BY JOY LEE

Cheah: ‘We were a bit bold at that time because we just finished the Singapore sites and when we came here and saw the underground station, we thought it was a golden opportunity

MELBOURNE: UEM Sunrise Bhd is glad it has taken the opportunity to venture into Australia.

The purchase of the La Trobe site was not met with enthusiasm initially as the former carpark site came without planning approval and there were concerns about the high land price, said chief operating officer commercial Raymond Cheah.

He was speaking to reporters during the groundbreaking event of Aurora Melbourne Central at La Trobe Street recently.

Within a year of acquisition, UEM Sunrise launched its first Australian project in La Trobe Street, with an impressive 95% sales two weeks after its exclusive preview. The residential units are now fully sold and word has it that a real estate investment trust (REIT) may be looking to take up the serviced apartments en-bloc.

“Other people wondered how they could have missed it. We were a bit bold at that time because we just finished the Singapore sites and when we came here and saw the underground station, we thought it was a golden opportunity,” said Cheah.

Aurora comprises 941 residential units, 250 serviced apartments and retail and office space. It is Melbourne’s only residential development with direct underground connection to the rail network, Melbourne Central Station, as well as the CBD’s retail precinct.

The 92-storey Aurora skyscraper, with a GDV (gross development value) of A$770mil, will be the tallest building in Melbourne CBD when completed in 2019.

The company’s managing director and chief executive officer Anwar Syahrin Abdul Ajib said that the initial foray has opened doors to other opportunities.

The group currently has three sites in Australia, with the latest purchase in St Kilda Street. Said Anwar: “Aurora has given the UEM Sunrise board a lot of confidence, which is why we are able to get the third site and are looking for our fourth.”

When UEM Sunrise took ownership of the La Trobe land in October 2013, they made sure all the approvals were in place. “It was a fast turnaround, something that prior to 2013, people would have said was impossible,” said Anwar.

UEM Sunrise, the listed development arm of Khazanah’s wholly-owned UEM Group, purchased the 0.7 acre La Trobe site and a 0.5-acre plot in Mackenzie Street, both in Melbourne, in October 2013. It launched its second project, the 42-storey Conservatory, located on Mackenzie Street, last October and is currently 60% sold.

Conservatory comprises 446 residential units ranging from one to three-bedroom apartments and penthouses and retail space.

It overlooks the Melbourne Museum and Carlton Gardens.

As for its third project, the A$58mil 21-storey office tower on 412 St Kilda Road will be a high-end residential project. The site overlooks the magnificent 560-acre Albert Park which houses the Melbourne Grand Prix Circuit. The project is expected to be launched next year.

Anwar, who was appointed as MD and CEO in September 2014, said once completed, the three projects will have an estimated combined development value of A$1.3bil.

He expects overseas sales to kick in significantly over the next few years.

However, he noted that the company has to find a balance between its local and overseas markets as expanding abroad can strain its balance sheet.

“We have to look at what’s the perfect mix for revenue contribution. I still don’t have that perfect number. We have landbanks in the central and southern region in Malaysia and internationally.

“We see overseas contribution moving towards 20%-30%,” he said.

The company is aiming for a major overseas launch every year to meet that target.

On how its huge Johor landbank will feature in the company’s overall scheme of things, Anwar said the board believes in the long-term story of Johor, where about 75% of its local landbank is based.

“The diversification (abroad) is mainly to deliver what is expected of us as a listed company. People want to see profit growth. If we cannot demonstrate that, the share price will be affected and it will destroy value for our shareholders.

“We don’t want to see that.

“So we are reducing the risk of being too dependent on our southern landbank (in Johor),” he said.

Apart from Australia, UEM Sunrise has a presence in Vancouver, Canada via its 4.8-acre mixed-use development, Quintet at Minoru Boulevard City and the recently acquired site at Alderbridge.