By Andrew Clugston
Malaysian listed development group, UEM Sunrise Bhd (“UEMS”), one of Malaysia’s leading property developers has marked its first venture in Australia with the acquisition of two development sites in Melbourne’s central business district.
Acquiring sites at 224 LaTrobe St and 23 Mackenzie St for a combined $65 million, UEMS plans to join an ever increasing number of Malaysian developers delivering some of Australia’s largest residential towers.
Enticed by our sound political, legal and financial systems, and the fact we are home to three of the top 10 most liveable cities in the world, Melbourne was the next logical step in the group’s international expansions following successful international ventures in Vancouver and Singapore.
224 LaTrobe St, home to the recently launched Aurora Melbourne Central development, will be Melbourne’s tallest residential building. Aurora Melbourne Central is an integrated mixed-use development comprising 941 residential apartments, 208 serviced apartments/hotel, commercial offices and retail. Aurora will be UEMS’s first project in Australia. 23 Mackenzie St is set to follow Aurora, delivering almost 500 apartments over 37 levels.
But developing property in a new country can be fraught with danger. Different laws, different markets and different customs can trip up many new entrants. Much can be learned from observing the way UEMS have entered this new market.
Key lessons to be learned.
Lesson 1 – Listen to the locals:
UEMS identified from the outset the importance of local knowhow. Avoiding the mistake many new entrants make, UEMS appointed an entirely local team of consultants, including local project managers, architects, engineers etc. Having a highly experienced Australian team has ensured all major risks are anticipated and resolved before they become an issue.
Lesson 2 – Listen to your customers:
Selecting a location for your next development can be largely driven by market demand. Expanding into a particular region, just because your competitors are, is not an adequate reason. Knowing what your customers want and finding the right property is paramount.
UEMS has clearly listened to the market in launching its first development, Aurora Melbourne Central. Sales have been achieved at a record breaking pace with 182 units of the 200 units snapped up within three days of the exclusive preview launch in Kuala Lumpur.
Lesson 3 – Know your location:
The development team at UEMS spent a considerable amount of time observing the Melbourne market and reviewing properties before committing to its first acquisition. This involved several trips to Melbourne as well as seeking the guidance of experienced valuers and consultants. Too often, we see new entrants commit to a site without understanding the market and the key risks of a particular development.
As an experienced international developer, UEMS has been able to avoid many of the pitfalls suffered by new entrants to Australia thereby ensuring they enjoy a long and successful future in our city.