UEM Land said finalising AutoCity JV talks, to announce other big projects

KUALA LUMPUR (Nov 9): UEM Land Holdings Bhd is expected to finalise negotiations with a "reputable" joint venture (JV) partner by the end of the year for its latest project — the 250-acre AutoCity in Gerbang Nusajaya, according to Credit Suisse.

"Management expects to finalise negotiations with a JV partner to operate the planned AutoCity before year-end and stressed that the JV partner has a reputable name that will boost investors' confidence," said Credit Suisse in a research note yesterday (Thursday).

The AutoCity JV will have similar arrangements to UEM Land's recent partnership with Singapore's Ascendas Group, but at higher land prices.

UEM Land signed a deal with Ascendas earlier last month for the development of a RM3.7 billion integrated technology park in Nusajaya, Johore.

Credit Suisse, which had a meeting with UEM Land recently, highlighted that the property developer is expected to announce several other new projects in the 4,500-acre Gerbang Nusajaya development by December.

"Next in the pipeline is the Asian Trade Centre (China Mall) expected to be announced by first quarter 2013," the research report said.

China Mall will be a trading centre for Chinese products, planned with reference to Dragon Mart, Dubai, where UEM Land will lease the land to the operator for 15-20 years. After which, it will regain the land and plan to build high-rise apartments and offices.

UEM Land, according to Credit Suisse, mentioned that both local and foreign interests in Nusajaya have picked up and that there will be more tie-ups with Singaporean developers next year.

"Management says there will be more partnerships with Singapore developers. The potential areas are commercial, logistics and warehouse facilities, and residential developments," said Credit Suisse.

The property developer also revealed that sales for 2012 will likely fall short of its RM3 billion sales target due to delays in its Klang Valley property launches but it is still on track to meet its net profit growth of 40%.

Credit Suisse re-iterated its "outperform" rating on UEM Land, with an unchanged target price of RM2.85. At 3.45pm Friday, UEM Land's share price was unchanged at RM2.12.

"Key potential catalysts that could re-rate the stock are partnerships for new catalytic projects, the finalisation of Singapore-Johor MRT and easier immigration procedures and entry of additional Singapore developers," said Credit Suisse's report.

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