-  We visited OSK Property sales gallery over the weekend to gauge the interest in its latest instalment ' called Solstice - at Pangaea in Cyberjaya. Recall that Pangaea is built on 16 acres of freehold commercial land comprising residential and commercial properties.  The first phase called Paragon ' comprising SOFO suites and retail shops - was fully sold. 

-  Solstice comprises 946 units of service apartments to be built over two blocks although only one block was open for sale. Out of the total 457 units on offer, we gather 70% of the units were snatched up with an average pricing of RM600psf.

-  Types of units that are on sale include:- (i) 1bedroom suite (450sf) priced at RM290kRM320k  (ii) 3 bedroom suite (893sf) priced at RM550k-RM580k and (iii) duplex suite (980sf) priced at RM560k to RM620k ' with the 1 bedroom-suite making up bulk of the units. 

-  Encouraged by the strong response, we understand the developer intends to open Block 2 for sale next month. 

-  However, it is not surprising that the take-up has been strong despite the stiff competition within the area. OSK Property is offering a slew of incentives: (1) low entry cost at RM300kRM550k, (2) up to 5%-7% early bird discount depending on the floor of the units, (3) attractive financing where DiBS are offered, (4) the units are partially furnished and (5) RM8,888 cash rebates upon completion. 

-  All in, despite the weak sentiment, the right products at the right location would see strong demand due to strong urbanisation and an accommodative interest rate environment. Hence, we maintain our OVERWEIGHT stance on the property sector because current valuations are depressed with property stocks trading at  a deep discount of 40%-50% to NAVs. New sales guidance by developers are very much intact and we believe there will be a return of pent-up demand in properties. 

-  We expect the market to re-rate established township players such as IJM Land (FV:RM3.80/share) and Mah Sing (FV: RM3.60/share) with  Bandar Rimbayu and Southville City as key developments to drive sales.

-  Meanwhile, we have HOLD recommendations on Sunway Bhd, Bandar Raya Developments and S P Setia.

Source: AmeSecurities