PETALING JAYA: The inclusion of UEM Land Holdings Bhd in the 30-stock benchmark index FTSE Bursa Malaysia KLCI (FBM KLCI) from today could provide a catalyst for the stock. It will be the only pure property developer listed among the index’s constituents, analysts said.
However, analysts also caution that a negative outlook of the region’s property market could dampen its share price movement, noting that several countries, especially Singapore and to some extent Malaysia, have started to tighten the liquidity tap.
Maybank Kim Eng said in a research note last Friday that UEM Land’s high-end projects such as the Aurora Tower located in the KLCC area could face stiff competition with other projects like the KL International Financial District (KLIFD), the Pudu jail redevelopment project called Bukit Bintang City Centre and the planned 100-storey Warisan Merdeka.
Loong Kok Wen from RHB Research Institute told The Edge Financial Daily that over the short term, there will be news flow regarding the development of Iskandar Malaysia, of which UEM Land is the major beneficiary.
She said it is highly likely that in the first quarter of next year, both the governments of Malaysia and Singapore will meet to discuss the potential extension of Singapore’s Mass Rapid Transit system into Johor Baru.
However, she noted that the development project owned by M+S Pte Ltd, the joint venture company owned by Khazanah Nasional Bhd and Temasek Holdings Ltd in Marina South and Ophir-Rochor, of which UEM Land is the project manager, may not happen in the shortest time because of the expected dampened demand for high-end properties in Singapore.
Nevertheless, an official with UEM Land commented that the potential earnings contribution from the project to the group is minimal, and it is actually the group’s first step into exploring other potential development projects in the island republic.
Market observers say UEM Land’s vast landbank in Iskandar Malaysia could benefit from Singapore’s property restrictions, as it may attract foreign buyers who are now shunning real estate in the republic.
On Dec 7, the Singapore government imposed a 10% stamp duty on foreigners buying residential property on the island. The move was aimed at curbing foreign buying of properties and improve housing affordability for the local population.
Maybank Kim Eng said the group will likely win more government land deals, such as the Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, the former Pudu jail development project in Jalan Hang Tuah, as well as the former Unilever factory land in Bangsar.
“We understand that UEM Land has been shortlisted for the 7.7ha land owned by Pelaburan Hartanah Bumiputera Bhd. Located at the intersection of Jalan Bangsar and Jalan Maarof, the land will be developed into a mixed development project with an estimated gross development value of RM4 billion to RM5 billion.
“There is a high chance of clinching the land bid, we think, given Sunrise’s strong branding and proven track record in high-rise integrated developments in the Klang Valley. Sunrise’s newer office/retail/SoHo projects like Summer Suites and Arcoris@ Mont’Kiara (office portion) have received good response with 85% to 100% take-up,” the report added.
UEM Land’s share price added two sen to close at RM2.26 last Friday.
This article appeared in The Edge Financial Daily, December 19, 2011.
However, analysts also caution that a negative outlook of the region’s property market could dampen its share price movement, noting that several countries, especially Singapore and to some extent Malaysia, have started to tighten the liquidity tap.
Maybank Kim Eng said in a research note last Friday that UEM Land’s high-end projects such as the Aurora Tower located in the KLCC area could face stiff competition with other projects like the KL International Financial District (KLIFD), the Pudu jail redevelopment project called Bukit Bintang City Centre and the planned 100-storey Warisan Merdeka.
Loong Kok Wen from RHB Research Institute told The Edge Financial Daily that over the short term, there will be news flow regarding the development of Iskandar Malaysia, of which UEM Land is the major beneficiary.
She said it is highly likely that in the first quarter of next year, both the governments of Malaysia and Singapore will meet to discuss the potential extension of Singapore’s Mass Rapid Transit system into Johor Baru.
However, she noted that the development project owned by M+S Pte Ltd, the joint venture company owned by Khazanah Nasional Bhd and Temasek Holdings Ltd in Marina South and Ophir-Rochor, of which UEM Land is the project manager, may not happen in the shortest time because of the expected dampened demand for high-end properties in Singapore.
Nevertheless, an official with UEM Land commented that the potential earnings contribution from the project to the group is minimal, and it is actually the group’s first step into exploring other potential development projects in the island republic.
Market observers say UEM Land’s vast landbank in Iskandar Malaysia could benefit from Singapore’s property restrictions, as it may attract foreign buyers who are now shunning real estate in the republic.
On Dec 7, the Singapore government imposed a 10% stamp duty on foreigners buying residential property on the island. The move was aimed at curbing foreign buying of properties and improve housing affordability for the local population.
Maybank Kim Eng said the group will likely win more government land deals, such as the Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, the former Pudu jail development project in Jalan Hang Tuah, as well as the former Unilever factory land in Bangsar.
“We understand that UEM Land has been shortlisted for the 7.7ha land owned by Pelaburan Hartanah Bumiputera Bhd. Located at the intersection of Jalan Bangsar and Jalan Maarof, the land will be developed into a mixed development project with an estimated gross development value of RM4 billion to RM5 billion.
“There is a high chance of clinching the land bid, we think, given Sunrise’s strong branding and proven track record in high-rise integrated developments in the Klang Valley. Sunrise’s newer office/retail/SoHo projects like Summer Suites and Arcoris@ Mont’Kiara (office portion) have received good response with 85% to 100% take-up,” the report added.
UEM Land’s share price added two sen to close at RM2.26 last Friday.
This article appeared in The Edge Financial Daily, December 19, 2011.
