The 50:50 joint venture agreement that was inked on Tuesday is bound to create some ripples in the market for various reasons.
Firstly, these are two highly successful developers with strong track record and branding in their respective niche sectors in the local property market.
Sime Darby Property is well regarded as an established township developer with award-winning townships including Subang Jaya, UEP Subang Jaya or USJ and Ara Damansara.
Sunrise, which specialises in luxurious condominiums and lifestyle commercial projects, is behind the huge success of Mont’Kiara as a vibrant neighourhood and a favourite property hotspot.
Over the years, it has garnered a strong following of repeat buyers and investors who are loyal to the Sunrise brand.
Both Sime Darby and Sunrise have also gone international with projects in various parts of the globe.
As in all partnerships, the question of who will lead as the manager will also crop up.
At an analysts briefing on Thursday, Sunrise executive chairman Datuk Tong Kooi Ong discloses that the manager will be from Sunrise and both partners will have two representatives each on the board of Sime Darby Sunrise Development Sdn Bhd.
Sunrise’s value proposition of replicating its trademark Solaris commercial project in the heart of Bukit Jelutong Commercial Centre will inject more life and further accelerate the development of the fast maturing Bukit Jelutong township.
Moving into a new growth area like Bukit Jelutong, which is the gateway to the massive Guthrie Corridor, certainly fits into the bigger plans of Tong who is eager to expand Sunrise’s reach and presence outside of Mont’Kiara.
With the fast changing market environment which will only get tougher as time evolves, forming strategic alliances will be the way forward for property groups to leverage on each other’s strengths and further sharpen their competitive advantage.
While some of the developers would already have lined up sufficient land to last them for the next couple of years and some up to the next decade or more, many of the companies are operating from “hand to mouth” or just have enough land for their ongoing projects.
Their main handicap is to get hold of the right piece of land to undertake new projects and ensure their capacities are put to good use for regular income streams.
With its vast land bank, Sime Darby Property certainly looks like a good partner to team up with.
Having plantation group Sime Darby Bhd as its parent is definitely a boon for Sime Darby Property as far as landbanking is concerned.
The mega Sime Darby merger in 2007 that involved Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd has created the country’s largest property group in terms of land assets and sales.
The merger resulted in the enlarged Sime Darby group owning a sprawling plantation land of close to 500,000 acres, of which 37,000 acres are under Sime Darby Property, the group’s property arm.
Certainly there is much value to be realised from the vast landbank and what better way to unlock their value than to invite the specialists of the various property sectors to partake in the development plans.
This way, the high value adding initiatives by the joint venture partners will ensure higher value can be realised from the land in a shorter time.
Property development is certainly a challenging business that needs constant new refreshing and creative ideas to remain at the top. One way of ensuring a developer’s name is held in high regard is to have well-planned and designed projects in the right locations.
In view of the tough environment that companies are still operating in, there is a need for them to adopt more market savvy and value-enhancing strategies to stay ahead of the game.
Even big corporations with strong reputation and deep pockets cannot take their existence for granted and have to be consistently vigilant of how they are faring.
Forming strategic alliances and partnerships between companies, whether they are big or small players, will open up more opportunities and provide a cushion to meet the challenges ahead.
Deputy news editor Angie Ng believes every property project, however small or big, deserves to be treated with reverence and be given the best thoughts and efforts.
By The Star (by Angie Ng)
Posts
No comments:
Post a Comment