Malaysia UEM says 2009 sales goal tough

KUALA LUMPUR (Reuters) - Malaysia's UEM Land (ULHB.KL) has seen property sales picking up after a lackluster first quarter but its goal to grow sales by 20 percent this year remains challenging, its top executive said on Monday.

"It's challenging. I will not lead you elsewhere. It's tough but we have not given up," UEM Land Managing Director Wan Abdullah Wan Ibrahim told the Reuters Global Real Estate Summit.

The company logged sales of 511 million ringgit last year, he said.

Wan Abdullah said UEM Land, valued at about $1.04 billion in the market, is finalising a plan to raise 354 million ringgit ($100.1 million) via bank borrowings and is working on a phase-2 financing program.

He declined to provide details or the amount the company plans to raise in the second phase, saying it is looking at various instruments.

"Our funding is for medium- to long-term, (the 354 million ringgit) is just the first phase, we have a few other phases, which I can't share with you now," said Wan Abdullah.

He said UEM Land is in "serious discussions" with four companies for development projects in Iskandar Malaysia, a government-sponsored economic zone in the southern Johor state near Singapore.

UEM Land is the master builder of Nusajaya City, the flagship development of Iskandar that covers 24,000 acres.

Last week, Dubai-based Damac Properties, hit hard by the financial crisis, said it had canceled a 396 million ringgit land deal with UEM Land in Iskandar. The deal was originally for the development of a 43.5 acres land in Puteri Harbour, a waterfront project in the economic zone.

Wan Abdullah said he is confident of securing new deals of similar or even higher value for the land, which is now open to other suitors after Damac dropped the deal.

"We have got a few other companies, both local and foreign, they are looking into investing in Puteri Harbour. We are negotiating, hopefully we will be able to announce some deals before the end of the year," he said.

Analysts said UEM Land relies heavily on land deals to drive earnings growth because most of its development projects are still new.

Shares in UEM Land fell 8.6 percent to 1.38 ringgit a share on Monday. The wider market .KLSE was down 1.28 percent. UEM Land's share price has more than doubled over the past three months.

Khazanah Nasional, the investment arm of the government, controls 77 percent of UEM Land.

($1=3.538 Malaysian Ringgit)

(For summit blog: blogs.reuters.com/summits/)

(Editing by David Chance and Muralikumar Anantharaman)