- We maintain our BUY call on IJM Land with an unchanged fair value of RM3.84/share, pegged at a 10% discount to its NAV. IJM Land made an impressive debut in London with a 75% take-up rate for Phase 1 of the Royal Mint Gardens project (completion: end-2017).

- This translates into sales of £150mil (RM787mil) worth of properties that were launched simultaneously in London and Kuala Lumpur on 27 September.

- Phase 1 (GDV: £200mil) is made up of three towers (254 apartment units). Notably, the allocation of 40% to UK investors has been virtually taken-up. We expect sales momentum to accelerate with another two upcoming launches in Singapore and Hong Kong this month.

- Apart from an attractive entry cost (average: £1,100psf) for a Zone 1 property in London, we attribute the project’s early success to its strategic location, design and good connectivity. The development is only a three-minute walk from the Tower Hill station, adjacent to the City of London financial district.

- This strong start provides IJM Land with a fresh impetus to launch Phase 2 (GDV: £100mil), which comprises a proposed five-star hotel, hotel serviced apartments (33 units) and residential apartments (79 units).

- IJM Land’s rising stock in London is emblematic of its fast expanding brand name overseas. Armed with a strong balance sheet, the group is looking to widen its footprint in London’s robust property market, and has already received offers from UK parties to undertake mixed development JVs. However, its immediate focus is on successfully delivering the Royal Mint Gardens.

- The project is an added boost to IJM’s broadening presales pipeline. Six more major launches worth over RM2bil have been lined up by year-end. They include Phase 3 of Bandar Rimbayu (GDV: RM373mil), Pantai Sentral Park Phase 1 (RM180mil), Seri Riana Phase 2 and Seremban 2.

- IJM Land is bent on surpassing the RM2bil mark in new sales it achieved for last year, and has raked in RM1.2bil in 1HFY14. We forecast FY14F new sales of RM2.3bil, rising to RM2.4bil-RM3bil for FY15F-16F.

- Last month, IJM Land inked a 50:50 JV with FCW Holdings to develop a mixed project in Segambut (land cost: ~RM280psf; GDV: RM1.5bil). Our forecast is maintained for now pending more details on its launch timeline.

- IJM’s total GDV stands at RM37bil with solid unbilled sales of ~RM2bil (1.6x FY13 property revenue).

Source: AmeSecurities