By THE STAR
By now, the trend is clear. There is a wave of township developers going out into the region to tap into less mature markets that still have a lot of room to expand.
SP Setia Bhd’s executive director Voon Tin Yow told Bloomberg on Thursday the company was negotiating to develop a township in Ho Chi Minh City, Vietnam.
SP Setia is Malaysia’s biggest property developer in terms of its total market value of over RM6bil. The country’s biggest and most successful developers are making the current advance into the region.
Voon did not disclose the proposed project’s sales value, or gross development value (GDV) in industry jargon, but it would be sizeable to have any impact on Setia’s overall profitability.
Gamuda Bhd has shown how large property projects in Vietnam can be. Although it is better known as a construction and infrastructure group, Gamuda has become a creditable developer. Its GDV was estimated by a brokerage at an amazingly high RM15bil.
That became so high because its Yenso Park project in Hanoi is estimated to have a GDV of RM3.5bil while the GDV for its Long Ah project in Ho Chi Minh City could be as large as RM5bil.
These sales figures would, of course, take a number of years to be realised. It also assumes Gamuda would be able to replicate its development skills in Vietnam.
Going further afield, Sunrise Bhd announced on Thursday it would buy three parcels of land for RM112mil in Richmond city, British Columbia, Canada. It is planning for a mixed development project on the land.
Sunrise is known as the country’s best developer of luxurious condominiums.
There is conviction now that property development can be managed on a regional basis. Capitaland Ltd of Singapore proved that. A GLC, it has become a global group.
Among a wide array of interests, it has five Raffles City mixed projects in Singapore, Shanghai, Beijing, Chengdu and Bahrain.
CapitaLand has been rewarded for its global expansion with a total market value of S$22.6bil (RM50.4bil). Malaysia may have timber concessions three times the size of Singapore but its leading developer dwarfs all the property companies here.
Malaysian companies are rising to this challenge. CapitaLand provided the inspiration, and the challenge for Malaysian developers who are confident they have skills to match that of CapitaLand, Mah Sing Group Bhd managing director Datuk Leong Hoy Kum told StarBiz.
Mah Sing could be the next developer to extend its business to Vietnam.
“We intend to go overseas. We will identify a strong partner in countries like Vietnam, China, India, Indonesia and the Middle East, and Vietnam will be the first,” he said.
IJM Corp Bhd is a local contractor which stepped out into the region and proved it could become a regional construction group.
It is now also the Malaysian pioneer as a township developer in India, with a land bank of about 200 acres there.
No doubt, the impending listing of DLF Ltd, a property company owned by Kushal Pal Singh, in India would inspire IJM. DLF would be listing for an estimated RM70bil in market value.
While some observers will doubt or criticise the overseas overtures of the best and brightest among Malaysia’s developers, the latter are putting their money where their mouth is and starting a transformation process to become regional developers.