MORE Malaysian developers are venturing overseas, such as in Britain, Canada and Australia, as they can land a project faster with all the approvals in place and make more money because of foreign exchange gain.
Profit margins for developers in Malaysia have been shrinking due to the higher land and building material costs, as well as the long approval process.
Property experts say more developers are expanding overseas, where they are not governed by as many laws and guidelines.
Earnings from foreign property sales also provide a sustainable base for international expansion plans. The return on investment could be in the double digit, they said.
In 2012, a consortium comprising SP Setia Bhd, Sime Darby Bhd and the Employees Provident Fund acquired the Battersea Power Station in London for £400 million (RM2.1 billion). When Phase One was launched, almost all the apartments were sold.
The Battersea project is a 10-year development and the consortium has undertaken the global launch of Phase Three with great success.
Battersea Project Holding Company Ltd chairman Tan Sri Liew Kee Sin attributed the success to the stakeholders, as well as the political support it received.
SP Setia has two other projects in Melbourne called Fulton Lane and the Parque, with combined gross development value of RM2.2 billion.
Meanwhile, Malaysia-based developer Mammoth Group is planning to build more residential apartments in Melbourne, following the good response to its first project known as MY80 Silver Skies.
Mammoth bought another site in Elizabeth Street for A$15.1 million (RM43.3 million) last year. It plans to build a tower to complement MY80.
UEM Sunrise Bhd has also ventured into Singapore, Canada and Australia.
The company entered the Australian market in October last year when it acquired a 0.4ha site on La Trobe Street and a 0.4ha site on Mackenzie Street for A$65 million.
A few months after the acquisition, it obtained the planning permit for the project on La Trobe Street and is now calling for the main building tender.
The project, known as the Aurora Melbourne Central with a gross development value of A$770 million, was unveiled recently and more than 95 per cent of the 941 apartments were sold within two weeks.
The project on Mackenzie Street, known as the Conservatory and worth about A$300 million, will be unveiled by June next year.
UEM Sunrise managing director/chief executive officer Anwar Syahrin Abdul Ajib said there should be a more collaborative approach among stakeholders to improve the performance of the Malaysian real estate industry.
“The planning and approval process is very much driven by the complexities and circumstances surrounding each project. For Aurora Melbourne Central, we have been extremely blessed with a team of talented consultants and a supportive local authority and board.”
Anwar said planning permit approval for development scheme in excess of 25,000 square metres of gross floor area in Melbourne was issued by the Department of Transport, Planning and Local Infrastructure (DTPLI).
The Melbourne City Council (MCC) and all the technical departments are the referral authorities in this process for urban design and other technical compliance.
“The most important aspect in facilitating an approval process is to ensure a continuous and consultative engagement process with the DTPLI and MCC to ensure a timely and mutually favourable outcome for the city and the project,” said Anwar.
~ By BUSINESS TIMES
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