UEM Sunrise (UEMS) announced that it has agreed to sell 17 parcels of leasehold agricultural land measuring a total of 1,776.6 acres in Perak for RM75.5m (or RM0.98psf) to Tapah Land Development Sdn Bhd, an indirect subsidiary of Sunsuria Bhd. The agreed selling price is valued at 11% premium to the valuation carried out by Messrs Khong & Jaafar Sdn Bhd dated Nov 15 which valued the said plots at RM68m. We are positive on the disposal as the Group has no immediate plans to develop the Tapah land. To recap, it first disposed a few tracts of the Tapah land measuring 623.1 acres to Lagenda Properties in 2020 for RM30m (or c.1.10 psf). No change to our earnings estimates for now as the deal is expected to be completed by end-2023 only. Maintain our Neutral call with TP unchanged at 33sen.

• Land details. The Group is disposing seventeen parcels of leasehold agriculture land measuring a total of approximately 1,776.6 acres in Mukim Batang Padang and Mukim Bidor in the District of Batang Padang, Perak. We understand that four parcels are affected by settlement of a group of indigenous people, measuring approximately 42.9 acres in total. At present, the other parts of the land are being harvested for palm oil and cash crops. These plots of land are currently agriculture-titled, but zoned for mixed residential and commercial development. We believe this is the last of the remaining land owned by the Group in Tapah.

Source: PublicInvest Research - 5 Dec 2022