The mega merger of Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd in 2007 has created the country’s largest property group in terms of landbank and ongoing developments.

“The merger has allowed us to put in place strategic transformation initiatives to enhance operational efficiency as well as establish strategies for sustainable growth,” Tunku Badlishah says in a recent interview with StarBizWeek.

Datuk Tunku Badlishah … The merger has allowed us to enhance operational efficiency.

Following the merger in November 2007, priority was placed on establishing a Target Operating Model by July 1, 2008. This entailed a complete review of the organisation structure and operating processes by adopting best practices within the merged entities and re-engineering the organisation to best deliver the strategies and synergies expected from the merger.

For example, previously sales, marketing and customer service functions were centralised in the corporate headquarters. In an effort to improve the customer service and better understand the market, township offices have been established in each of the company’s ten townships. These offices are helmed by a township head with independent sales, marketing and customer service operations.

Tunku Badlishah says a comprehensive review was also undertaken of the existing development plans for each of the townships and where possible, products and development phases were replanned to enhance development value.

“Efforts were made to identify and execute projects that could increase the marketability of the townships for the benefit of existing and future residents,” he says.

As an example, he says Phase 5T in Putra Heights was originally planned as a typical terraced housing project consisting of 22’ x 75’ and 24’ x 75’ houses with about 500 units on 57 acres of land and an estimated gross development value (GDV) of RM275mil.

Taking into consideration its location at one of the most strategic areas in Putra Heights, The Glades has been re-planned as a premium gated development with meandering waterways and an exclusive lakeside club house with an adjacent retail complex – features that will enhance the project value and attract high-end buyers to the development.

Scheduled to be launched in the first quarter of 2010, The Glades product mix totaling 409 units includes bungalows, cluster villas, courtyard homes and two-blocks luxury condominiums with an estimated GDV of RM700mil, a 250% increase compared to the original plan.

Sime Darby Property has also pioneered a comprehensive Safe City agenda for its Ara Damansara township in its continuous efforts to create a safer living environment for its communities

Launched by Home Affairs Minister Datuk Seri Hishammuddin Tun Hussein on July 21, the initiatives are based on the Safe City criteria set by the Federal Department of Town and Country Planning, Ministry of Housing and Local Government.

Tunku Badlishah says the success of Sime Darby Property’s township projects so far show the merged entity has been well accepted by the public.

“Buyers are buying into the company’s reputation as a reliable developer with quality projects in good locations, innovative products and wholesome living environment.”

Having a common marketing platform such as the Parade of Homes Series, allows for the promotion of the company’s ten townships under a single initiative.

The Sime Darby Idea House is a socially, economically, and environmentally responsive prototype dwelling that provides an insight into future tropical living.

“We are constantly looking at innovative ways on how to assist potential homebuyers make their home ownership dream a reality. One of our most successful marketing initiatives is the Parade of Homes Series which was launched in June last year.

“The overwhelming response from homebuyers to the three campaigns so far exceeded our expectations. It is an indication that despite concerns over the economic climate, home ownership remains a priority among Malaysians.

“We just need to come up with out-of–the-box marketing ideas to give them the confidence to make that decision to purchase,” he adds.

Its latest Parade of Homes from March 6 to June 15 managed to record sales of 1,657 housing units worth more than RM1bil, by far the highest sales since its first launch last year.

“It is a major accomplishment given the weak economic environment that has negatively impacted the property industry,” Badlishah says.

Post merger, the company has also given top priority to research and development innovation.

Tunku Badlishah believes the future success of the company is dependent on its ability to create desirable, innovative and environmentally-friendly products by establishing new typologies, utilising new materials and construction methodologies and collaborating with cutting-edge technology providers.

Synergistic operational efficiency in research and development, product innovation and marketing will ensure the merged Sime Darby Property becomes a leading industry player in product offerings and sales going forward.

“One of the key initiatives of the year is the Sime Darby Idea House where we are showcasing the latest in construction solution, system applications which will be an example of how green architecture, good design and sustainable living can work harmoniously.

“The Sime Darby Idea House is a socially, economically, and environmentally responsive prototype dwelling that provides an insight into future tropical living.

“Conceived as a test bed for new ideas, the house showcases the latest in sustainable architecture in the buildings’ quest to become the first carbon zero residence in South East Asia,” says Tunku Badlishah.

Sharing his passion for the project, Badlishah says the Idea House will be a self sustaining building that generates power from the sun, reuse harvested rain water and is built entirely on the principle of modular construction where the user would be able to expand and contract the building as the need arises.

The entire frame and construction is modular to provide not only a speed and ease of construction, but also the ability for the house to be demounted in the future in order to preserve the terrain for future generations or future development.

Another initiative is The R&D Village which is a 20-acre experiment facility to be located in Elmina East.

Tunku Badlishah says the facility will be the testing platform to analyse various performance aspects of the company’s latest prototype designs.

“Working closely with our vendors and suppliers, the R&D Village will test and demonstrate new building products, construction technologies and system applications to the public in order to evaluate the response of the market.

“What we hope to offer to our partners is an opportunity to test and showcase products that have not been available or generally associated with regular home offerings,” he further explains.

He says the merger has allowed Sime Darby Property to take advantage of its increased scale by negotiating better terms with its vendors for the benefit of purchasers.

Significant cost savings and quality improvements have been achieved through identification of preferred vendors and negotiating pricing based on estimated annual requirements.

“Sime Darby Property is giving preference to vendors whose manufacturing process and products are “green” and “sustainable”.

“Quality has been enhanced as contractors are required to utilise specialist installers/applicators nominated by the preferred vendors and the product warranties are issued directly by the manufacturer to the purchaser,” he elaborates.

So far, the new procurement initiative has resulted in savings of up to 20% on certain building materials.

Tunku Badlishah says construction costs have also been reduced by combining construction contracts that are within the same location, as it has resulted in significant savings on the cost of preliminaries and mobilisation.

The Star – 22nd August 2009

“We can leverage on the group’s global presence and it will be easier and less risky for us to penetrate the new markets where the Group already has a presence. To realise our international aspirations, we will be leveraging on the strong reputation and global reach of the parent company,” Sime Darby Property managing director Datuk Tunku Badlishah Tunku Annuar says.

Currently Sime Darby Property has property related interests in Singapore, Indonesia, Vietnam, China, Australia and the United Kingdom with business activities that include asset management, hospitality and leisure, strategic investment and property development.

According to Badlishah, Singapore has been the company’s most successful international market to-date.

Given the limited land availability in the city state, most of its projects involve redevelopment of low-yielding properties into high value assets.

The timing of its recent condominium developments in Singapore has been fortunate and the company has managed to sellout its properties at the peak of the market and gain maximum value out of the projects, just before the global financial meltdown last September.

One good example is The Orion which was originally an old service apartment block with very low building efficiency within the vicinity of Orchard Road.

Upon redevelopment, 46 luxurious residences on a 27 storey condominium block were built and sold. The return on investment was a remarkable 63%.

Another successful project, Balmoral Hills is an exclusive freehold residential development at Balmoral Park in the prime District 10. The 62 apartments measuring more than 1,300 sq ft to 1,841 sq ft have gross development value of RM344mil.

In Australia, Sime Darby Property is developing Eagles Cove, an exclusive residential development on Queensland’s popular Gold Coast.

A joint venture re-development project of 250 acres of prime freehold land, it comprises high-end waterfront resort bungalows, low rise apartments and commercial units. The A$529mil project is planned for launch in mid 2010.

Badlishah says Eagles Cove is a unique example of a creative re-development initiative by the company in Australia.

“After the acquisition, we have undertaken some improvements to the site and provided linkages and access from an existing lake to the open sea. The creative engineering work has provided residents access to the open sea via a private lock which provides a non-tidal, secure environment for residents to moor their boats. The effort has significantly enhanced the value of the property,” he adds.

Other hospitality projects that have been completed Down Under include The Karri Valley Resort near Perth; and Quest Margaret River and Quest Subiaco in Western Australia.

The vast China market is also beckoning Sime Darby Property to expand its presence there.

Sime Darby Property first ventured into the China market via a joint venture development called Richmond Park in Beijing.

After exiting the successful Richmond Park project in November 2007, the company has been actively pursuing new development opportunities in China.

Sime Darby already has a presence in Weifang, a coastal city located within the fast growing Shandong Province, through ownership of ports and a water treatment plant and Badlishah says that Sime Darby Property is in the midst of acquiring two land parcels of 163 acres and 224 acres in Weifang.

The estimated gross development value (GDV) for the land parcels is estimated to exceed RM3bil upon completion in 10 years time.

United Kingdom is also under the radar of Sime Darby Property. Its presence in the UK is through Sime Darby London Ltd (SDLL) which has acquired a property in Bognor Regis for about £10.5mil.

Recently, the company signed a conditional sale agreement to sell part of the property for £26.5mil.

“With Britain’s property prices having dropped by some 40% and 50% since the global financial crisis, there are ample opportunities to pick up good assets at depressed prices. Our management is eager to explore London’s West End for some good low priced assets that are up for sale there. In the next few weeks, we will be putting in our bids for some open tenders. We believe there are still many opportunities to shop around for some good bargains in Britain,” Badlishah says.

With its wide geographical spread and relentless efforts to expand further, Sime Darby Property may become a household name in many other cities around the globe in the years to come.

The Star – 22nd August 2009

The ambitious development has been conceptualised in line with the National Physical Plan which calls for the development of the Kuala Lumpur Conurbation.

Stretching across the state of Selangor and Negeri Sembilan, the KL Conurbation covers an area of 1.2 million acres of which 126,000 acres belong to Sime Darby. Of this, 80,000 acres have been earmarked for development.

Tunku Badlishah says SDVV will strengthen the country’s position as a preferred global destination for the promoted sectors within the development that include tourism and entertainment; healthcare and wellness; education; green tech park, sports; and aviation-related industries.

A master-planned project that will span two decades, SDVV is expected to generate a GDV of between RM25bil and RM30bil.

He adds that Sime Darby Property is in the final stages of fine tuning the master plan for the mammoth project which is expected to be finalised in the next two months.

The first new township to be launched by Sime Darby Property will be the 1,000-acre Elmina when it rolls out early next year.

Says Tunku Badlishah: “The merged Sime Darby Group is committed to developing sustainable futures and Elmina East will be the first township launched post-merger as part of the SDVV master development plan.

“Elmina East is earmarked to be a pilot sustainable neighborhood development which will become a benchmark for Sime Darby Property’s future community developments.”

Elmina East will have an average of 80% permeability which means in a neighborhood, a person would be able to walk anywhere within a 380m radius within five minutes in 80% of that area.

“Our study shows that this is almost 30% higher than some of the best existing townships in the country,” he notes.

The company is also planning to connect the township via a network that rides on High-Speed Broadband Services (HSBB) to reduce travelling time in physical networking.

This in turn would allow business within the township to focus on productivity.

“We anticipate an increase in teleworking or flexi-hours when HSBB comes on live.

“We anticipate at full maturity, we would see businesses in Elmina reduce up to 2.5 tonnes of CO2 emission per person per annum; that is equivalent to a reduction of 40% per capita emission.

“In addition, we have also created vehicle-free zones in key commercial areas that will encourage better interaction between the residents and their surroundings.

“We also intend to create a series of infrastructure services that are connected by a convergence system – that means our water, common facilities; security and communication can be centrally managed,” Badlishah further explains on the plan.

Elmina East will be served by an integrated water-management solution which covers management of clean water, treatment and conditioning of grey water that is collected from surface run-offs and domestic grey water; and treatment of black water from the sewage plants.

The company is also working on developing a Building Automation System (BAS) that will be a given feature in all its houses.

“The BAS will allow better management of security, energy and climate control of the houses. We anticipate our residents would enjoy savings of up to 57% from power consumption by applying an efficient BAS application alone,” he says.

Based on the Building Research Establishment’s (BRE) Sustainable Development Excellence Framework that promotes components for sustainable communities, the aim is to reduce the per capita carbon footprint by 40% through more economical energy usage, less car usage and use of

construction materials that are certified products from renewable forest.

“With all the ongoing initiatives, we are confident the synergistic transformation of Sime Darby Property will not only create the largest but the best property company in the country,” Badlishah says.

The Star – 22nd August 2009

President and group chief executive Datuk Seri Ahmad Zubir Murshid said the group had so far invested about RM15mil to enhance the security and safety at its existing townships and would extend the concept to its other new township developments.

“Ara Damansara township will be the role model for this concept of security and safety and we plan to introduce this concept in our future developments,” he said yesterday at the launch of the Safe City Initiative and the launch of Ara Damansara police station.

Zubir said the group had invested about RM4mil alone for security and safety measures in Ara Damansara that included building the new police station, closed circuit television surveillance system, manned guard houses at each entry point and three cars for the police to do patrolling.

He added that in responding to the Government’s call to create a safer living environment for its citizens, Sime Darby Property was making an effort to transform Ara Damansara into one of the safest townships in the country.

On the group’s business performance this year, Zubir said it might not be as good as last year’s performance.

“Last year, the (high) price of crude palm oil (CPO) contributed strongly to the group. Nevertheless, this year, our other divisions will offset the low CPO price to achieve our expectation for this year,” he said.

On the group’s venture in Weifang prefecture in China, he said a team had been sent to do a study before drawing up a proper master plan.

“Initially, the size of this development project spanned about 700 sq km but our team found that it is actually about 100 sq km. It will be a mixed development project but we don’t know yet its gross development value at this moment,” he said.

It was reported last month that China had offered Sime Darby a multi-billion dollar property development project in the Weifang prefecture city in Shandong measuring 700 sq km.

The Star Newspaper – 22nd July 2009