AmProp's luxury properties remain in demand

In fact, in our recent meeting, management stated that the broader property market appears to have seen some stabilisation. In any case, demand for Amcorp Properties Bhd’s (AmProp) luxury properties remains solid.

The take-up rate of its Campden Hill project remains on an upward trajectory, hitting 50% compared with 40%+ in early December 2015. 

The take-up for AmProp’s other major London project, Burlington Gate, is also fast approaching the 90% mark. 

AmProp also expects to close the sale of its final penthouse unit in Neo Bankside (about £6 million or RM37.7 million) by the late first quarter of 2016.  

Apart from being in the “right” segment, being in strategic locations in London (within Zone 1) and offering the right products, we attribute the strong take-up for AmProp’s projects to its partnership with Singapore-listed Hotel Properties Ltd (HPL) and UK-based Native Land, which lend a hand in terms of credibility, quality, track record and marketing.

AmProp will team up with Singapore sovereign wealth fund, Temasek Holdings Ltd, alongside HPL and Clan SPV for its future £1.1 billion gross development value Bankside Quarter development. This project is, nevertheless, still two to three years away.  

Management remains on the lookout for new investment opportunities, although it does not seem pressured, as there should be sufficient projects in the pipeline for a steady earnings base over financial year 2016 (FY16) to FY18, with a three-year earnings per share compound annual growth rate of 64%.

Apart from AmProp’s attractive valuations, this is the other reason we like the stock as its past earnings volatility is likely removed. 

We like the counter for its strong earnings growth, attractive valuations and appealing dividend yields of 5% to 8% for FY17 to FY18E (estimate).

This article first appeared in The Edge Financial Daily, on January 19, 2016. Tap here to subscribe for your personal copy.