SunCity positive on sales of Australian project

By Sharen Kaur
Published in NST on April 29 2010

Sunway City Bhd (SunCity) is building logistics and distribution centres at its RM1.1 billion industrial park project in Australia and it is positive on sales.

"Looking at currency appreciation, the economy is doing well. Industrial land price dropped more than 30 per cent in 2009 to A$225 per sq metre (A$1 = RM2.95). It is improving," said SunCity international property development division managing director Ngian Siew Siong.

SunCity and Australand Property Group are developing the project known as Wonderland Business Park on 120ha.

Construction started this year and the project is due for completion by 2014.

Ngian told Business Times that the company has sold one distribution centre to Best & Less, a retailer for A$44 million.

"We are negotiating two more deals. One local Australian company plans to buy a logistic and distribution centre and the other company wants to lease a separate building," Ngian said.

SunCity ventured into Australia in 1997 when it bought 220ha of land, which partly housed the Wonderland Sydney Theme Park in 1997.

Around mid-2000, the company closed the park and sold 100ha to a local institution and to Australand, which is controlled by Singapore's CapitaLand.

In 2005, it signed a joint venture with Australand to develop the remaining 120ha.

"We are proud of this venture. We may consider more developments in Australia," Ngian said.

SunCity targets to have 30 per cent of its net profit from overseas projects by 2015, from some 5 per cent currently. Its focus is on India and China, Ngian said.

The company has two joint-venture projects each in India and China, worth almost RM8.3 billion collectively.

Its project in China is Sunway Guanghao in Jiangyin, which will be launched in May or June. It comprises medium-end condominiums and specialty shops.

SunCity also has 110 acres to develop at the Tianjin Eco-City eco-themed integrated project. It will launch the project early next year.

In India, it plans to build Sunway Opus Grand Residency in Hyderabad, comprising more than 3,000 condominium units.

It will also build 1,500 units of condominiums on a 14-acre site near Hyderabad starting next year.

"The combined population in India and China is 2.5 billion so it is a huge market as house ownership is still very low. There is strong emerging middle class," Ngian said.