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The time to tap the UK property market is now. According to Sunway Group founder and chairman Tan Sri Jeffrey Cheah, the group is even now in the midst of purchasing 3 buildings to be turned into student accommodations, in Bristol and Sheffield.

In CNBC’s Managing Asia programme interview with host Christine Tan, Cheah said “Student accommodations are the way to go. We are gearing up for that, hopefully. I don’t have a crystal ball, but if we work hard, we will succeed. In terms of education, the UK gives some of the best education.”

The Sunway Group has purchased 97 properties in UK through a fund, which all the building’s tenants are from the British government. According to Cheah, this purchase has given the group reasonable returns.

Cheah also believes that China will be the biggest foreign market for the Sunway Group. According to him, “China has brought 700 million people out of poverty. That has never happened in the world. No one has done it and they have done it. So I have great confidence that under its system and good leadership, China will be the No.1 in the world, in all forms.”

Cheah says that had he studied in a Chinese school in his youth, the Sunway Group investment in China would now be much larger. Unfortunately, his father had stated he had to attend an English school, otherwise, he would not get a job.

The Sunway Group’s vision for Sunway University is to be the “Harvard of the East”. Although competition is stiff, Cheah believes that it is possible.

According to Cheah at the interview, “I have always set very high benchmarks. If I don’t set high benchmarks, my people may think that we are so good. So, I say ‘Harvard of the East’. Now, of course, we are linked with Cambridge and Harvard, and universities always compete.

“I tell my friends, competition is always good and it’s always there. You can’t stop it and it brings out the best of all of us. I want to set the foundation now, but I don’t think it will happen during my lifetime,” he said at the interview.

It is Cheah’s dream that the Sunway University will be ranked within the top 100 universities in the world within the next 10 to 15 years.

“If you go to Harvard and Cambridge, a lot of people asked me, ‘How do you get to link up with these people?’” We have to do what we have to do. They will check you left, right and centre... your integrity, reputation, who are we and who are we tying up with. They are all now very satisfied with the relationship, and we can develop a much, much stronger relationship... they will help us. They’re happy to impart knowledge to our people. I tell my people that I want to learn from the best,” he said.

Cheah he believes in adding value and reinvesting assets without putting measure on profit margins. In an example, he cited Banjaran Hotprings where they increased their room rates to recoup their upgrade investments.

In the interview, Cheah stated that “Teeming costs money. We tie ropes on the walking track, (put) a bit of artificial rock here and there to make it look real, and then landscaped it very well. These are extra, extra things. But when people come, they say, ‘wow’. When you charge them a higher price, they say, ‘OK, it’s fine’.

“Like the Sunway Lagoon theme park, you have to continuously re-invest. You won’t like to go back to a theme park when you’ve seen and played with everything. So, we need to upgrade and put new rides and attractions, and that’s what we are doing,” said Cheah.

According to Cheah, profit margins have decreased by more than 20%, as compared to when they first started property development. Their current profit margin stands at between 10% and 12%.

“Sometimes, what we do in business is affected by the external environment. Right now, there’s a trade war. Trade war is one thing, but then business confidence is not there. Business people or fund managers don’t like uncertainty. There’s uncertainty out there. For the world, there’s the trade war. You don’t know all this geopolitics is going to cause a lot of headache.”

Cheah says that businesses are looking at the government’s promises in Malaysia. He said, “We like to see things happen, but unfortunately, it’s slowly happening.”

(11 October 2019)