Sunsuria Berhad (Sunsuria) announced that it is acquiring an additional 33% stake in Bangsar Hill Park Development Sdn Bhd (BHP Development) for RM71.4m, which will effectively raise its stake from 51% to 84%. To recap, the Group embarked on the joint venture to develop Bangsar Hill Park at Lorong Maarof, Bangsar with an estimated gross development value (GDV) of RM3bn, which consists of eight residential blocks and targeted to be completed by 2028. We understand the price of the 33% stake is based on the latest market value of the said project which is estimated at about RM590m, with the purchase consideration at a discount of about 2% or RM1.4m off the market value. Pending more clarity, we keep our earnings estimates for now though we increase our TP to RM0.55 from RM0.40 previously, after narrowing our discount from c.0.4x to c.0.5x, pegged on par with sector average currently. We maintain our Neutral call.

• Bangsar Hill Park Development (BHPD) was first mooted back in 2020, a project undertaken by BHP Development which owns and develops a strategically-located piece of land at a prime location in Bangsar. BHPD is proposed to be developed into a high-rise residential development comprising 8 blocks of residential apartment with a total number of 3,257 residential units. We understand that the estimated total gross profits to be derived from the project is c. RM0.9bn based on the estimated total GDV of RM2.9bn and the estimated total gross development costs of RM2.0bn. The first two towers (Tower D and Tower E) were launched in August 2020. The remainder of BHPD is now expected to be developed over the next 6 years from 2024. As for now, we understand the said development still has 5 towers left to be launched over the next few years. As for the stake increase, the related-party deal is projected to be completed by 1H24.

• Remaining total GDV of RM8bn. Sunsuria currently has c.2,052 acres of undeveloped landbank with potential GDV of RM8bn which we estimate could take at least 8-10 years to develop. About RM6bn GDV is mainly from Sunsuria City @ Salak Tinggi which has already completed projects with combined GDV of RM1.4bn to-date. On-going residential development projects, among others, include Tower A, D and E of Bangsar Hill Park, Seni Residences and multi-facility serviced apartment Tangerine Suites at Sunsuria City township and integrated mixed development Forum 2 at Setia Alam. We understand that its subsidiary, Bangsar Hill Park Development Sdn Bhd will unveil Talisa, the second phase of its Bangsar Hill Park development soon. We understand that the company held an official preview of the project back in July last year and has received more than 2,000 registrations. Talisa has a GDV of RM1.1bn and comprises 802 units across two blocks (Blocks B and C). Block B is a 57-storey tower with 410 units while Block C is a 55-storey tower with 392 units.

Source: PublicInvest Research - 30 Jan 2024