As reported in The Star Online, Maybank IB Research said it was concerned on Sunway Bhd's latest acquisition of a leasehold land in Singapore due to stiff competition.
The research house on Wednesday said while it was neutral on Sunway’s latest acquisition in Sengkang as the land cost seems reasonable at 46% of total gross development value (GDV), it was concerned on the relatively high competition there.
Total units completing between 2016-2017 in the Central-North area of Districts 19 and 20 (including Sengkang) are estimated at 8,199 units or 18% of existing stocks (source: Savills Singapore, URA).
Maybank IB was maintaining its hold on the stock as well as its earnings forecasts and revised net asset value target price (RNAV-TP) of RM3.37.
Together with its JV partners, Sunway has won a tender to acquire a 5.19 acre 99-year leasehold land located at Anchorvale Lane, Sengkang from the Housing and Development Board (HDB) of Singapore for S$241mil (RM724mil).
The winning price was 2.5% higher than the second highest bid price. Sunway would own 30% stake in the JV company, while the remaining stake will be split between Hoi Hup Reality (62%), Oriental Worldwide Investments (5%) and Azuki Investments (3%). The project GDV is estimated at S$520mil and slated to be launched by end-2017/2018. Earnings contributions should come in from 2019 onwards.
This new landbank has lifted Sunway’s total landbank to 3,303 acres with total/effective GDVs of RM49bil/RM31.8bil (KV 23%, Johor 61%, Penang 7%, Singapore 3%, China 2%, Others 4%).
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