UEM to start work on Johor project by Dec

UEM Land Holdings Bhd, Malaysia's largest property developer by market capitalisation, aims to start works on Gerbang Nusajaya, its new project in Johor worth RM18 billion, by the end of the year.

The 1,875ha development is located next to Nusajaya, one of five key nodes of Johor's Iskandar Malaysia economic growth corridor.

UEM Land, the real estate investment and development arm of UEM Group Bhd and Khazanah Nasional Bhd, is the master developer of Nusajaya.

Its managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the layout plan for Gerbang Nusajaya had been submitted. The project will take 25 years to develop.

"We hope to hit the ground before the end of this year. We are not sure when we will put the products into the market but hope to come up with something by year-end," he said.

Wan Abdullah, speaking to reporters yesterday after the company's shareholders meeting, said the key strategy behind Gerbang Nusajaya is to attract Singaporeans and create jobs.

He said UEM Land will not sell land this time but look for strategic partners to jointly develop it.

"UEM Land has been criticised for lumpy performance from land sales. But there is a major shift now with 74 per cent contribution from property development.

"In the long term, we hope to increase contribution from all our divisions, including investment properties and management," he said.

Gerbang Nusajaya will have residential precincts, a golf course, campus offices, activity-based retail and an industrial park.

"The market is beginning to shine for south Johor. We are leveraging on our proximity to Singapore. If we are not next to Singapore, I don't think we can enjoy the benefits that we are reaping like demand for our properties, and price increases," he said.

CIMB Research is maintaining its trading "buy" call or target price for UEM Land at RM2.56.

Its research head Terence Wong said the potential re-rating catalysts include positive news flow on Nusajaya and strong sales in the second half of 2012.

The stock closed two sen down yesterday to RM1.94

Wan Abdullah said UEM Land will launch new catalyst projects in Johor, including condominiums.

He hopes UEM Land will do better in the current fiscal year, helped by sales from its on-going projects in Johor, Greater Kuala Lumpur and Canada.

UEM Land targets to launch projects to the tune of RM4.5 billion this year, and achieve RM3 billion in sales. It has so far achieved sales of RM600 million.

By Business Times