20 September, SUNWAY CITY – Sunway Berhad’s (Sunway) wholly-owned subsidiary, Sunway City Sdn Bhd, has signed an agreement yesterday to acquire 100% of the total issued and paid-up share capital in Sterling Paradise Sdn Bhd (SPSB) at a purchase consideration of RM 15 million with the rights to 47 parcels of prime freehold land measuring approximately 11.8 acres in the mature neighbourhood of Mutiara Bukit Jalil (the Lands).
The lands are strategically located for a potential residential-led mixed-use scheme, being just 600 meters away from the Muhibbah LRT station, with another three LRT stations within a three-kilometer radius (Bukit Jalil, Awan Besar, Sri Petaling) and easy access to multiple highways such as the LDP, KESAS, MEX, and the toll-free Bukit Jalil Highway.
In addition, the lands are surrounded by a host of amenities within a five-kilometer radius including the Bukit Jalil Recreational Park, Bukit Jalil Golf and Country Resort, Bukit Jalil National Stadium, International Medical University, SJK (C) Lai Meng, and the upcoming 1.8 million sq ft Pavilion Bukit Jalil shopping mall.
SPSB has secured the lands on relatively favorable terms at a purchase consideration of 15% of the gross development value of the future development less a fixed sum of RM 36.7 million. The variable nature of the purchase price coupled with only RM 30 million of the purchase price to be paid upfront will allow Sunway greater agility in pricing its future development to meet the shifting demands of the market.
In addition, the lands come with an approved development order, thus accelerating speed to market. The development is expected to be ready for launch by the second half of 2020 with the expected completion in 2026, contributing positively to Sunway’s earnings.
According to Bank Negara Malaysia, housing loan approval rates remain fairly robust at 74.6% as of 1H2019 to the benefit of some 180,000 borrowers with Kuala Lumpur and Selangor accounting for more than half of those figures. Quite noticeably, first-time home buyers formed 44% of these successful applicants during the same period, recording its highest level in the last five years. This coupled with the fact that property prices between RM 300,000 and RM 1 million forms 63% of all housing loan approvals, indicate the resilience of properties at this price point despite the challenging market. With this in mind, Sunway seeks to introduce a lifestyle development that is catered to this target group in this upcoming development.
Commenting on the acquisition, Sunway Property Managing Director, Sarena Cheah said “The proposed freehold, close-to-transit, development will match the current demand, especially for upper-middle income millennials who has flocked to Bukit Jalil in search for a greener environment, great accessibility and great amenities close to the city center.”
“We plan to deliver liveability within a secure and healthy community through this development, and are looking to price our properties affordably for this market.” she added.
Bukit Jalil is located about 20 km from the Kuala Lumpur city center and is a well-known sports hub housing four stadiums including the Bukit Jalil National Stadium, the largest stadium in the country, Axiata Arena, National Aquatic Center and National Hockey Stadium. Fitness enthusiasts will enjoy jogging in the sprawling Bukit Jalil Recreational Park which is one of the largest green lung in the Klang Valley.
Other catalytic developments in Bukit Jalil include Technology Park Malaysia, which houses MIMOS, Astro and Iris Corporation, and Bukit Jalil City, a sports centric mixed use development adjoining the National Stadium. Residents of the suburb also enjoy easy access to well-known schools and universities including SJK (C) Lai Meng, International Medical University (IMU) and Asia Pacific University (APU).
The landbank acquisition is Sunway Property’s fourth acquisition for the year, the first being a 6.16 acre land in Tampines for an executive condominium housing development (EC development) with a planned GDV of RM 2.4 billion (SGD 800 million), followed by a 9.5 acre parcel of leasehold land in Kota Damansara comprising of serviced apartments and lifestyle retail units with an estimated GDV of RM 544 million, and 6.5 acres of land in Tianjin Eco-City, China with an estimated GDV of RM 770 million (RMB 1.3 billion) aligned with its strategy to make opportunistic acquisitions in-line with its Master Community Developer proposition.
Currently Sunway’s landbank total is 3,356 acres amounting to RM 58.7 billion in GDV with a total development period of 15 years.