IJM Land (IJMLAND) is buying 50% of a company, owned by TanSri Robert Tan, owning 95.83 acres of land in Tebrau Johor for RM51m. The landis surrounded by matured townships and fronts a main road. The price tag ofRM24 psf is considered fair. We estimate a GDV of RM520m for IJMLAND's portionfor a mass housing project priced at RM410,000/unit. We are positive on theacquisition as we expect Johor to buck the bearish property trend. There willbe no earnings impact in FY12-13E as any launch will likely take place towards endFY13E. Impact to our RNAV is negligible given the size of IJMLAND'spipeline  projects (total GDV of RM24b).  There is  no  change to  our  TP of  RM2.28  based on a 21% discount* to our FD SoP RNAVof RM2.88. We maintain a Market Perform on the stock as we reckon that itsSebana Cove@Johor play will only be more exciting next year. Additionally, 75%of its sales are still derived outside of Johor. 

Buying Tebrau@Johorland for RM51m. IJMLAND has entered into a conditional Share Sales andPurchase Agreement to acquire a 50% equity interest in Nasa Land S/B (NLSB),subject to conditions precedent (see below). NLSB is the developer of a mixeddevelopment project called Desa Palma. The project has a remaining 95.83 ac(net land) and is located in the a matured residential area, surrounded by wellknown townships like Setia Indah, Mount Austin, Taman Desa Tebrau and within ashort driving distance to AEON Tebrau City. 

Land price of RM24psf is considered fair. We understand that the land could be fronting amain road. It has also been converted and subdivided into individual titles.Hence, the pricing is similar to smaller plots of land and is not comparable toSP Setia's acquisition of its Tebrau land back in Jan-2011 for RM11 psf (266ac), which is located in a more secluded area and was not subdivided. We see noissues with the group fully funding the acquisitions internally as the group isin a net cash position with a cash pile of RM711m. 

Estimate GDV ofRM510m  for IJMLAND's portion. Sinceland cost is cheap, we estimate that land cost here will make up 10% of theGDV; if so, we can expect development margins of between 25%-30%  depending on the development concept. This isalso supported by the assumption of 13 units per acre for mass housing townshippriced at RM410,000/unit. In the area, standard double storey terrace homes arepriced between RM350,000-RM550,000/unit. There will be no earnings impact  in FY12-13E  as  any launch  will  likely take  place  towards end FY13E. 

Positive on theacquisition. Our recent visit to Johor has us believed that Johor couldbuck the bearish property trend given its favourable population growth dynamicsand catalytic plays (e.g. O&G) (Refer to Property Sector Report, 16/3/12).IJMLAND expects to record historical high sales in FY13E of RM300m vs. FY12E'sRM200m. We also do not discount possibility of IJMLAND buying up the remaining50% stake in NLSB. 

*Discount is based on 1.2x FY13E PBV @ -1.0SD of averagesince RTO. Conditions precedent. NLSB must secure financing facilities to repayadvances of RM109.8m, based on terms agreed by all parties. Others are more duediligence exercises.