At RM77mil for 200 acres leasehold land in Puchong, analysts say it’s a steal
PETALING JAYA: Glomac Bhd's proposed acquisition of leasehold land in Puchong from Score Option Sdn Bhd (SOSB) will be advantageous to the property developer for its attractive price and strategic location, analysts said.
At RM77mil for 200 acres, the effective cost of the land worked out to be RM8.84 per sq ft, which was significantly lower than the range of transacted or asking prices of RM32 to RM48 psf in Puchong.
“The purchase price is deemed cheap,” TA Research said in its report.
Located near the established commercial hub of the town with the IOI Mall and Tesco Store in the vicinity, it is basically an extension to Glomac's present development, called the Lakeside Residences in Puchong.
“Glomac can now strategise any land enhancement activities to improve the value of its enlarged landbank,” TA Research said.
The Lakeside Residences is a joint-venture development between Glomac and SOSB on a 90-acre land to be acquired.
The project, comprising 537 units of double-storey terraced houses and 100 units of semi-detached houses, was launched in 2005 with a total gross development value (GDV) of RM250mil.
“What's positive is that property prices have increased significantly since the launch of the first phase of Lakeside Residence,” ECM Libra said in its report, comparing the initial launch price of about RM300,000 per unit in 2005 for terraced houses versus the current asking price of about RM440,000.
Puchong is one of the property hot spots in the Klang Valley, as the area is easily accessible via Lebuhraya Damansara-Puchong, the Shah Alam Expressway as well as the Bukit Jalil highway.
With the land acquisition, Glomac's future earnings capability would be enhanced, as the property developer could now extend its presence in Puchong and gain from the fast-growing property market there, analysts said.
“The acquisition would be accretive to the company's net asset value (NAV) and earnings,” AmResearch said in a recent report.
On average, some analysts were looking at a potential increase of 25% for the company's NAV and more than 20% in the company's earnings in the financial year ending April 30, 2013.
However, Glomac had yet to reveal details such as the GDV and timeline for its “enlarged” Puchong project. Following the proposed land acquisition, Glomac's existing masterplan for the area would likely undergo significant amendment, according to some analysts.
Analysts in general viewed Glomac favourably for its strong earnings visibility with unbilled sales of almost RM600mil.
They also expect further news flow on land acquisition by the company as part of its aggressive expansion plan.
Glomac reported a net profit increase of 71% year-on-year (yoy) to RM15.88mil for the second quarter ended Oct 31, 2010 on revenue of RM140.89mil, which represented an increase of 86% yoy.
Over the next 12 months, the company would be launching projects valued in excess of RM1bil. These include a RM250mil apartment project in Mutiara Damansara, a RM145mil retail mall in Glomac Damansara and the RM400mil Glomac Utama mixed development in Petaling Jaya.
At RM77mil for 200 acres, the effective cost of the land worked out to be RM8.84 per sq ft, which was significantly lower than the range of transacted or asking prices of RM32 to RM48 psf in Puchong.
Located near the established commercial hub of the town with the IOI Mall and Tesco Store in the vicinity, it is basically an extension to Glomac's present development, called the Lakeside Residences in Puchong.
“Glomac can now strategise any land enhancement activities to improve the value of its enlarged landbank,” TA Research said.
The Lakeside Residences is a joint-venture development between Glomac and SOSB on a 90-acre land to be acquired.
The project, comprising 537 units of double-storey terraced houses and 100 units of semi-detached houses, was launched in 2005 with a total gross development value (GDV) of RM250mil.
“What's positive is that property prices have increased significantly since the launch of the first phase of Lakeside Residence,” ECM Libra said in its report, comparing the initial launch price of about RM300,000 per unit in 2005 for terraced houses versus the current asking price of about RM440,000.
Puchong is one of the property hot spots in the Klang Valley, as the area is easily accessible via Lebuhraya Damansara-Puchong, the Shah Alam Expressway as well as the Bukit Jalil highway.
With the land acquisition, Glomac's future earnings capability would be enhanced, as the property developer could now extend its presence in Puchong and gain from the fast-growing property market there, analysts said.
“The acquisition would be accretive to the company's net asset value (NAV) and earnings,” AmResearch said in a recent report.
On average, some analysts were looking at a potential increase of 25% for the company's NAV and more than 20% in the company's earnings in the financial year ending April 30, 2013.
However, Glomac had yet to reveal details such as the GDV and timeline for its “enlarged” Puchong project. Following the proposed land acquisition, Glomac's existing masterplan for the area would likely undergo significant amendment, according to some analysts.
Analysts in general viewed Glomac favourably for its strong earnings visibility with unbilled sales of almost RM600mil.
They also expect further news flow on land acquisition by the company as part of its aggressive expansion plan.
Glomac reported a net profit increase of 71% year-on-year (yoy) to RM15.88mil for the second quarter ended Oct 31, 2010 on revenue of RM140.89mil, which represented an increase of 86% yoy.
Over the next 12 months, the company would be launching projects valued in excess of RM1bil. These include a RM250mil apartment project in Mutiara Damansara, a RM145mil retail mall in Glomac Damansara and the RM400mil Glomac Utama mixed development in Petaling Jaya.
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