsuria City can be completed ahead of its 10-year timeline.

The good response has been attributed to several factors, chief of which is the Xiamen University Malaysia campus which carried out its first intake in 2016. Presently, it has close to 3,000 students and is expected to bring in about 1,000 to 2,000 new students each year.

“With the talents produced by the adjacent Xiamen University Malaysia, we will explore alliance with the students to invent disruptive property business models,” reveals Koong.

Koong says Sunsuria will explore teaming up with Xiamen University to create disruptive property business models

The university is not the only education component in Sunsuria City as it will also have schools from pre-school to secondary level. The developer has also obtained approval to build a Chinese vernacular school and is also in talks with several international school operators.

Kwan explains the university will boost demand for homes in the area as one-third of the students are from abroad while the schools will draw families to reside in the township.

“In addition to the overseas university students, their parents who come to visit them as well as short-term foreign lecturers would want to stay in serviced apartments, which are something we have in the pipeline.

“Parents who want their children to get into the Chinese school will also have a reason to purchase a house in the township,” he says.

This demand has spilled over to The Olive, the first residential development in Sunsuria City which was launched in March last year. Block A is fully sold while Blocks B and C have achieved 74% and 91% take-up, respectively.

In its report on the real estate market outlook for 2018, CBRE|WTW highlights education as a draw factor for investors in the Klang Valley’s southern growth corridor, namely Seremban and Nilai. Sunsuria City lies smack within the southern growth corridor.

“These areas are equally attractive for investment, especially Nilai where a few education institutions are situated. Locational factors are expected to be the primary criteria influencing buyers’ choice,” it says.

 

Growth factors

Towards the end of last year, the developer launched two more residential projects in Sunsuria City – Monet Lily in September and Monet Garden in November.

The former consists of 211 units of two-storey terrace homes priced from RM660,000, of which 79% have been taken up. The latter’s 360 units of three-storey townhouses priced from RM600,100 have recorded a 30% take-up rate.

These projects mark the first two phases of Monet Residences, which draws inspiration from the works of Claude Monet who was credited as the founder of French Impressionist painting.

The group is targeting to launch 308 units of two-storey terrace homes called Monet Springtime, with a starting price of RM763,300. It will also launch 850 and 900 sq ft Monet Meadow apartments – the first high-rise residences in the series – in the second half of the year.

CBRE|WTW has expressed optimism for the landed residential market in the area this year, stating in its report: “The landed residential market in the southern region would either improve or at least, remain stable, considering the presence of growth opportunities.”

Accessibility-wise, Sunsuria City is connected to the Maju Expressway (MEX), Putrajaya-Cyberjaya Expressway and North-South Expressway, in addition to a dedicated interchange from the North-South Expressway Central Link (Elite).

The township is also connected to the Salak Tinggi Express Rail Link (ERL) station which is merely a stop away from the KL International Airport and three stops from KL Sentral.

Raine and Horne International Zaki and Partners Sdn Bhd partner James Tan points out these factors will attract certain types of people to Sunsuria City.

“It will attract those living and working in the Putrajaya, Cyberjaya and KLIA areas, those who travel overseas frequently as it is near to the ERL station, investors who want to be part of Xiamen University’s growth and parents who want to send their kids to the university,” he says.

 

Sunsuria’s advantage

CBRE|WTW’s report states that ease of access prompts developments further away from the city centre which are presumably cheaper in land cost, and hence the units are cheaper.

Koong also says Sunsuria City is in an advantageous position due to its relatively low-entry land cost.

“We can be flexible in offering products that meet basic requirements but at the same time, with a catalyst like the high growth in the number of Xiamen University students, offer decent products that meet investors’ yield and capital appreciation (expectations).”

Aside from residential, Sunsuria also has plans to incorporate retail and entertainment elements into the township to take advantage of its proximity to the airports as well as capture the student population from the estimated 40 tertiary institutions situated within a 30km radius.

Such elements include Giverny Walk, which consists of 48 two-storey shops that will focus on community-centric services as well as food and beverage, and also US-based Horizon Village Outlets which follows the outlet shopping concept.

Other proposals are a replica of Xiamen’s famous night-time food street as well as a Korean-French theme designed mixed development comprising serviced apartments, retail outlets, mall and a boutique hotel.

Phase one of Sunsuria Forum in Setia Alam consists of two- and three-storey shop offices


Projects in the pipeline

Aside from Sunsuria City, the developer is also busy with another integrated development in Setia Alam – the RM10 bil Sunsuria Forum.

Its first phase comprising 234 units of retail shops and small offices was launched in March 2015 and has to date, achieved 94% take-up.

Kwan reveals that one of the confirmed tenants is Village Grocer which will take up 25,000 sq ft and is set to be a crowd-puller

Slated for handover in April, Kwan reveals that one of the confirmed tenants is Village Grocer which will take up 25,000 sq ft and is set to be a crowd-puller.

Next up, Sunsuria is getting ready to launch a 31-storey corporate office tower next month, followed by an integrated development of SoHo, serviced apartments and retail mall in April.

Kwan reveals the offices will be built to Class A requirements, though they will not be classified as such.

“One of the different elements that we have in this office compared to the others is facilities like gym, swimming pool and park for office workers to enjoy. Other than that, we will have a hybrid business centre and a co-working space,” he adds.

He says the business centre will have services such as a receptionist to accommodate start-ups which want to keep their operating costs low.

Other projects in the pipeline include a 1.6ha mixed development in Ampang as well as 343 units of serviced apartments in Sentul that are set to be launched this October and January next year, respectively.

 

Complementary businesses

As CEO, Koong has also overseen Sunsuria’s venture into the construction business involving a joint venture with local construction company Alunan Asas Sdn Bhd for steady construction delivery of property projects within the group.

“The other joint venture with China’s state-owned construction giant Citic Construction Co Ltd is for bigger infrastructure contracts,” he explains.

The JV with Citic was inked between the subsidiaries of both entities – Sunsuria Builders Sdn Bhd and Citic International Investment Ltd – and will look at projects throughout the nation while also using Malaysia as a hub to cater to Southeast Asia as part of China’s One Belt One Road initiative.

Raine and Horne’s Tan notes it makes sense for property developers to have their own construction arm.

“They can have more control over the cost, timing and above all, the quality of the products they develop. However, more often than not, it is the other way round where contractors venture into property development themselves,” he notes.

Agreeing wth the cost benefits is Property Price Tag CEO Cha-ly Koh, who points out that the practice is not new.

“Building a construction arm and maintaining efficiency could be challenging in this environment, hence the reason many conglomerates have chosen to spin off their construction arm to serve other developers. Maintaining a construction team in-house could prove costly for developers,” she says.

Kwan says Sunsuria also has an on-going partnership with a landscape company, and is more than willing to welcome future partners which can complement their core property development business.

“We remain open to more collaborations as we believe there are a lot of opportunities, and we shall see where they bring us,” he states.

Men of many hats

Sunsuria Bhd CEO Koong Wai Seng kicked off his career as an accountant in an international accounting firm before making his mark in property development.

Promoted from his former position of deputy CEO and executive director in 2016, Koong has more than 20 years of experience spanning various industries.

Armed with an accountancy degree from the University of Malaya, he started his career with Arthur Andersen and Co before joining Sunway City Bhd, where he stayed for 13 years.

A member of the Malaysian Institute of Certified Public Accountants (MICPA), he rose through the ranks and became the company’s chief financial officer and subsequently, the group finance director of Sunway Group.

Koong then had a stint as an executive director at the then-Dijaya Corp Bhd – since renamed Tropicana Corp Bhd – before leaving for Sunsuria in 2013.

Since then, he has been credited with spearheading major strategies in Sunsuria’s projects, including assuming the role of CEO in Sunsuria Medini in Johor Bahru and Sunsuria City in Sepang.

As for Simon Kwan, he may only have assumed the chief operating officer’s position at the start of the year, but he was already a well-respected executive in the company.

He was previously overseeing several departments, including sales, marketing, administration, building management, leasing and customer service. His new post sees him taking on two more tasks – business development and business innovation.

When Sunsuria executive chairman Tan Sri Ter Leong Yap approached him with an offer to join the company in 2009, it was an entirely new industry for the business and marketing graduate who had spent 16 years at a crane engineering firm.

It was a challenge as the company had only 16 people then, and as is the case with most new businesses, everyone has to do everything.

Needless to say, it was a crash course of sorts for the pioneer batch of staff, where learning was accelerated and they had to constantly adapt to their evolving roles.

Close to a decade down the road, Kwan’s perseverance has paid off but he is far from slowing down as he takes on his new leadership role. 

Exploring new opportunities

Like most of its peers, Sunsuria Bhd’s focus in the Greater Kuala Lumpur region is due to the high number of migrants it continues to attract from other states each year.

Driven by job opportunities, this constant stream of new residents has led to a growing population which, in turn, translates to robust demand for properties.

As pointed out by Sunsuria chief operating officer Simon Kwan, there is a familiar cycle for new residents, where they start off by renting a room before moving on to renting an entire unit before graduating to become property owners – first, an apartment and later, a landed property.

In recent years, however, the developer has set in motion plans to expand beyond its current area of focus, most notably to Iskandar Malaysia in Johor.

Sunsuria inked an agreement with Japan-based real estate developer Creed Group Ltd in 2014 for the setting up of CI Medini Sdn Bhd to develop in the southern development corridor.

However, in September 2016, the former exercised a put option which resulted in the joint venture company ceasing to be part of the group.

At present, it has been revealed that Sunsuria is looking at spreading its wings even further and has been eyeing international markets, having made several visits to other Southeast Asian countries and Australia to survey potential land for development.

 



This article first appeared in Focus Malaysia Issue 270.