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Home / 2012: Annual Report: Managing Director’s Message

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The Penang residential property market, which had witnessed growing transaction volumes at a compound annual growth rate (CAGR) of 20.1% during the 2009-2011 period, turned cautious in 2012 when total property transactions dropped 21%, according to information from the Ministry of Finance Malaysia.

Penang was not the only market affected by the slowdown in the property market. Other states with major property markets, like Perak, Johor and Selangor, also saw fewer transactions last year. The softening of the lower-end as well as the luxurious market segments were seen as the main cause for the slowdown.

As Tambun Indah’s projects are built with affordability in mind for the middle to upper-middle segment of the spectrum, the Group was able to take on the challenges well to record positive growth in FY2012.

Operations Review

In FY2012, Tambun Indah recorded 4.9% growth in the number of units sold to 957 units versus 912 units a year ago, with new launches accounting for approximately 67.5% of all units sold last year.

The Group also managed to sell our products at higher prices, with total worth of FY2012 property sales growing by 15.4% to RM400.9 million from RM347.3 million previously. This indicates the successful positioning of our development projects to meet the ever-demanding property buyers in Penang.

Tambun Indah launched eight new projects and/or phases with a total estimated gross development value (“GDV”) of RM798.2 million, namely:

• BM Residence – Estimated GDV of RM56.4 million
• Carissa Villas – Estimated GDV of RM54.2 million
• Pearl Impian: Estimated GDV of RM84.4 million
• Pearl Indah 1, 2 and 3: Combined estimated GDV of RM175.9 million
• Pearl Residence: Estimated GDV of RM212.5 million
• Straits Garden: Estimated GDV of RM214.8 million

Aside from these new launches, the Group had nine other ongoing projects, which also did well during the year under review. We were able to sell RM96.3 million worth of properties out of unsold stock totalling RM151.0 million as at end- 2011. Unbilled sales stood at RM327.3 million as at end-2012.

  • Simpang Ampat

The Pearl City project in Simpang Ampat, Seberang Prai Selatan, Penang, is Tambun Indah’s largest mixed development to date with a total estimated GDV of approximately RM3.0 billion and it will be Mainland Penang’s premier integrated township upon its
completion in 2020.

Pearl City is characterised by its strategic location. There are 12 industrial parks within a 15km radius of its location that will certainly create potential demand for about 11,000 residential units, which is estimated to be built as part of the development, in addition to
becoming a catalyst area for commercial activities
within our development.

Within Pearl City, we plan to develop a thriving business park that will house food and beverage outlets, hypermarket, medical centre, boutique hotel and other commercial activities.

Additionally, Pearl City is only a minute’s drive away from a proposed electrified double track commuter train station, five minutes from the North-South Expressway and 15 minutes from the landing point of the Penang Second Bridge.

In FY2012, Tambun Indah launched five projects within Pearl City with an estimated total GDV of RM472.8 million. These projects were Pearl Indah 1, 2 and 3, comprising of two-storey terrace and two-storey semi-detached homes; Pearl Impian, comprising of double-storey terrace homes; and Pearl Residence, comprising of double-storey terrace, semi-detached and bungalow homes.

Take-up rates since their respective launches have been very encouraging. As at end-2012, Pearl Indah 1, 2 and 3 had take-up rates of 88.6%, 80.9% and 51.6% respectively.

  • Butterworth

Butterworth has historically been a transport hub for the State of Penang. It is home to the Keretapi Tanah Melayu (KTM) train station, the landing point of the first Penang Bridge and the Penang Ferry service.

Over the years, Tambun Indah has developed and completed several projects in Butterworth. These include Dahlia Park, Tanjung Heights, Capri Park and Kelisa Residence. All these developments comprise a mixture of shop offices, and landed and high-rise
residential units.

In FY2012, Tambun Indah launched Carissa Villas in Butterworth with a combined estimated GDV of RM54.2 million. This project has two phases: Commercial and Residence. The former is made up of double-storey shop offices, which have seen a take-up of 65.7% as at end-2012. The latter, a gated community made up of three-storey terrace homes, has posted a take-up of 41.1% as at 31 December 2012

  • Bukit Mertajam

The Bukit Mertajam property market has seen a growth trend over the past couple of years and Tambun Indah established a foothold here when we launched the RM43.7 million GDV Impian Residence development in late 2010.

To keep the momentum going, the Group launched the BM Residence project in August 2012, which has an estimated GDV of RM56.4 million. The development is made up of an 11-storey condominium block, twostorey bungalows, and two-storey semi-detached and three-storey terrace homes. Take-up rates for the condominium stands at 54.2% while the landed properties have a take-up rate of 46.1%.

  • Penang Island

Much has already been said about the Penang Island property market. While the number of residential units transacted dropped last year, it has to be noted that the transaction value actually rose. And, given the fact that some RM4.6 billion GDV of residential properties are being planned for just 2013 alone, there still remains much life within this segment of the market.

In FY2012, Tambun Indah entered the Penang Island market for the second time in our corporate history – the first being 2002’s Scotland Villas condominiums – when we launched the initial phases of our Straits Garden mixed development in October and November. The executive suites, studio suites and condominiums launched during this time have a combined estimated GDV of RM214.8 million and, as at end-2012, the takeup
rate stands at 48.4%.

Growth Strategies
The industry observers are all united in their positive outlook for the Penang property market in the medium- to long-term. 2012’s cautious stance has been seen as the market re-adjusting itself after the record gains of the past couple of years.

Positive economic growth, strong demand from home buyers and manageable mortgage rates are all factors that are expected to fuel the continuing growth of the State’s property market.

In order to grow in tandem with the market’s expected rebound in 2013 – while maintaining our own growth momentum – Tambun Indah will launch RM256.4 million estimated GDV worth of projects this year.

These projects are the Taman Bukit Residence gated link-homes in Bukit Mertajam, Seri Permai double-storey terrace and semi-D homes – also in Bukit Mertajam, the Camellia Park apartments and shops in Butterworth, and Pearl Avenue twostorey and three-storey shop offices in Pearl City.

Tambun Indah will also launch – at various times after 2014 – approximately RM1.9 billion estimated GDV worth of projects at Pearl City as we look to keep in step with the expected growth trends in Seberang Prai Selatan and the Penang property market as a whole.

Additionally, the Group will continue to seek out new land banks in Mainland Penang, with special emphasis on acquiring large plots in strategic locations, so that we can sustain our long-term growth trajectory and capitalise on our expertise inbuilding residential enclaves.

Tambun Indah’s current total land bank size stands at 699.4 acres, which will last us until 2020.


The consensus amongst industry analysts and valuers has been that the slowdown in Penang’s property market in 2012 was a blip and that the medium- to long-term outlook for this sector was positive, given the State’s booming economy, continued inflow of foreign direct investments, its growing population, fast-improving transportation infrastructure and rising demand for homes.

With our strong fundamentals and deserved reputation for high-quality modern developments at relatively affordable prices, Tambun Indah looks set to grow in tandem with the positive factors in the market.
Of course, the Group cannot afford to be complacent in what has become a highly competitive market. With strategies in place to keep our momentum going, together with your continued support of the Company, I believe Tambun Indah can continue to prosper and be a strong player in the Malaysian property market.

Thank you.

Ir. Teh Kiak Seng
Managing Director