- The Sime Darby-S P Setia- EPF consortium will launch Phase 3 of the Battersea Power Station project, featuring apartments worth more than £1bil (RM5.4 billion) in October.

- Battersea Project Holdings Co Ltd (BPHC) chairman Tan Sri Liew Kee Sin said that would be the final launch for the £8bil London project this year.

- Phase 3 will feature 600 apartments priced at around £1,800/sq ft, he told Business Times on the sidelines of Invest Malaysia in KL yesterday.

- Phase 2, comprising 254 units with a GDV of ~£1.6bil, was launched last month and 95% of the available units were sold within the first week.

- Tagged at an average price of £2,300 per sq ft, the units were priced at more than double those in Phase 1 (£1,100 per sq ft), according to the report.

- Liew told the paper that less than 2% of the buyers in Phase 2 were Malaysians, while the British investors accounted for ~75%. He also expects Phase 3 to be sold out within the first week.

- Sime and S P Setia each hold a 40% stake in the project, with the EPF holding the remaining 20%.

- We currently value Sime Darby’s property division at ~RM23bil representing a 10% discount to the RNAV, which includes its share of the Battersea project. The property segment makes up 31% of our SOP value for the group.

- Despite its huge land bank, property accounted for 11% of Sime Darby group’s EBIT in FY13 and only 7% for IHFY14. The group is targeting a PBIT of RM1bil by FY16 for the property division, mainly driven by the recognition of the Battersea project.

- Sime Darby currently faces external challenges in the industrial and motor divisions, while the palm oil division awaits growth to set in for its Liberia plantations.

- We maintain our BUY call for Sime Darby, with a fair value of RM11.20/share – a 10% discount to our SOP value of RM12.44/share. It remains as a prime beneficiary of any upward movements in CPO prices. 

Source: AmeSecurities