Maybank IBG upbeat on UEM Sunrise's aborted KL city centre land deal

• On Wednesday, UEM Sunrise announced that its plan to buy the land on Jalan Semarak fell through after conditions precedent under the sale and purchase agreement (SPA) were not fulfilled within the conditional period, which expired on Tuesday.

KUALA LUMPUR (Feb 9): Maybank Investment Banking Group (Maybank IBG) viewed UEM Sunrise Bhd's unsuccessful acquisition of a freehold parcel of land along Jalan Semarak in the Kuala Lumpur city centre as a positive, as the deal would have led to its involvement in the highly competitive and over-supplied retail, office and hotel segments of the property market.

In a note on Thursday (Feb 9), the research house's analyst Wong Wei Sum said UEM Sunrise also faced stiff competition from nearby high-rise projects, such as Platinum Splendor Residensi.

She added that the developer's earnings forecast remained unchanged, adding that the stock currently traded at 0.2 times price-to-book and price-to-revised net asset value ratios respectively.

On Wednesday, UEM Sunrise announced that its plan to buy the land on Jalan Semarak fell through after conditions precedent under the sale and purchase agreement (SPA) were not fulfilled within the conditional period, which expired on Tuesday.

As the SPA had lapsed, UEM Sunrise said the vendor Nipponkey Sdn Bhd will refund its indirect wholly owned subsidiary Lucky Bright Star Sdn Bhd the deposit within 14 days.

When UEM Sunrise first announced the proposed acquisition on Aug 4 last year, it said the total purchase price of RM384 million will be satisfied in cash of RM235.8 million and in-kind of RM148.25 million.

At the time of writing, UEM Sunrise's share price was unchanged at 26 sen, giving it a market capitalisation of RM1.29 billion.