Share
Start of a landbanking spree?
• Acquiring 200 acres leasehold land in Puchong
Yesterday, Glomac announced that it has entered into a sales and purchase agreement with the administrator and receiver of Score Option Sdn Bhd (SOSB) to acquire 200 acres of leasehold land in Puchong for a cash consideration of RM77m or RM8.84 psf.
• Comments
Recall that Glomac has previously entered into a joint venture with SOSB in 2003 to develop Lakeside Residence on a 90-acre land which forms part of the current 200-acre land to be acquired. After the launch of the first phase in 2005, the remaining phases were stalled following disputes between Glomac and SOSB. Since then, SOSB has entered into an administration and receivership.
The said land is located in close proximity to Puchong’s established commercial hub whereby IOI Mall and Tesco Store are located in the immediate vicinity. The location is well serviced by several major highways such as Lebuhraya Damansara-Puchong (LDP) and Shah Alam Expressway (Kesas). Please refer to Figure 1 for location map.
On the land price, the RM8.84 psf price for the 200-acre land seems reasonable as compared to the implied price of RM12 psf (minimum JV
profit of RM47m attributable to SOSB) for the 90-acre land under the previous JV arrangement. That said, we are unable to ascertain the
remaining useable land area as certain portion of the land has already been sold and there is also a lake on the said land. What’s positive is that property prices have increased significantly since the launch of the first phase of Lakeside Residence. We understand that the initial launch price in 2005 for terrace houses was around RM300,000 per unit as compared to current asking price of about RM440,000.
As management will be amending the existing master plan, details such as gross development value and development timeline are not available yet.
• Reiterate BUY, TP raised to RM2.43
Pending further information from the management, we leave our earnings estimate unchanged. We also maintain our BUY call premise upon strong 3-year earnings CAGR of 23.6% and more landbanking news flow. Nevertheless, we are raising our target price from RM1.98 (based mid-cycle valuation of 9x P/E on CY11 earnings) to RM2.43 (up-cycle valuation of 11x) as we believe Glomac is on the brink of a quantum leap in both earnings and landbank. Our optimism is further supported by our RNAV estimate of RM2.82. More aggressive investors should consider buying into its warrants which offer 66% upside as compared to the 35% upside in the underlying share.
• Acquiring 200 acres leasehold land in Puchong
Yesterday, Glomac announced that it has entered into a sales and purchase agreement with the administrator and receiver of Score Option Sdn Bhd (SOSB) to acquire 200 acres of leasehold land in Puchong for a cash consideration of RM77m or RM8.84 psf.
• Comments
Recall that Glomac has previously entered into a joint venture with SOSB in 2003 to develop Lakeside Residence on a 90-acre land which forms part of the current 200-acre land to be acquired. After the launch of the first phase in 2005, the remaining phases were stalled following disputes between Glomac and SOSB. Since then, SOSB has entered into an administration and receivership.
The said land is located in close proximity to Puchong’s established commercial hub whereby IOI Mall and Tesco Store are located in the immediate vicinity. The location is well serviced by several major highways such as Lebuhraya Damansara-Puchong (LDP) and Shah Alam Expressway (Kesas). Please refer to Figure 1 for location map.
On the land price, the RM8.84 psf price for the 200-acre land seems reasonable as compared to the implied price of RM12 psf (minimum JV
profit of RM47m attributable to SOSB) for the 90-acre land under the previous JV arrangement. That said, we are unable to ascertain the
remaining useable land area as certain portion of the land has already been sold and there is also a lake on the said land. What’s positive is that property prices have increased significantly since the launch of the first phase of Lakeside Residence. We understand that the initial launch price in 2005 for terrace houses was around RM300,000 per unit as compared to current asking price of about RM440,000.
As management will be amending the existing master plan, details such as gross development value and development timeline are not available yet.
• Reiterate BUY, TP raised to RM2.43
Pending further information from the management, we leave our earnings estimate unchanged. We also maintain our BUY call premise upon strong 3-year earnings CAGR of 23.6% and more landbanking news flow. Nevertheless, we are raising our target price from RM1.98 (based mid-cycle valuation of 9x P/E on CY11 earnings) to RM2.43 (up-cycle valuation of 11x) as we believe Glomac is on the brink of a quantum leap in both earnings and landbank. Our optimism is further supported by our RNAV estimate of RM2.82. More aggressive investors should consider buying into its warrants which offer 66% upside as compared to the 35% upside in the underlying share.
SHARE
TOP PICKS BY EDGEPROP
SALE
FEATURED
Country Heights Kajang
Country Heights, Selangor
RM 22,000,000
5 beds |
6 bath |
12500 sqft
SALE
FEATURED
Bandar Puteri Puchong
Bandar Puteri Puchong, Selangor
RM 1,468,000
4 beds |
4 bath |
2500 sqft
SALE
FEATURED
Bandar Puncak Alam
Bandar Puncak Alam, Selangor
RM 395,000
4 beds |
3 bath |
1200 sqft
SALE
FEATURED
Pulau Indah ( Pulau Lumut )
Port Klang, Selangor
RM 427,500
3 beds |
3 bath |
1081 sqft
RENT
FEATURED
Taman Perindustrian Bukit Serdang
Seri Kembangan, Selangor
RM 15,500
- beds |
- bath |
8000 sqft
