- A Sunway JV in Singapore has successfully tendered for a 5.87-acre land parcel at Mount Sophia in the heart of the republic under a 99-year lease at S$442.28mil (RM1.132bil) or at S$1,157/sq ft of allowable GFA.

- Sunway has a 30% stake in the JV company, Hoi Hup Sunway Mount Sophia Pte Ltd, while Hoi Hup Realty Pte Ltd and S C Wong Holdings Pte Ltd hold 51% and 19%, respectively. The tender exercise was carried out by Singapore’s Urban Redevelopment Authority.

- The JV will undertake a residential development on the land for a total GDV of S$800mil @ S$2,300/sq ft. To be developed within 60 months, the project with a plot ratio of 1.5 will comprise ~480 units of low-rise condominium units.

- Sunway says the allowable GFA would measure 382,423 sq ft and the saleable GFA is at 365,214 sq ft. It says the area is just 5 minutes to the Dhoby Ghaut MRT Station, the Orchard Road shopping belt and the cultural areas of Little India.

- Among the nine bidders, the Sunway consortium outbid the second highest bidder by only S$280,000. Sunway says the project is expected to contribute positively to the group’s earnings from FY15 onwards.

- We maintain our numbers. This development is positive for Sunway and adds to its ready pool of international investors in the republic who could potentially be buyers of its properties in Iskandar Malaysia.

- Sunway is scheduled to launch its first properties in Iskandar Malaysia in January next year.

- We maintain HOLD on Sunway with a fair value of RM3.05/share, based on a 10% discount to the SOP value of RM3.38/share.

Source: AmeSecurities