- Maintain BUY on IJM Land with an unchanged fair value of RM3.86/share (10% discount to its NAV). We attended the official launch of The Arc – a social hub at IJM Land’s Bandar Rimbayu project yesterday.

- We came away impressed with its rapid progress – basic infrastructure/building works is already in full swing. Apart from The Arc, a link-road Kota Kemuning is now ready. Another access road to SKVE/ELITE should be completed within two years along with a clubhouse.

- Bandar Rimbayu enjoys excellent connectivity to five major highways and is a mere five-minute drive to Kota Kemuning and ~3km away from a future link to SKVE/ELITE via Bandar Saujana Putra.

- With its strategic location, well-crafted designs (ring concept/low-density layout) & green-themed landscape, Bandar Rimbayu is on an accelerated growth path – much like how well established townships such as Desa Park City and Setia Alam were in their early years.

- Despite the government’s recent ‘cooling measures’ on the property market, we expect Bandar Rimbayu to continue its forward march. Rising land prices within KL city centre are triggering an outward migration towards outlying areas –particularly for landed products. Hence, its reasonably-priced landed units are well-placed to tap into an expanding upgraders’ market.

- Furthermore, Bandar Rimbayu’s deepening prospects will likely receive a significant kick as the increasing presence of reputable developers nearby should expedite capital values within this matured but fast-expanding South Western corridor of Klang Valley.

- The original land cost for Bandar Rimbayu is only RM5psf, compared to ~RM18psf (based on NPV) that Tropicana Corp has paid for 1,172 acres of land near Bandar Rimbayu (total cost: ~RM1.3bil). Our channel checks reveal that several other developers are eyeing another large parcel of land (~1,000 acres) within the vicinity.

- Phase 1 (Chimes) & 2 (Perennia) of Bandar Rimbayu have already achieved strong take-up rates of over 85% and 70% since their launches in March and late-August respectively (nonbumi portion: fully-taken-up).

- The starting price for Phase 3 of Bandar Rimbayu - to be launched in Jan-2014 (cluster-semi-detached homes) - will likely be higher at over RM800k compared with ~RM580k and RM640k for Phases 1 & 2 respectively. We anticipate Bandar Rimbayu’s pre-sales to reach ~RM1bil next year vs ~RM600mil this year. Physical progress at some units of Phase 1 has already reached 65%.

Source: AmeSecurities