UEM Sunrise to build RM1.3b mixed development on PJ land

The property is strategic and surrounded by amenities and public transport, which will bode well for future earnings

By LYDIA NATHAN / Pic source UEM Sunrise

UEM Sunrise Bhd plans to build a RM1.3 billion mixed-use development on the 9.93-acre (4ha) leasehold factory land it has proposed to buy from Dutch Lady Milk Industries Bhd in Petaling Jaya (PJ), Selangor.

The proposed development project will be UEM Sunrise’s first project in the PJ township.

In an exchange filing yesterday, the property developer noted that the project is scheduled to launch in the next two to three years.

AmInvestment Bank Bhd stated that the property is strategic and surrounded by amenities and public transport, which will bode well for UEM Sunrise’s future earnings.

UEM Sunrise’s total landbank stands at 11,092.8 acres with a potential RM107.9 billion in gross development value (GDV).

UEM Sunrise purchased an 11.45-acre plot in Taman Pertama, Cheras, Kuala Lumpur, last year, which has been earmarked for a mixed high-rise development comprising 2,400 apartment units with an estimated GDV of RM1.1 billion. This project is slated to be launched at the end of the year.

The group continues to seek strategic acquisitions that will provide a strong sales funnel for the next five years.

AmInvest maintains a ‘Hold’ call on UEM Sunrise at 43 sen per share based on a 60% discount to its revalued net asset value with no adjustment for environmental, social and governance based on its three-star rating.

“We believe UEM Sunrise’s long-term outlook remains stable on its unbilled sales of RM1.7 billion, while its financial year 2021 (FY21) and FY22 will be mainly supported by the disposals of non-strategic land and a higher GDV target of RM1.2 billion in 2021.

“Due to the recent run-up in its share price, its potential upside is capped, so we maintain a ‘Hold’ call,” it stated in a report yesterday.

Similarly, Public Investment Bank Bhd has maintained a ‘Neutral’ call on the company with an unchanged target price of 55 sen.

It has not changed its estimates pending further details, but said the RM200 million Dutch Lady land deal is an addition to its land- bank in the central region.

Dutch Lady will continue its manufacturing activities at the PJ property as a tenant after the conclusion of the disposal, which is expected to be at the end of this year, until completion of new Dutch Lady facilities in Bandar Enstek in Negri Sembilan.

UEM Sunrise rose three sen or 6.52% to 49 sen on the news, valuing the property developer at RM2.33 billion.