Malaysia’s Sunway sets sights on regional expansion

SINCE its launch more than 50 years ago, Sunway Group has made its name building sprawling new townships in Malaysia. But across the Causeway in Singapore, the group remains under the radar – a gap Sunway is working to bridge as it looks to expand its regional footprint.

In an interview with The Business Times, Sunway executive deputy chair Sarena Cheah highlighted the group’s transformation from a tin mining and quarrying company to one of Malaysia’s largest conglomerates with a combined market capitalisation of over RM40 billion (S$12.1 billion). She pointed to the group’s real estate, construction and healthcare units as linchpins of its business. Currently, the three segments contribute some 85 per cent of its pretax profit. 

Sunway is also arranging an initial public offering (IPO) of its healthcare business – expected sometime this year or next year. A Bloomberg report said the company is looking to raise RM3 billion to RM4 billion, based on a valuation of RM20 billion. This would be Malaysia’s biggest IPO in a decade.

“We hope to build on this foundation moving forward in our next 50 years,” said Cheah. “With years of experience and expertise built, good stakeholder backing, recognition from regional players, I think we are ripe to go (international).” 

She cited South-east Asia and China as promising markets with its burgeoning middle class. “The governments are very pro-growth,” she added.

Singapore, for instance, has been a “very good and stable” market for Sunway.

Most recently, on Saturday (Feb 22), the group’s wholly owned subsidiary Sunway Equity Holdings officially launched a new medical diagnostics imaging centre at Royal Square in Novena with Singapore Exchange Catalist-listed AsiaMedic.

The AsiaMedic Sunway Imaging centre, spanning close to 6,000 square feet, offers a comprehensive range of diagnostic imaging services, including computed tomography (CT) and magnetic resonance imaging (MRI), with a focus on sub-specialised fields of radiology.

On the real estate front, Sunway in October 2024 acquired a mixed-use site in Tampines with local developer Hoi Hup Realty for S$668.3 million. Months prior in February, the group clinched an executive condominium (EC) site in the new Tengah housing estate with Hoi Hup for S$423.4 million. The Tengah project is likely to launch in the middle of this year, and the Tampines project sometime next year. Another Tengah EC site, which the group bought with Hoi Hup in September 2023 for S$348.5 million, launched in November last year with an initial take-up rate of 57 per cent. Some 90 per cent of its 504 units have been sold at a median price of S$1,651 per square foot thus far.

When asked about its land acquisition activity this year, Cheah said that depends, though the group will continue watching the market. 

“If we feel that we can create value, then yes, but we don’t have to do it every year,” she said. “We will also be picky with opportunities because, after coming through a few crises, we are more disciplined in (capital allocation) and a little bit more pragmatic in how we grow.” 

She anticipates more partnerships and collaborations with local businesses in the future, especially with Sunway’s next development project in Iskandar Malaysia.

Spanning 2,000 acres, Sunway City Iskandar Puteri (SCIP) in Johor will be its largest integrated township located just 5 km from Singapore. It is expected to house more than 250,000 residents when complete – with education, healthcare, hospitality, entertainment, retail and commercial components.

Sunway has invested nearly RM3.5 billion in SCIP property launches and investments to date. There are now seven residential projects in the area, with around 97 per cent of the 2,000 homes available sold.

Buyers were mainly local Malaysians, although interest from Singaporeans and other expats living in the city-state has increased recently, said Cheah. On average, around 10 per cent of buyers have been Singaporeans over the past decade.

With the announcement of the Johor-Singapore Special Economic Zone, and Iskandar Puteri as one of nine flagship zones, Cheah said the group intends to ramp up investment in SCIP. This means more retail and commercial spaces, as well as facilities such as a new hospital and college, among other things.

“And once the Johor Bahru-Singapore Rapid Transit System Link opens, I think there will be quite a lot of opportunities to see what are some complementary services and things we can do with Singapore,” she said.

Besides Singapore, she pointed to China – where Sunway is currently present but to a much lesser extent – as another bright spot.

The group could use their know-how as a “master community developer” to build integrated townships in China, since the market is huge and “every city is like a country in itself”. 

In the shorter-term, Cheah said Sunway will continue investing in both Singapore and China, with one or two emerging markets – such as Indonesia, Vietnam or Cambodia – in its portfolio as a healthcare or development option. These markets will be key for its growth. She emphasised that though going regional is “part of the plan”, Sunway is in no particular rush given current market conditions. It is more crucial for the group to find a good partner before exploring any new territory, Cheah said.

“Yes, we want to diversify and enter other international markets since we are now very strong in our home country. But if we can’t find a good partner and the opportunity is there, we might not proceed with it.” She added: “If you ask me, we may do a little more in markets where we already are, rather than enter a new market, unless the value proposition is very compelling.” Cheah believes that Malaysia remains a “good market” to grow against a “very volatile global environment”. It will always be a core market, accounting for the large bulk of revenue, even as the group expands outwards, she said.