‘Sentul land purchase to boost Mah Sing’s GDV to RM32b’

KUALA LUMPUR: Mah Sing Group Bhd’s recently acquired land in Sentul, here, worth RM95 million will raise the developer’s remaining gross development value (GDV) to RM32 billion and help beat its sales target of RM1.8 billion this year.

CIMB Research said Mah Sing will undertake a residential development on the land comprising serviced apartments, with estimated GDV of RM1.3 billion.

Targeted to be launched in the second half of this year, units in the project will be priced starting from RM326,000 a unit.

The project hits a sweet spot in the Klang Valley residential property market where there is strong pent-up demand from house buyers and an undersupply of properties for this price range in the past few years, said CIMB Research.

With the project, the research house said Mah Sing stands a higher chance of beating its sales target of RM1.8 billion this year.

Mah Sing has spent RM55 million on acquiring a 78 per cent stake in a private development company, which will in turn acquired the 3.4ha plot in Sentul for RM95 million.

The deal marks the second land acquisition undertaken by Mah Sing after a hiatus of more than two years.

With a cash balance of RM923 million as at end-financial year 2016, CIMB Research said the project has a small impact on the group’s balance sheet strength.

“This acquisition also reaffirms our belief that Mah Sing has regained its appetite for landbanking. Future land acquisitions could potentially re-rate its share price as new landbank typically raises a property developer’s revalued net asset value,” it added.

CIMB Research has maintained an “add” call on Mah Sing, with an unchanged target price of RM1.85.

Potential upward revision in Mah Sing’s sales target is a possible re-rating catalyst for its share price, it added.